SACRAMENTO, Calif. — While it's still too soon to assess the full impact that California's prolonged drought will have on the U.S. agricultural industry, growers and packers in the state's Central Valley region are feeling left high and dry, projecting significant crop losses — and significant losses to jobs and state revenue associated with those crops.
“It's very bad,” Wendy Fink-Weber, spokeswoman for the Western Growers Association, Irvine, Calif., said of the situation. “The growers are saying this is the worst they've ever seen.”
A new report from the University of California's Giannini Foundation of Agricultural Economics projects 60,000 to 80,000 job losses and $1.6 billion to $2.2 billion in lost income. Measured on a statewide basis, income losses could rise to $2.8 billion, with 95,000 jobs lost.
Agriculture is California's largest industry, generating more than $30 billion annually in sales and providing 1.1 million jobs in a state that is already facing a 9.3% unemployment rate — one of the highest in the nation.
“The impact of this — the estimates are that hundreds of thousands of acres of land are going to be left unplanted. Just exactly what that figure is, is a little hard for one to get one's arms around right now, in part because there is still some time remaining [before planting season is over],” said Dave Kranz, spokesman for the California Farm Bureau Federation.
“The good news is it's raining right now where I am, so there is some hope that things may improve, but only slightly.”
California water officials declared a zero allocation policy for farmers who purchase water from the federally managed Central Valley Project, and the separate state-run water system is down to an estimated 15% of normal supply.
“Farmers who buy water directly from those systems or, typically, from water districts that buy water from those systems will have severely reduced water supplies, and possibly no water at all,” Kranz said.
“Parenthetically, the Central Valley Project said that if they get more rain or snow in the next few weeks, they may be able to deliver 10% of supplies, so it's a pretty grim outlook for those particular farmers.”
The largest purchaser of Central Valley Project water is an irrigation district known as the Westlands Water District. It will need to leave an estimated 300,000 acres of land in its territory idle this year. In addition, a number of existing almond orchards will likely be destroyed because there won't be water to serve those orchards this year.
Citing a recent testimony to California's Department of Food and Agriculture by WGA member John Harris of Harris Ranch, Fink-Weber told SN that the drought will have an impact on the economy and market this year, and could drive the cost of food up.
“This is the worst year in memory — it's not just the drought, but the broken delta and the pumping restrictions,” Harris testified. “If we don't get the delta fixed, we'll never have enough water. Two years ago I was farming 14,000 acres and pulling 120 full-time workers, and now there are 24 employees and 5,000 acres.”
Industry experts agree that it's not just the drought causing problems, but also the restrictions involved in moving the water.
Decreased delivery of water through the federal and state projects is partly due to the restriction in pumping water from the Sacramento-San Joaquin Delta, implemented by the federal government to save endangered species there.
“Environmental pressures have really made this a manmade disaster, not necessarily just a natural disaster,” Fink-Weber said.
“We would not be seeing this loss of acreage, or loss of jobs, if it weren't for the environmental restrictions that farmers have to now adhere to.”
Kranz agreed.
“It's the combination of the dry weather and the restrictions of moving water that has got us in the situation that we're in now. We hope that the state government will take actions that we recommend to address the short-term emergency to the degree possible, but also, we need to move as quickly as we can to assure the state's longer-term water future, both for growing food here and also the other needs that need to be met,” he said.
The effects of this crisis on produce supply and prices at retail will certainly be seen, but when, and to what extent, are still unclear.
“I couldn't predict, but I can't see that this would lower prices, so there may be increases,” Fink-Weber said. “If there's not enough produce available from California, you know your supermarkets will find it from somewhere else, so I don't know the answer to that. It certainly is unfortunate for some of our members and farmers.”
Kranz agreed that the current situation is a threat to the state's, and the country's, agricultural economy.
“We're concerned about both the short-term emergency and the longer-term crisis that we have in California,” Kranz said.
“We are concerned that if you have some of these significant losses this year, that you could see farms go out of business altogether. You could see people who work on those farms, or that have been laid off by other farms or agricultural businesses, become discouraged and leave the region, and then you start to get concerns about the long-term sustainability of that agricultural economy.”
If the drought continues, it will have a lasting impact, Fink-Weber predicted.
“Farmers do very well through many kinds of natural disasters; that's what farming is,” she said. “There are good years and bad years, and they save for the bad years. But if it continues for too long, it may not be recoverable. Long-term effects could kill the ability of the Central Valley to provide the country the fresh produce they have for a hundred years. It's a water crisis, not just a drought. It's raining here now — we hope and pray that that continues in the next few weeks.”
The University of California report estimates that if the drought continues through 2009, revenue, employment and income losses can be expected to rise by 30%, because farmers will not be able to continue increasing their groundwater pumping or stressing their crops with reduced irrigation. The majority of job losses will be to farm workers and employees of packing houses and processing plants.
Yet Kranz stressed that still it's too soon to gauge the damage accurately.
“There's a lot in flux right now, because we have a little bit of the winter season to go, we have some of the planting season yet ahead of us. It's awfully hard to be very specific right now, because there are a lot of individual farmers who are making individual decisions on what they feel they can grow on their individual farms,” he said.
“As we get a better sense of the cumulative impact of that over the next few weeks, we'll have a better idea of what's going to be affected.”