Good News? Drought to “Only” Cost Central Valley $1.7 Billion/14,500 Jobs

The loss of 14,500 jobs and revenues of $1.7 billion is a ho-hum to the denizens of Sacramento. That is how much it is estimated will be lost in the Central Valley due to government water policies (we have a drought, but government has decided to use our water for the environment and fish, not people). Also 400,000 acres of prime farm land is going fallow this summer. A massive cost to the economy and the families.

Ask the 14,500 people losing jobs if this is a minor problem. What happens to local stores, sales tax revenues and the economy of the already depressed communities? At the same time the Sacramento politicians are finalizing legislation to take control of groundwater from private owners. Little and big policies have caused the California Depression. Are we angry enough to end it?

“Agriculture companies make up a relatively small share of the state’s economy and state government revenue. The sector contributed 1.5 percent to the state’s gross domestic product in 2012, half of the contribution of the construction industry and less than a quarter of the information and high-tech sector.”

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Moody’s: Drought unlikely to hurt state economy

An irrigation canal control gate is dry at a farm near Firebaugh. Moody’s said California’s drought won’t have a significant impact on the state’s credit rating, at least for now. It may be a different picture if the drought continues for a couple more years.

Allen Young, Sacramento Business Journal, 5/21/14

Although the San Joaquin Valley has been called “the food basket of the world,” the drought will won’t have a significant impact on California’s economy and will not hurt the state’s credit rating, according to a Moody’s credit rating agency report Tuesday.

Agriculture companies make up a relatively small share of the state’s economy and state government revenue. The sector contributed 1.5 percent to the state’s gross domestic product in 2012, half of the contribution of the construction industry and less than a quarter of the information and high-tech sector.

However, if the drought continues for another year or two, farmers will struggle to use short-term fixes to reconcile the loss of water, which would lead to “significantly larger losses in farm income and employment,” according to the credit rating agency.

“For a city or county with a large agricultural base, a prolonged drought could lead to material revenue losses,” according to Moody’s.

This report arrives a day after another study from the University of California Davis found that the drought could cost Central Valley farmers and farm communities$1.7 billion this year and may cause more than 14,500 workers to lose their jobs.

Read a PDF of the Moody’s report.

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. If the Dumbocrats had been around in Fred Flintstone’s period, they would have been crusaders for ‘Save Dino’.

  2. If you count Migrant Farm workers there was a hell of a lot more unemployed than this report covers.

  3. Eagles Glen of eagles says

    Farm owners go bankrupt or get gov aid?

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