In the News | 2 min read
Drought Cost California more than 1B in 2021

Drought Cost California More Than $1B in 2021

Miguel Angel Miranda
March 27, 2022
Miguel Angel Miranda
March 27, 2022

California is considered the most important state in the U.S. for the agricultural sector, as it generates two-thirds of all fruits and nuts produced in the country. In addition, it is estimated that the agricultural industry generates an income of around 5 billion dollars for the state each year.


As a major economic activity, agriculture requires most of the state’s water resources, and California uses about 80% of its water for agriculture. For this reason, the serious drought problems that the state has experienced in recent years have impacted its economy.

The drought that California suffered during 2021 implied a loss of around 1.1 billion dollars for the agricultural sector, according to estimates presented in a study conducted by researchers at the University of California Merced.

The study analyzed the economic impacts caused by this drought for the Central Valley, Russian River Basin, and northern intermountain valley regions of California.

California seems to be familiar with droughts, since 2020 and 2021 have been the two driest years ever, and according to Alvar Escriba Bou, researcher and co-author of the study, more and more droughts are expected, so it will be necessary to develop tools to anticipate and minimize the socioeconomic impacts.

According to the analysis, it is estimated that at least 395,000 acres (160,000 ha) of land were affected by the water cutbacks caused by the droughts. This has forced producers to resort to groundwater as an alternative to meet the water demand of their crops, so the overexploitation of this resource is alarming.

On top of that, these problems occurred just during the implementation of the sustainability plans of the Sustainable Groundwater Management Act (SGMA), a law designed to avoid adverse consequences as a result of unsustainable groundwater management.

These plans were submitted in 2020 for critically over exploited basins, while for other major basins, new plans are expected to be submitted this year. Furthermore, in response to this problem, SGMA is working to determine how California farmers can deal with this drought without overdrawing groundwater.

Meanwhile, the agricultural industry has a great capacity for innovation and adaptation, which, through investment in systems and technologies, could help to recover aquifers, according to Joshua Viers, co-author of the study. These innovations, along with better application and use of water, will allow to manage scarce water supplies more effectively.


The Packer
2021 drought cost California ag industry more than $1B

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