Drought to siphon $2.7 billion from California economy

About 4 percent of the California agricultural economy - $1.8 billion - will be lost in 2015 due to the California drought, and combined with ripple effects in affiliated industries, will produce a $2.7 billion economic hit, reported the San Jose Mercury-News.

The article was based on an economic analysis by a team of scientists that included Daniel Sumner, director of the Agricultural Issues Center, a UC Agriculture and Natural Resources special program.

The downturn will be felt most sharply in the San Joaquin Valley, where five of the state's top six agricultural counties are situated.

"Tulare is taking the hardest hit," said the report's lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

Pumping groundwater has hepled keep some acreage in production. This study did not address the long-term costs of groundwater overdraft, such as higher pumping costs and greater water scarcity.

"The socioeconomic impacts of an extended ground (water use), in 2016 and beyond, could be much more severe," said Jay Lund of UC Davis, who lead the analysis.

Employment losses due to the drought are softened by the growth in non-agricultural sectors of the Central Valley economy, the report said.

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