What drives crop land use change during multi-year droughts in California's Central Valley? Prices or concern for water

Abstract:

The recent multi-year droughts in California have highlighted the heightened risk of longer and more intense droughts, thus increasing the interest in understanding potential impacts for major economic activities such as agriculture. This study examines changes in crop acreage for dominant crops in the Central Valley of California between 2007 and 2016 in response to two consecutive droughts (2007-2009, and 2012-2016), and assesses the roles of crop price, yield, and water requirement in influencing the cropland use change. Results indicate: (1) while the active cropland area remained approximately the same, there was an increase in fallow/idle cropland that culminated in an increase of total cropland area (i.e. active fallow land combined with active land); (2) the increase in total cropland came possibly from a conversion of pasture land; (3) tree nuts (almonds, walnuts, and pistachios) acreages had increased by 50%, and fruits (grapes, oranges, and tomatoes) acreages had increased by 60%; (4) alfalfa, cereals (rice, winter wheat, corn, and oats) and cotton acreages had reduced by 40%, 36%, and 54%, respectively; (5) this shift in land use pattern was largely driven by crop prices; (6) and the shift (mainly the expansion of tree nuts) increased water demand during successive droughts, resulting in large overdrafts of groundwater particularly in the southern half of the region which hosts the majority of agricultural area in the region and is the epicenter of tree nut and fruit production.