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Drought Could Cost California Economy $2.2 Billion In 2014, Says Study

Jul 15, 2014

Managing groundwater reserves is key to the state surviving a long-term drought. Here, Senior Engineering Geologist Chris Bonds from the California Department of Water Resources monitors flow rate from a well.
Credit John Chacon / California Department of Water Resources

The California economy could lose $2.2 billion this year because of the drought. Max Pringle reports on a UC Davis study that shows the agriculture industry alone could lose $1.5 billion.

The study says California will have to make do with a third less water this year and that could lead to 430 thousand acres of fallow farmland. Former UC Davis Economist Richard Howitt says the pain won’t be spread evenly throughout the state.

Howitt: “On average, you will all get your fruits, nuts, raisins, vegetables and wine, but there are pockets of extreme deprivation where they’re out of water and out of jobs.”

Howitt estimates 17,000 seasonal farm workers could be unemployed. The report recommends California adopt statewide groundwater pumping rules and keep regular track of groundwater levels.

The drought is expected to continue for at least another year. US Agriculture Secretary Tom Vilsack will be in Fresno on Friday to announce the next phase of federal drought relief.