Economic Impacts of Reductions in Delta Exports on Central

Valley Agriculture  

Update Summary

Richard E. Howitt, Duncan MacEwan , Josué Medellín‐Azuara, Steve Hatchett

Department of Agricultural & Resource Economics

University of California, Davis

May 22, 2009

Overview 

This summary serves as an update to previous reports prepared for DWR and published in ARE 

Update and reflects current CVP and SWP deliveries announcements. Additionally, the most recent 

and updated version of SWAP has been used in this analysis. All model inputs/data are updated; 

the most significant change is disaggregated regions for a total of 27 CVPM regions. Regions were 

disaggregated to more accurately reflect groundwater availability and project water deliveries. The 

result is an increase in projected impacts in regions with limited groundwater availability and/or 

heavy reliance on project deliveries. 

Another important change is groundwater pumping capacities have been updated for the 

disaggregated regions. The year 2000 DWR data is used as the base groundwater availability by 

region. DWR completed analysis of groundwater pumping capacity by region for 2009 and these 

are taken as the maximum groundwater pumping increases by region. DWR’s analysis finds that 

regions 14B, 15B, and 19A have decreased pumping capacity since 2000. As such, these regions 

were assumed to have no increase in pumping capacity. More details are provided in table 1 in the 

following section. 

All costs reported are in 2008 dollars to be consistent with previous reports, groundwater pumping 

capacity and local supply reductions are consistent with DWR projections. Additional results for 

groundwater pumping costs are summarized by Sacramento and San Joaquin Valley regions. This 

report summarizes results for regions 1-9 and 10-21C. Additionally, employment losses are broken 

down by income group using REMI multipliers. 

Water Availability Scenarios 

USBR and DWR May update deliveries forecasts are incorporated into the model and run for both 

90-percent 50-percent exceedence forecasts. Since farmer planting decisions have already been 

made, acres are held fixed equal to acres planted under the previous model run (5/5/09), thus the 

only change is to groundwater pumping. 

The 90-percent exceedence forecast: 10% CVP agricultural water service contract supply for south 

of Delta export regions and 15% for Tehama-Colusa (Region 3B) contract delivery, 100% for all 

Settlement and Exchange regions, 100% Friant Class 1 (Regions 13,16,17,18,20,21), 0% Friant 

Class 2 and 40% SWP. 
The 50-percent exceedence forecast: 15% CVP agricultural water service supply for south of Delta 

export regions and for Tehama-Colusa (Region 3B) contract delivery, 100% for all Settlement and 

Exchange regions, 100% Friant Class 1 (Regions 13,16,17,18,20,21), 0% Friant Class 2 and 40% 

SWP. 

Table 1: Local Supply and Groundwater Data from DWR. 

Percent decrease/increase over base 

CVPM Region Percent Local Supply Available Percent GW Increase Capacity 

1 n/a 63.2 

2 0.58 18.4 

3A 0.6 48.6 

3B 0.6 48.6 

4 n/a 2.9 

5 0.67 125.0 

6 0.79 21.6 

7 0.67 7.8 

8 0.74 0.0 

9 0.76 47.1 

10 0.79 24.8 

11 0.71 401.6 

12 0.72 29.0 

13 0.72 74.1 

14A 0.6 75.9 

14B 0.6 0.0* 

15A 0.43 74.7 

15B 0.43 0.0* 

16 0.42 457.8 

17 0.43 124.8 

18 0.43 87.1 

19A 0.74 0.0* 

19B 0.74 53.3 

20 0.73 50.9 

21A 0.73 35.6 

21B 0.73 25.3 

21C 0.73 23.0 

 * Set to zero

Results Summary 

Results are summarized in terms of jobs, revenue, and income losses for the Sacramento and San 

Joaquin Valley (regions 1-9 and 10-21, respectively). 90-percent and 50-percent exceedence 

forecasts are summarized and employment losses are broken down by income group using a set of 

REMI multipliers (tables 2 and 3, respectively). 
Table 2: 90 Percent Exceedence Scenario 

90 Percent Exceedence 

Region CVPM Regions Revenue Loss Income Loss Employment Loss

SAC 1-9 $7,123,666 9,624,287 354 

SJV 10-21 $703,030,230 949,815,009 34,931 

Total 1-21 $710,153,896 959,439,296 35,285 

Employment Loss Breakdown 

Worker Group Annual Wage Rates Employment Loss SAC Employment Loss SJV Total 

(1st 20%) $16,652 - $19,632 279 27,494 27,772 

(2nd 20%) $21,296 - $28,466 29 2,854 2,882 

(3rd 20%) $31,372 - $39,076 15 1,482 1,497 

(4th 20%) $39,316 - $50,019 18 1,745 1,763 

(5th 20%) $50,876 - $75,275 14 1,357 1,371 

Table 3: 50 Percent Exceedence Scenario 

50 Percent Exceedence 

Region CVPM Regions Revenue Loss Income Loss Employment Loss

SAC 1-9 $7,123,666 9,624,287 354 

SJV 10-21 $620,358,540 838,123,067 30,824 

Total 1-21 $627,482,206 847,747,354 31,178 

Employment Loss Breakdown 

Worker Group Annual Wage Rates Employment Loss SAC Employment Loss SJV Total 

(1st 20%) $16,652 - $19,632 279 24,261 24,539 

(2nd 20%) $21,296 - $28,466 29 2,518 2,547 

(3rd 20%) $31,372 - $39,076 15 1,308 1,323 

(4th 20%) $39,316 - $50,019 18 1,540 1,558 

(5th 20%) $50,876 - $75,275 14 1,197 1,211 
Additional Results Summary 

Included is a breakdown of groundwater pumping cost increases (aggregate) over regions 1-9 and 

10-21C. Note that this is the increase in groundwater pumping cost due to drought, not the total 

cost of groundwater. 

90 Percent Exceedence Additional Groundwater Pumping Costs 

Region CVPM Regions Increase Groundwater Cost 

SAC 1-9 $5,305,000 

SJV 10-21C $141,659,000 

Total 1-21C $146,964,000 

50 Percent Exceedence Additional Groundwater Pumping Costs 

Region CVPM Regions Increase Groundwater Cost 

SAC 1-9 $5,305,000 

SJV 10-21C $131,539,000 

Total 1-21C $136,844,000