Climate change is expected to increase the frequency and severity of drought events, potentially impacting our environment, including agriculture and water resources. Droughts and extreme weather events can have profound effects on the agricultural economy, leading to reduced crop yields, livestock losses, increased production costs, and disruptions in food supply chains.
Drought Assessment Tool (DAT)
In 2015, the Washington State Department of Agriculture (WSDA) conducted an assessment to quantify drought impacts on agricultural revenue. This was after 85% of Washington State experienced “extreme drought status” in August 2015. Based on this assessment, WSDA recommended a clear economic foundation for future analyses.
To improve understanding of drought impacts, WSDA contracted with the University of California, Merced to develop a drought assessment tool to model agricultural production and water use in agriculturally-dominated watersheds in the state.
The tool models agricultural production and water use to estimate the economic impacts of drought at the watershed and statewide levels. In the model, WSDA can modify irrigation water, cropland, prices, and yields to evaluate the potential impacts of drought events and policy decisions.
The DAT was used in a study to evaluate two drought scenarios in the Yakima Basin. The study focuses on irrigators who do not receive their full water supply during drought, also known as proratables.
The two scenarios modeled are:
1. 70% of normal irrigation water supply, and
2. 50% of normal irrigation water supply.
The two water supply scenarios were selected to evaluate impact mitigation associated with the Yakima Basin Integrated Plan (YBIP) implementation. A primary driver of the YBIP is to increase surface water storage to offset expected losses of snowpack due to climate change.
One of the YBIP’s goals is to supply proratable water users with 70% of their full water allocation during drought events. The supply scenarios are used to understand the economic benefits of ensuring 70% water supply in water-short years. During the most recent snowpack deficit drought of 2015, the end-of-season allocation to proratable water users was 47%. By comparing 50% and 70% water supply, we can estimate the economic losses that might be avoided if the YBIP goal of 70% water supply is met.
Model results
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The two scenarios, 70% and 50% of water supply, were evaluated to understand the potential impacts of drought in the Yakima Basin. The model indicates that reducing water supply results in varying levels of impact on the producer’s revenue, employment, and the region’s economy.
- In the 70% water supply scenario:
- Total producer revenue decreased by 7.3% to 19.4%
- $161 million to $424 million decrease
- In the 50% water supply scenario:
- Total producer revenue decreased by 18.1% to 30.4%
- $397 million to $668 million decrease
The model results estimate significantly higher impacts on producer revenue at 50% water supply as compared to 70% water supply. For example, at 70% water supply apple producers experienced revenue losses between 4% and 18% whereas at 50% water supply, apple producers experienced losses in revenue between 10% and 27%.
The losses associated with reducing water supply to 50% are significant. For example, grape producers are projected to lose between 77% to 88% in revenue. A 50% water supply scenario could result in losses (to the whole economy) as high as $1.1 billion in revenue and up to 10,309 jobs.
Conclusion
The YBIP aims to increase surface water storage and enhance water conservation to improve drought resiliency. One of the YBIP’s goals is to provide proratable water users with a 70% water supply during drought events.
To understand the potential impact of reaching the YBIP’s water supply goals, WSDA employed the DAT model to compare the impacts of 50% and 70% water supply scenarios.
Estimated losses at 50% water supply are between 58% and 146% higher than estimated losses at 70% water supply. These results indicate that reaching the YBIP’s goal to ensure 70% water supply during drought events could reduce economic losses by up to $406 million and retain over 3,700 jobs reliant on agriculture. Implementing the YBIP could reduce total economic losses by 11% across all metrics.
The reduction in losses estimated through these scenarios demonstrates the value of the investments made by local, state, and federal governments. If the YBIP water supply projects are not implemented, additional losses to revenue, value-added, and jobs are anticipated. With drought events expected to increase in frequency and severity under future climate scenarios, integrated water management solutions are needed to enhance drought resiliency. The YBIP and similar strategies in other basins have the potential to significantly reduce drought impacts to the agricultural economy.
Download the full report here.