The Economic Impacts of the Climate Crisis

Posted on Tuesday, July 14th, 2020 by
A bell bean cover crop planted with funding from the Healthy Soils Program in CA.

The unprecedented financial impacts of COVID-19 on farmers and ranchers, now officially deemed essential, have brought long-term farm viability into sharp focus and have received a lot of attention in the media. A recent study found that pandemic-related losses in California agriculture are estimated to total $2 billion to date.While not as widely covered, the climate crisis also has economic impacts on growers. For example, the 2013-2016 drought exacerbated by climate change led to a $1.84 billion economic loss and 21,000 job loss for the state’s agriculture economy.

Climate change’s economic impact on California agriculture  

There is a wide range of climate impacts on agriculture that can lead to financial hardship for growers caused by yield losses, decreased efficiency and increased costs. Chief among these is constrained water resources and unpredictable precipitation patterns which will be among the most challenging effects of climate change for agriculture in California. Scientists predict even greater variability ahead, as well as increased intensity and frequency of extreme weather events. Water scarcity impacts the bottom line by sometimes causing land fallowing, yield drops and failures, and increased costs for buying, pumping and delivering water.

Warming temperatures affect agriculture in many ways, starting with the people who grow and harvest our food. Extreme heat worsened by climate change has surpassed pesticide exposure to become the current primary concern facing agricultural workers in California. This extreme heat during peak harvest time threatens productivity, often at the expense of farmworker health. Chill hours – a crucial part of the life cycle of many fruit and nut trees – are increasingly shortened by warming trends and can lead to lower yields.

Exacerbated by trends towards warmer temperatures and earlier snowmelt, today’s fire season in the western U.S. starts earlier, lasts longer, and is more intense compared to the last several decades. Fire and smoke damage has cost some California farmers dearly during the state’s last few historically damaging fire seasons.

More impacts and details can be found in CalCAN’s publication titled “Cultivating Climate Resilience in Farming: Ensuring California Farms and Ranches Thrive in the Face of Climate Change.”

Adaptation strategies on farm and ranches.

We have known solutions to many of the challenges the climate crisis poses. Another CalCAN report, “Climate Change Solutions in California Agriculture” details many of the way agriculture can meet the climate crisis with strategies that both curb greenhouse gas emissions and increase on-farm resilience to climate impacts.

Farmers and ranchers are employing a number of on-farm strategies to improve resilience to the myriad impacts of a warming climate, including these:

  • Building soil health — Investing in soil health is an investment in farm viability: healthier soils can produce higher crop yields, increasing profits for farmers by more than $125 per acre.
  • Diversification — Increasing crop diversity with rotations and intercropping builds resilience and limits the economic risk of major crop losses that can happen when large monocrop systems are affected by a severe weather event or pest infestation, two common climate-related impacts.
  • Planting and planning for the future – With adequate tools, information and technical assistance, farmers and ranchers can adapt planting and harvesting schedules to more closely align with climate changes, minimizing potential losses.
  • Water stewardship – In addition to lowering energy use and costs, improving on-farm irrigation efficiency decreases dependence on often scarce and unreliable water availability in California. 

California meets the climate crisis

Boonville Barn Collective (Mendocino County)
Boonville Barn Collective (Mendocino County)

Fortunately, we have the ability to meet the climate crisis with proactive solutions, instead of triaging with emergency responses after the fact. We just have to invest in them. California has four Climate Smart Agriculture programs that incentivize practices that mitigate the impacts of a rapidly changing climate while investing in long-term farm and ranch viability.

What impact have these programs had?  Check out our fact sheet from January 2020, detailing investments and program reach since program inception. Since that publication date, even more has been invested in the state’s agricultural climate solutions. In March 2020 the State Water Efficiency and Enhancement Program (SWEEP)  announced $9.7 million in grants for 125 farmers and ranchers and in May 2020 the Healthy Soils Program awarded just over $22 million for 316 projects.

Foundational to our food system’s sorely needed transformation into one that is resilient to crises and provides environmental and public health benefits, is ensuring that farmers stay in business. Many CalCAN publications dive into the effects of climate change, these sustainable solutions for farm viability, and the policy tools needed to unleash them. Be sure to check them out on our publications page.

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