Does a Drought Put California Ag Jobs at Risk?

July 8th, 2022

California is a state that is prone to cyclical droughts – and they seem to be happening more often than ever before. The most recent drought has impacted several major industries that shape California’s economy, including agriculture.

Not only does a drought affect the bottom line, but a drought can also put California ag jobs at risk. In this guide to navigating an environmental and economic dry spell, we’ll cover:

  • What is defined as a drought in California?
  • How long has California been in a drought?
  • How has the drought affected California Agricultural Economy?
  • Are ag jobs affected by droughts in California?
  • What happens for famers during a drought in CA?

There has never been a better time to get the proper information on this job market, and what to do in response to the problematic droughts that affect Californians all across the state. We hope this helps.

What is Defined as a Drought in California?

Generally speaking, a drought is defined as a drier period of conditions that result in water-related problems.

For California droughts, the Palmer Drought Severity Index (PDSI) has been the standard of measuring droughts since the 1960’s, and it works by reviewing and aggregating temperature and rainfall over regulated periods of time. In turn, when rainfall is a certain percentage below average precipitation, the state will declare a drought and adjust its reservoir usage appropriately.

How Long Has California Been in a Drought?

California reached critically dry conditions in early 2021 after enjoying a few years of normal precipitation flow. One of the most damaging droughts in the state’s history was between 2012-2016, and because drought is a gradual phenomenon, the implications play out differently during each dry period. The amount of water supplied by individual water agencies is important to buffer impact – a single year of drought may not impact California agriculture or its citizens due to the state’s large groundwater infrastructure, but over time, droughts take a significant toll.

How Does a Drought Affected California’s Agricultural Economy?

A drought is one of the most adverse environmental factors that can hurt the extremely strong California agricultural economy. It is estimated that the harsh drought conditions in 2021 cost the industry to shrink by over $1.2 billion in sales, and it makes it extremely difficult to project normal growth or staff appropriately.

California itself is the fifth largest economy in the world, and agriculture contributes heavily to it. As the top contributing agriculture industry in the United States, California totals over $50 billion in annual revenue and employs over 400,000 people.

When a prolonged drought occurs, the bottom line numbers are diminished – both for farming business and for those who work in agriculture.

Are Ag Jobs Affected by Droughts in California?

The short answer is yes – California’s agricultural jobs are hurt when there is a drought, especially a sustained one. As diminished production and water regulation puts a damper on the top and bottom line for the state’s farming operations, there are inevitable cutbacks and hiring stops.

It is estimated that the severe drought conditions in 2021 led to over 8,000 jobs being cut from California ag, and as the dry conditions continue, it will become an increasing challenge to make sure the industry is not forced to make short-term job cuts that affect the long-term growth.

What Happens to Farmers During a Drought in CA?

While drought can be a daunting time for the farming industry from top to bottom, there are measures that the state of California and larger organizations are making to help the working families in agriculture.

Senate Bill 1066 is part of the California Farmworkers Drought Resilience Pilot Project, and would help grant assistance to farm workers and families who have agricultural jobs impacted by drought conditions. The bill focuses on offsetting income reduction by granting monthly cash payments to workers who have been affected by drought cuts. Additionally, these cash payments are not taxed as income, providing further relief.

However, even with a proposed bill to help, a drought can still be a tough time for farmworkers and their families. In this time of economic uncertainty, the ability for families to work with local banks and credit unions is more important than ever.

Community West Bank Provides Ag Financing and Financial Care

At Community West Bank, we understand that a bank isn’t just a place to keep your money – it’s an organization that can help you grow and manage your finances. From credit cards, to personal loans and high-interest saving accounts, we provide the right tools for long-term monetary success.

For information about available funding for land acquisitions, refinancing, or other lending options for agricultural projects, please contact us to get started. Call Laura Maffei at (209) 679-9244 or (805) 692-4394, or John Lozano at (209) 598-6056.

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