Interconnected Risks of Climate, Water and Finance in California’s Agriculture

Abstract:

California is one of the most productive agricultural regions in the United States (US), generating 19.4% of US crop cash receipts in 2018. Yet agriculture in California is highly artificial, supported by a significant amount of irrigation. Because surface water from the snowmelt of Sierra Nevada runs dry before the peak of the growing season, irrigation is mostly sourced from groundwater to supplement reductions in surface water flows. Due to the continuous extraction of groundwater, declines in groundwater levels have been observed. The decline is further exacerbated by the last 2014 drought, which generated a net shortage of 1.85 billion cubic meters of water, resulting in 166,000 ha in idle land, $454 million in increased pumping costs, and about 15,500 lost jobs. Although drought is a part of California’s semi-arid climate, climate projections suggest that drought may become more frequent. Considering the significant amount of losses, it is imperative to better understand different types of agricultural risks and their interactions. In this study, we synthesize multi-scale datasets from climate (e.g., precipitation, temperature), hydrology (e.g., surface water, groundwater), finance (e.g., commodity price) to illustrate the complexity of agricultural risks in California. Our initial data suggested that agriculture in California would be under a greater risk in the future due to climate change and fluctuations in commodity prices.