Drought's Impact on Farms: Short-Term Costs and Long-Term Dangers

In the most visible sense, California's four-year drought has brought the worst of times to the state's farm sector.

A revised analysis (embedded below) from a team of UC Davis experts says that nearly 900 square miles of normally robust cropland now stand idle for lack of water, more than 10,000 seasonal farm jobs have been wiped out, and the direct financial cost to agriculture this year is estimated to be around $1.8 billion.

But if all that reminds you of "The Grapes of Wrath" and farmers huddled against the swirling clouds of the Dust Bowl, the report might make you think again. Because even in the middle of the most punishing drought in the state's history, the report says, the agriculture sector continues to grow.

The study points to two factors that account for that. First, California farmers are marketing high-value crops, led by almonds, that command premium prices. So even with reduced acreages for many commodities, the overall farm sector's bottom line remains relatively healthy.

At the same time, agriculture continues to make up for a shortage in surface water -- supplies that typically come from the the state's network of reservoirs and canals -- by pumping massive volumes of groundwater and, to a lesser extent, buying water.

The report estimates the agricultural surface water shortfall at 8.7 million acre-feet -- leaving about half of what might be expected in a base year. But farms are making up two-thirds of that amount by pumping water, with 6 million acre-feet expected to be withdrawn from underground aquifers. To put that amount into a domestic/urban context, 6 million acre-feet would supply about 12 million California homes and as many as 30 million people.

The study says all that pumping has a significant short-term cost -- agricultural operators will spend an additional $590 million this year just to get the water out of the ground -- and a more disturbing longer-term impact. The document questions whether a law adopted last year to create a statewide groundwater management scheme will be adequate to head off depletion of a resource that's critical to agriculture:

Given the unprecedented rate of groundwater depletion during the current drought, the present 27 year timeline for stabilizing critical groundwater basins under Sustainable Groundwater Management Act (SGMA) of 2014 is likely to be too long to ensure replacement of the cumulated overdraft under the current drought (approximately 15 million acre-feet so far).

Richard Howitt, a UC Davis agriculture economist who is a co-author of the study, said that the groundwater pumping is "exactly the right thing to do in one sense – it’s our buffer against drought." The problem, he said, is that there's no incentive to replenish the aquifers that are being tapped. And that's what creates deep uncertainty for the future.

“We are really eating up our seed corn, or however you want to say it," Howitt said. "We're spending our 401K on kitchen improvements."