California drought impact pegged at $2.7 billion

As reported by the Sacramento Bee:

The drought is costing California about $2.7 billion this year, according to a new UC Davis study, although the statistics suggest the state’s overall economy can withstand the impact.

In their latest estimate of the four-year drought’s economic effects, professors at the university’s Center for Watershed Sciences said Tuesday the drought has reduced seasonal farm employment by 10,100 jobs this year. When indirect job losses are thrown in, including truck drivers, food processing workers and others partially dependent on farming, the impact on payrolls comes to 21,000.

At the same time, the study said farmers are holding up reasonably well in spite of significant water shortages and the fallowing of 542,000 acres of land. “Agriculture is very resilient because of the underground water,” said Richard Howitt, professor emeritus of agricultural and resource economics and a co-author of the report. “The economic impact is not as severe as it could be.”