BAKERSFIELD, Calif. -- A statewide drought is just beginning to take its toll on Central Valley farming, one of the richest and most abundant agricultural areas in the U.S.

After two years of below average rainfall Gov. Arnold Schwarzenegger has proclaimed a statewide drought.

The governor's office has issued an executive order directing the state's response to unusually dry conditions that are damaging crops, harming water quality and causing extreme fire danger across California.

The governor stopped short of declaring a water emergency.

The water allocation to local farmers from the San Joaquin Delta has been cut 40 percent and that is affecting local growers

Mike Young of the Kern County Farm Bureau said, “We are in dire straights....”

California depends on winter snow accumulated in the Sierra Nevadas for much of its summer water supply. But March, April and May were the driest winter months on record.

That could mean hundreds of acres of crops won't be planted this year which supplies growers who produce about $1 billion worth of crops each year. And in turn could effect how much you pay at the store.

Officials said even though there are no water rations for residential use, people should do their best to conserve water at home.

The governor wants voters to approve a $12 billion bond to fund delta, river and groundwater improvements. But legislators have not agreed to the plan despite ongoing negotiations with the administration.