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New Report: The Lies of Congressmen Nunes, Cardoza and Corporate Ag Exposed: Media reports exaggerate water caused job losses up to 15 times actual impact

by Bill Jennings, CSPA Executive Director
August 11, 2009 -- A comprehensive new study by University of Pacific Economics Professor Jeffry Michael, Director of the Business Forecasting Center, has torpedoed the lie that measures to protect fish have triggered massive agricultural unemployment in the Central Valley.  The report titled Unemployment in the San Joaquin Valley in 2009: Fish or Foreclosure found that “reductions in water deliveries due to environmental regulations have increased the Valley unemployment rate by 0.1 percentage point and the drought 0.2 percentage points for a total water shortage impact of a 0.2 percentage point increase in the unemployment rate.”  This compares to a 4.5 percentage point increase in construction unemployment caused by the foreclosure and housing crisis that continues to drive job loss in the Valley.

And the 0.1 point increase is something of an illusion.  Actual farm labor employment has been steadily increasing since 2004 and throughout the present drought.  Indeed, farm labor jobs in the seven south-of-Delta counties in the Valley increased by 15,500 between June 2006 and June 2009.  However, recession caused private nonfarm employment to decrease by 33,700 jobs between June 2006 and June 2009.

Clearly, agriculture has been the bright spot in the Valley economy.  This is also born out by the reports submitted by County Agricultural Commissioners that show significant increase in the value of crop production in 2007 and 2008.  For example, Fresno County has experienced record production in both 2007 and 2008.

The study rips two reports by U.C. Davis Professor Richard Howitt that initially claimed revenue losses of $1.2-$1.6 billion and job losses of 60-80,000; later reduced to $627-$710 million loss in revenue and 31-35,000 jobs.  Water exporters have shamelessly promoted Dr. Howitt's estimates as proof that protecting fish was causing people to suffer. 

However, Howitt didn't do his own economic modeling and his claims were based upon assumptions of multiplier effects far larger than other published studies of California agriculture.  Dr. Howitt claimed that 50 jobs were affected for every $1 million change in agricultural revenue.  Dr. Michael points to published studies that consistently report far lower multiplier effects: 11.7 jobs per $1 million (Summer et. al., Berkeley Economic Consulting); 23.8 (Sunding et. al., UCD Ag. Issues Center); 16.4 (Michael et. al. (UOP) and 11-21 (Univ. of Georgia evaluating the Georgia drought).

Dr. Michael also discusses at length the fact that farm labor employment per unit of yield has been plummeting due to changes in cropping patterns and increased agricultural production efficiency.  This has had the effect of reducing the labor intensity of agriculture.  The report extensively discusses the widely reported fact that in recent years agricultural representatives and, even Senator Feinstein, have been blaming a shortage of farm workers for agricultural production difficulties.

Lastly, the report addresses the impacts to the small towns on the Westside of Fresno County.  It points out that before State Water Project water was brought to the area, unemployment was in the single digits in the 1960s and 70s but, after the arrival of subsidized water, unemployment doubled, tripled and even quadrupled in the 1990s and 2000.  It discusses the fact that recent Mendota unemployment figures are extrapolations from the 2000 census data and that much of the recent unemployment can be traced to construction losses and the closure of food processors due to changing cropping patterns.

The California Sportfishing Protection Alliance hopes that state and national media report the actual facts of agricultural impacts due to fish protection measures half as aggressively as they have parroted the inflated claims of the hydraulic brotherhood.


Unemployment in the San Joaquin Valley in 2009: Fish or Foreclosure