Question

this is a research question about the economics of almond in california

What does the future look like for Almond production in the state of California given the drought condition in the state?

Answer 1

Almonds are one of California's most valuable agricultural products and among the top products exported from California. The EU along with China and India are among its top markets overseas. Water is very important for the production of almonds; each nut requires about 12 litres of water for growth. Irrigation and groundwater reserves are used extensively by farmers for almond production. This practice of farmers has been criticised heavily as it has led to land degradation and decrease in groundwater levels. And as drought hit California in 2011, water scarcity became even a bigger issue. Farmers struggled to irrigate almonds, making it difficult for them to grow a good stock. Prices of almonds increased, diminishing consumer demand. As a result, farmers planted new trees and removed the less-productive ones.

Even as the new trees would require lesser water, it would take about half a decade for them to grow in order to become fully productive. In the meantime, the supply of almonds will be affected. Thus, farmers need to think of ways to grow almonds that require lesser water as continuing to over-use groundwater in scarcity will not prove to be cost-effective. Modern agricultural techniques like micro irrigation could be employed to limit the use of water for growing almonds.

The demand for California's almonds continues to grow worldwide, particularly in China and India. However, given the trade wars between the US and China, measures need to be taken soon to strengthen the almond market further; China recently imposed about 50% tariff on almonds sourced from the US and consequently, Chinese companies switched from the US to other nations like Africa and Australia, leading to a loss in almond exports for the US. Farmers need to be encouraged more to employ water saving techniques for growing almonds like drip irrigation, as any deviation could result in substantial losses in the long run.