The Impact of Water Supply Reductions on San Joaquin Valley Agriculture During the 1986-1992 Drought

by Larry Dale, Lloyd Dixon


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In late 1994, California adopted more-stringent water quality standards for the San Francisco Bay/Delta and the San Joaquin and Sacramento River System and is deciding how the water-use reductions necessary to meet these goals should be split between agricultural and urban users. This report attempts to improve understanding of the likely effects of water supply reductions on agriculture. It examines economic theory, past empirical work, new data on the response of San Joaquin Valley farmers to water supply cutbacks during the 1986-1992 drought, and two models that are commonly used to predict the effects of water supply reductions. The report supplies up-to-date information on the effects of water supply reductions on agriculture, which will allow policymakers to review decisions to reallocate water from agriculture to the environment with more accurate information on the costs and benefits.

Table of Contents

  • Chapter One

    Introduction and Background

  • Chapter Two

    Farmer Response to Water Supply Reductions: Theory and Existing Empirical Evidence

  • Chapter Three

    The Impact of Water Supply Cutbacks During the Drought on Farmers in the San Joaquin Valley: New Empirical Evidence

  • Chapter Four

    Model Predictions of the Impact of Reduced Water Supplies

  • Chapter Five

    Evaluation and Policy Implications

  • Appendix A

    Supplemental Data on Impact and Control Counties

  • Appendix B

    The Determinants of Agricultural Land Values

The research described in this report was supported with Federal funds from the U.S. Environmental Protection Agency.

This report is part of the RAND Corporation Monograph report series. The monograph/report was a product of the RAND Corporation from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

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