Tuesday Talks with Dr. Patterson

April 7 ,2015

California’s Drought

On April 1, 2015, Governor Jerry Brown ordered a 25 percent reduction in water usage by California’s 400 water supply agencies, which deliver water to 90 percent of the state’s residents, based on 2013 usage levels.  This is California’s first-ever mandatory reduction in water use.  The order authorizes the State Water Resources Control Board to impose fines on those agencies not meeting the 25 percent reduction requirement.  This reduction is expected to save 1.5 million acre feet (Nagourney).  The order directs agricultural water management districts to develop water management and drought management plans.  It also calls for increased reporting on groundwater pumping by farmers and water districts (Agri-Pulse).  However, agriculture was spared from the mandatory water use reduction in the governor’s order. 

Governor Brown explained that the mandatory reduction was necessary given the status of the continuing drought, now in its fourth year, and the state’s limited success in meeting a 20 percent voluntary reduction in water use during 2014 (Nagourney).  Furthermore, the snowpack in the Sierra Nevada Mountains only reached six percent of its normal level this winter.  The snowpack typically provides as much as 30 percent of the state’s surface water supplies (Nirappeli).  Some questioned why the governor’s order did not include agriculture.  Governor Brown argued that agriculture has already “borne much of the brunt of the drought to date” (Agri-Pulse). 

During 2014, surface water supplies to California farmers, primarily in the Central Valley region, were reduced by 6.6 million acre feet (maf).  Farmers responded by pumping additional groundwater, pumping as much as 5.1 maf.  Still, this resulted in a 1.5 maf shortfall in water supplies for the agricultural sector.  As a result, up to 400,000 acres of agricultural land was left to fallow last year.  Crop revenue losses were estimated at $810 million and livestock and dairy revenue losses amounted to $203 million.  The largest losses in crop revenues were in cotton and grain, oilseed, and feed crops.  Lower losses were incurred by high-value fruit, nut, and vegetable producers.  Farmers incurred an additional pumping cost of $454 million.  Combined, the total direct costs on the agricultural sector was $1.5 billion.  The decreased agricultural production resulted in a loss of 17,100 jobs and a total economic cost to the state of $2.2 billion. (Howitt, et al)

The losses in farm revenue, agricultural employment, and state earnings are significant in this significant agriculture state.  In 2012, California’s agricultural product sales reached $43 billion making it the largest agricultural product producing state in the United States.  California ranked number one in the total value of crop sales and number 3 in the total value of livestock and poultry product sales.  There are numerous crops or products where California is the nation’s leading producer and supplier: grapes, almonds, many vegetable crops, several tree fruit crops, and dairy (USDA).  While the agriculture sector is large compared to all other states, it only accounts for only two percent of California’s gross state product (Spiders and White).  California, by itself, is the world’s seventh largest economy (Nagourney, Healy, and Schwartz).

The curtailment in surface water supplies during 2014 was achieved by reducing water deliveries to agricultural producers with lower priority (lower seniority) appropriated water rights.  Some producers endured this curtailment in surface water deliveries by pumping additional groundwater during 2014.  However, this activity is not sustainable.  As groundwater withdrawals were made (a total of 5.1 maf during 2014), the water table began to drop, causing some wells to go dry; some producers were forced to drill deeper wells.  In some cases, the cost of pumping groundwater becomes prohibitive for the production of some crops (Howitt, et al).  The pumping of groundwater is also causing land to subside.  In some areas, drops of up to 20 inches in the lands surface has been recorded, as groundwater was removed (New York Times).  The part of Governor Brown’s order to require better reporting on groundwater removals is intended to better understand the extent of groundwater use and develop appropriate policies to manage this resource.

When the governor first reported the mandatory reduction in water usage on Wednesday of last week it seemed as though agriculture was spared.  However, by week’s end, the State Water Resources Control Board announced that there would be further reductions in surface water allocations to farmers this year, including senior rights holders with water claims dating back before 1914 (Nirappil).  Deliveries from state surface water projects are expected to be only one-fifth of their normal level and deliveries from federal water projects will be zero this year (New York Times).  Further reductions in water delivery will likely result in more land being fallowed and more groundwater pumping, if it can be sustained.

The reduced water supply in California is a good example of the fragility of our food production system and the need to develop new technologies to adapt to tighter water supplies and the need to develop policies to better manage periods of drought.  If the drought in California continues into 2016, more water saving technologies will be adopted and agricultural production will shift more towards high-valued crops.  Agricultural producing regions in other arid areas have seen similar adaptions (e.g. Israel and Sonora, Mexico).  In the near-term, there will likely not be an exodus of producers from California or surge in agricultural production in regions with more abundant water supplies, such as Alabama.  The production and marketing of high-valued fruit, nut, and vegetable crops requires an extensive marketing distribution system, which is not as developed in many states, such as Alabama.  However, a protracted drought or shifts in climate patterns could push production and marketing to other regions.

References

Agri-Pulse.  “California Mandates Statewide Water Reductions.”  Agri-Pulse, April 1, 2015. (Accessed April 5, 2015): http://www.agri-pulse.com/California-mandates-statewide-water-reductions-04012015.asp

Howit, Richard, Josué Medellín-Azuara, Duncan MacEwan, Jay Lund, and Daniel Sumner.  Economic Analysis of the 2014 Drought for California Agriculture.  Center for Watershed Sciences, University of California, Davis, California, 2014.  Available at http://watershed.ucdavis.edu.

Nagourney, Adam.  “California Imposes First Mandatory Water Restrictions to Deal with Drought.”  New York Times, April 1, 2015.  (Accessed April 5, 2015): http://www.nytimes.com/2015/04/02/us/california-imposes-first-ever-water-restrictions-to-deal-with-drought.html?_r=0 

Nagourney, Adam, Jack Healy, and Nelson D. Schwartz.  “California Drought Tests History of Endless Growth.”  New York Times, April 4, 2015.  (Accessed April 5, 2015): http://www.nytimes.com/2015/04/05/us/california-drought-tests-history-of-endless-growth.html

New York Times.  “Watering California’s Farms.”  New York Times, April 4, 2015.  (Accessed April 5, 2015): http://www.nytimes.com/2015/04/05/opinion/sunday/watering-californias-farms.html

Nirappil, Fenit.  “Californians with Century-Old Water Rights Face Restrictions.”  89.3 KPCC, April 3, 2015.  (Accessed April 5, 2015): http://www.scpr.org/news/2015/04/03/50781/californians-with-century-old-water-rights-face-re/. 

Spiders, David, and Jeremy B. White.  “California Agriculture, Largely Spared in New Water Restrictions, Wields Huge Clout.”  The Sacramento Bee, April 3, 2015. (Accessed April 5, 2015): http://www.sacbee.com/news/state/california/water-and-drought/article17268866.html

USDA.  Census State Profile: California.  National Agricultural Statistical Service, U.S. Department of Agriculture.  Available at http://www.nass.usda.gov/Quick_Stats/Ag_Overview/stateOverview.php?state=CALIFORNIA

Dr. Paul Patterson is Associate Dean for Instruction for the College of Agriculture and Professor of Agricultural Economics.