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UC Study Finds $2.7 Billion Drained From Calif. Economy During Drought

LOS ANGELES ( — A statewide drought has drained $2.7 billion from California's economy, University of California researchers announced Tuesday.

A study (PDF) conducted by the UC Davis Center for Watershed Sciences estimated the state's agricultural economy will lose about $1.84 billion and 10,100 seasonal jobs in 2015 because of the drought, with fallout likely being the worst in the Central Valley.

Crop revenue losses will shed an additional $900 million from the state's economy and cost dairy and livestock producers roughly $350 million, according to researchers.

Increased efforts to tap groundwater with heavy pumping and drilling deeper wells - often in basins that are already or nearly tapped out - could end up costing farmers an additional $590 million by the end of the year, the study found.

Despite severe drought conditions, however, researchers say California continues to be the world's richest food-producing region as strong global demand and prices for many of its fruits, nuts and vegetables has helped sustain the farm economy, along with intrastate water transfers and shifts in growing locations.

"We're getting by remarkably well this year — much better than many had predicted — but it's not a free lunch," said lead author Richard Howitt, a UC Davis professor emeritus of agricultural and resource economics.

The report was primarily funded by the California Department of Food and Agriculture.

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