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Lettuce field

Drip irrigation is used to water lettuse in the Salinas Valley.

Selling forecasts from bad numbers

I was recently sent the link to an article in which the sender wanted my assessment of a story. Without knowing the motivation behind the request, I complied.

The article had to do with a report out of the UCLA Anderson Forecast, which touts itself as one of the most widely watched and often-cited economic outlooks for California and the nation. Fair enough.

After seeing other news stories on the report and then finding a press release on the report, I have some concerns about how it could be used.

For instance, UCLA Anderson parrots the oft-mentioned statement that 80 percent of California’s water is consumed by agriculture. That’s simply not true!

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According to the California Department of Water Resources [4], agricultural uses in an average water year consume 42 percent of the state’s dedicated water supply; 11 percent is consumed by urban users and 47 percent goes to the environment. Those numbers vary in wet years and dry years, but it’s far from the 80 percent people like to cite. At the most, the state says agriculture consumes 52 percent of the state’s dedicated water supply in dry years.

I’m sure that number will be considerably lower this year as agriculture has been promised zero surface water and not growers have access to groundwater.

So, if UCLA Anderson’s numbers are wrong with respect to water use, what other assumptions, assertions and statements can we also question? Is it fair to surmise that bad numbers lead to false premises, which lead to poor policy decisions? If nothing else, poor assumptions are borne.

Reporting bad assumptions?

The Business Journal [5] picked up information from the report that suggests California’s drought impact will be minor.

The LA Times [6] had a completely different take on the report, suggesting that job growth in California could be hindered for years due to the drought. That’s certainly closer to what we’ve read in recent weeks regarding the drought’s impact to agriculture and the possibility of a 10-15 percent hike in grocery prices by this summer.

According to the UCLA Anderson press release while California’s drought “may affect certain agricultural sectors, the state overall will not be greatly affected by the unseasonably dry weather conditions.”

The Chico Enterprise Record [7] gets it. In a city that worships everything green, this defense of ample, blue water for agriculture is as refreshing as Big Chico Creek on a hot, summer day.

I know this may come as a shock to the unemployed farmworkers, and the tractor supply dealers and companies not able to sell products and services to growers this year because growers have had to fallow their farmland, but the forecast gets even more comical.

UCLA Anderson says the U.S. can expect 3 percent GDP growth this year. How can the nation’s GDP grow like that with nearly one million acres of farmland out of production in California and the real unemployment still north of 15 percent across this nation? Don’t tell me that national unemployment is below 7 percent when millions of jobs have been permanently eliminated since 2009 and countless numbers of Americans are under-employed or worse.

While 3 percent GDP growth is relatively positive given our recent plunge into economic recession and malaise, it’s hard to believe the assumptions of reports like this when blatant falsehoods are used to derive other assumptions and forecasts.

 

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