Potential economic impacts of irrigation-water reductions estimated for Sacramento Valley

Abstract

In the Sacramento Valley, irrigation water is vital to agriculture and agriculture is vital to local economies. This study investigates these relationships by asking: If surface irrigation water were cut by 25%, what would be the economic impacts on farmers and on communities? The study results indicate that the effects would not be uniform across crops and the eight counties in the Sacramento Valley. In most regions and for most crops, a cut in irrigation water would cause a modest acreage reduction of up to 3%. Overall crop-revenue losses for core regions would total $8 million while the loss for the entire Sacramento Valley would be $11 million. About 80% of those losses would take place in poorer counties that depend most heavily on agriculture, and particularly on rice. However, in response to surface-water reductions, farmers and others would mitigate their losses by making adjustments such as conserving water, changing cropping patterns or implementing new technologies.