As California’s drought stretches into a third straight year, the state’s agriculture industry is incurring billions in related losses, a new study has found.

The report estimates direct impacts on farm activity of $1.2 billion this year — up from $810 million in 2021.

But the effects of the drought in 2022 extended far beyond that $1.2 billion sum, according to the report, released by the University of California, Merced’s Water Systems Management Lab.

Impacts on food processing industries that depend on farm products were about $845 million in 2022 — up from $590 million last year.

“California is no stranger to drought, but this current drought has hit really hard in some of the typically water-rich parts of the state that are essential for the broader state water supply,” co-author John Abatzoglou, a professor of climatology at UC Merced, said in a statement.

Altogether, the combined direct and indirect consequences of the drought have reached about $2 billion in value-added losses this year alone, the researchers found.

These losses amount to a 5.9 percent reduction when compared to those of 2019 and also resulted in 19,420 job cuts, according to the study.

In addition to suffering the impacts of the drought, California’s agricultural economy has also suffered from supply chain disruptions, including the ability to ship crops out of state, the authors explained.

Such delays could result in increased inventory and influence some of California’s specialty crop prices, according to the study.

While acknowledging such negative effects of the drought on agriculture, the researchers found that things could have been worse.

Drought impact mitigation techniques — such as land idling and increased groundwater pumping and water trading — reduced potential economic losses, according to lead author Josué Medellín-Azuara, an associate professor of environmental engineering at UC Merced.

Meanwhile, some parts of California were hit much harder than others.

“The Sacramento Valley and its communities have been ground zero during this drought,” Alvar Escriva-Bou, a senior fellow at the Public Policy Institute of California, said in a statement.

Statewide idled land in 2022 grew by 750,000 acres in comparison to 2019 — with more than half of these farms located in the Sacramento area, according to the study.

Given that the region is typically much wetter, Escriva-Bou recommended increased investments in basin recharge and pumping infrastructure to bolster the region’s drought resilience.

“We need to more fully invest in building climate resilience in our rural, agriculture dependent communities as they are on the front lines of climate impacts to their economic base,” added co-author Joshua Viers, a UC Merced associate dean for research.

“We can only expect prolonged dry periods briefly interrupted by pronounced wet ones — which will further stress access to clean drinking water and steady employment, among many challenges,” Viers said.

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