California’s Drought Has Become A $2.74 Billion Problem In 2015

California Drought is a 3 billion dollar problem

California’s ongoing drought is going to cost $2.74 billion in 2015. The drought is expected to cost 10,000 seasonal farm jobs.

Agricultural economists at the University of California, Davis, said the four-year-long drought would surpass last year’s $2.2 billion loss.

“If a drought of this intensity persists beyond 2015, California’s agricultural production and employment will continue to erode,” said co-author Josue Medellin-Azuara, a water economist with the UC Davis Center for Watershed Sciences.

The report, released on Tuesday, also claims that because dry conditions and difficulty obtaining water for irrigation, farmers would have to fallow 542,000 acres (220,000 hectares) of land in 2015 or 114,000 more acres than estimated for 2014.

The actual loss of agricultural revenue is expected to be $1.84 billion while the ripple effect throughout the rest of the economy is expected to hit $2.74 billion.

Despite the drought, the study has found that California’s agricultural industry is still growing.

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“We’re getting by remarkably well this year – much better than many had predicted – but it’s not a free lunch,” said lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

In the meantime, some farmers are drilling wells below 2,500 feet to find much-needed water. Those wells are causing some areas to sink into the ground, creating an entirely new issue for farmers and local residents.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.