(Adds details of cutbacks, expected fallout, comment)
By Steve Gorman
LOS ANGELES Feb 21 (Reuters) - The worsening drought in California is expected to force a first-ever complete cutoff of federally supplied farm water to most irrigation districts in the state's Central Valley heartland this year, the U.S. Bureau of Reclamation said on Friday.
The projected zero allocation to most agricultural districts supplied by the federally run Central Valley Project comes three weeks after forecasts of similarly drastic cuts were announced by managers of a separate, state-operated water delivery system.
A return to wetter weather in the months ahead could ease the crisis but water managers said it would take an unlikely series of major late-winter storms to reverse the reduced irrigation supplies now being forecast.
Each farm will adapt in its own way, making up for some of the difference with groundwater reserves, which are also badly depleted, by purchasing what scant water they can from other sources, or by using carry-over supplies saved from the year before, experts said.
The only other option is to use less water, which means taking crops out of production. Some farmers will likely face bankruptcy, said Mike Wade, executive director of the California Farm Water Coalition, which represents the state's irrigation districts.
"The worst-case scenario is that they don't have the resources to carry on through one more dry year and could lose their farms," Wade said.
Based on the latest cutbacks projected, Wade's group estimates that more than 500,000 acres (200,000 hectares) of cropland will be idled this year, out of roughly 6 million acres (2.4 million hectares) open to farming in the region.
That tally would rank as the most farmland ever fallowed in California due to drought, a production loss that could cause billions of dollars in economic damage, he said. The coalition has said 15,000 seasonal and full-time farm jobs are currently at risk as a result.
DROUGHT'S IMPACT COULD REACH FAR
California grows nearly half of all U.S. fruits and vegetables, most of that in the Central Valley, and ranks as the top farm state by annual value of agricultural products.
Large-scale crop losses anticipated this year due to the drought would undoubtedly lead to higher consumer prices, especially for tree and vine produce grown only in California, though experts say it is to soon to quantify that effect.
The Central Valley Project, a sprawling network of dams, reservoirs, canals, tunnels and pumping stations, is the chief source of surface water for a vast, fertile region stretching 450 miles (720 km) north-sound from Redding to Bakersfield.
In normal years, the system delivers enough water to irrigate about 3 million acres in the region.
Smaller allotments that go to industrial and municipal users, including nearly 1 million households, also face deep cuts, along with water reserved for wetlands, fish and wildlife, a sore point for farmers who stand to get nothing this year.
The water originates from the Sacramento and San Joaquin river systems in northern California, fed by rainfall and snow-melt from the Sierra Nevada and nearby mountain ranges.
A similar system operated by the state typically provides at least some of the water used to irrigate more than 750,000 acres (304 hectares) of farmland and to meet the drinking supplies for some 25 million people.
But the Sierra snowpack is greatly diminished coming off the driest year on record in California. So too are the underground aquifers that have provided farmers backup supplies when surface water was otherwise scarce.
The announcement on Friday by the U.S. Reclamation Bureau, while not unexpected, marked the first time in the decades-long history of the Central Valley Project that farms throughout the region face the prospect of getting no water from the system.
Two separate groups of districts whose rights to water from the Sacramento or San Joaquin river basins predate construction of the Central Valley Project, which are thus guaranteed, will see deliveries cut by 40 percent under the latest allocations.
Still, Friday's news "underscores how broken the state's water supply system has become and that significant policy decisions and investments must be made to assure food production is a viable part of California's future," Wade said.
Ironically, the crisis is unfolding after an all-time banner year for California agriculture, with statewide production valued at $43.5 billion 2012 (Reporting by Steve Gorman; Editing by Alden Bentley, Grant McCool and Bernard Orr)