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Drought Causing $2.7 Billion Economic Hit To California

Aug 18, 2015


A new UC Davis study projects the fourth year of drought in California will cost the overall economy two-point-seven billion dollars. But as Amy Quinton reports from Sacramento, the study’s authors say agriculture remains remarkably resilient despite the drought.

The report finds the agricultural sector will be hit hardest by the drought, losing nearly two billion dollars and more than 10,000 jobs. Farmers will also take 500,000 acres out of production this year. But the report finds agriculture is still fairly robust. 

Jay Lund: "It surprised me a little bit how slowly the deterioration of agriculture is progressing."

Report co-author Jay Lund with the UC Davis Center for Watershed Sciences says a lot of that has to do with the use of groundwater to offset the shortage in surface water, and the increase in high-value crops. 

Lund: "The very good global prices for agricultural commodities from California is really helping us a lot, but I think to prepare us for future droughts we really need to pay attention to groundwater."

The study says if California's drought continues into 2017, the effect on the economy is likely to be about six percent worse than this year.