FRESNO, Calif. — Up and down the San Joaquin Valley, vast fields that once grew cotton lie fallow, remnants of a boom and bust fueled by a worldwide demand for premium T-shirts and linens.  Farmers here have fallowed acres of Pima cotton by the thousands, threatening the region’s unlikely reign as the world’s biggest producer of the specialty cotton, also called Supima.  Environmentalists say that farmers should never have bet so heavily on a thirsty cash crop in this dry swath of central California — particularly a crop used for luxury clothing, as opposed to food.  As recently as 2011, American farmers planted a near-record 306,000 acres of Pima cotton, almost all of that in the San Joaquin Valley, consuming an estimated 249 billion gallons of water. That’s enough to meet the average yearly water needs of about 1.9 million households. But now, with reservoirs nearly dry, farmers in California’s hardest-hit districts have no surface water to irrigate their crops. At the same time, cotton prices have slumped, hurt by a global glut. Farmers may harvest as little as 100,000 acres of Pima cotton in California this year, according to the latest forecasts.  Purveyors of Pima say that the soft, extra-long fiber, favored by high-end retailers like Brooks Brothers and Polo Ralph Lauren, is irreplaceable. And even more important, they say, it supports American jobs.  “It’s the world’s finest cotton,” said Jim Neufeld, a third-generation cotton farmer in Wasco, at the southern end of the valley. This season, he planted 250 acres of cotton, down from a peak of 11,000 acres in the 1990s.  “It simply doesn’t fit into today’s environment,” he said.  Pima cotton brought in $500 million last year, almost all of it grown in California, and generally commands at least twice the price of the more common variety, upland cotton. It was long the exception to the backdrop of the state’s overall cotton production, which has been declining for decades, hurt by recurring droughts that drain water levels and increasingly pesticide-resistant insects like the pink bollworm.  Pima, sometimes referred to as the “cashmere of cottons,” has longer, stronger fibers than upland cotton, improving its softness and luster.  The luxury cotton was introduced to California in the 1990s, and farmers quickly realized that the arid, expansive San Joaquin Valley was ideal for the crop, which agricultural officials had hoped could rival premium Egyptian cotton.  “It’s a just-add-water kind of location,” said Robert B. Hutmacher, a cotton specialist at the University of California’s Division of Agriculture and Natural Resources. “Of course, just-add-water used to be much easier to achieve.”  The ideal conditions were not the only factor driving its production. A trade group, called Supima, financed by farmers and supported by federal subsidies, spent heavily to generate demand from textile mills.  Supima has organized shows at New York Fashion Week, sponsors an annual design competition and opened a SoHo pop-up store, trucking in some 1,000 cotton plants to transform a parking lot into an urban cotton field.  Pima cotton quickly became the fiber of choice for premium shirts and bedsheets at luxury retailers, including Brooks Brothers, Polo Ralph Lauren, Lands’ End, Uniqlo, Agave Denim, Everlane and James Perse.  The high prices that Supima commanded meant that cotton farmers could afford the rising costs of water. Farmers invested in special cotton gins to more gently separate the fluffy Pima cotton from its seed. Improvements in yield meant California farmers could reap 1,200 to 1,300 pounds per acre, about twice the average for the entire country.  By 2011, the United States was the world’s biggest producer of luxury cotton, eclipsing major premium cotton producers like Egypt and China, according to data from the cotton merchant Paul Reinhart.  “They were chasing markets,” said Tony Azevedo, a cotton farmer in Stratford, south of Fresno, who this year planted 2,400 acres of Pima cotton, down from 3,600 acres in 2011. “We’ve always been straight and steady. But I became nervous about pricing ourselves out of the market.”  Apparel manufacturers, wary of ever-higher prices, started to shift to synthetic fibers, marketing stretchy yoga pants and other sportswear that used little or no cotton. China started ramping up cotton production after several years of declines. Cotton demand and prices started to slump.  Now, the drought is proving to be the cotton’s undoing. For two years, farmers in San Joaquin Valley’s main water districts have received no surface water, prompting some farmers to resort to pumping groundwater to irrigate their fields.  But experts say that is not a sound long-term strategy. Extensive overdrafting of the region’s aquifers has led to a precipitous drop in groundwater levels, especially in the southern part of the valley, where most of the Pima cotton is grown. California is working with farmers to regulate groundwater usage.  “The valley’s two groundwater basins that are probably the most over-droughted here in California,” said Tara Moran, head of the Sustainable Groundwater division at Stanford University’s Water in the West program. “Ultimately, people will have to make a decision about what kind of farming California can sustain.”  Cotton farmers are making efforts to cut down on water use, switching from flooding their fields to drip irrigation, which uses a network of tubes to let water drip slowly to the plants’ roots. The drip method halves the amount of water required to grow one acre of cotton, experts say. There are also efforts underway to replenish the region’s aquifers by putting water back into the ground through ponds and wells.  Still, some environmentalists question whether California should be growing cotton at all. They also say the government should not be subsidizing luxury cotton farming in a region experiencing severe water shortages.  Though Pima cotton has been exempt from the direct payments that have long sustained upland cotton farming, the most recent farm bill gives $4 million over the next five years to Supima to help market the premium cotton. The bill also allocates $16 million in aid each year through 2018 to American spinners and apparel manufacturers that use American Pima cotton.  “When water is short in California, it’s crazy for the government to be subsidizing luxury crops like Pima cotton,” said Tom Stokely, a water policy analyst at the California Water Impact Network. “It just doesn’t make sense. It’s not something that benefits the public at large.”  Cotton industry officials say cotton plants use about 40 percent less water than crops like almonds. And tree crops like almonds and pistachios must be watered every year, but cotton fields can be fallowed if water restrictions become too severe, making it a versatile crop, they say.  California’s cotton industry also supports more than 25,000 jobs on farms and in gins, mills and warehouses, according to the California Cotton Ginners and Growers Association, and another 137,000 jobs in related industries, like apparel.  Buxton S. Midyette, Supima’s vice president for marketing and promotions, said he did not think the drought would last forever. Even in drought conditions, water supplies could be better managed to leave water for some cotton production, he said.  Mr. Midyette also noted that consumers’ support for local food crops did not appear to extend to fiber crops.  “Here’s this American-grown cotton that continues to be grown here in multigeneration families,” he said. “And it’s the best in the world.”  In an interview, Joe Dixon, senior vice president for sourcing and production at Brooks Brothers, said the drought had not yet had an effect on the supply of Pima cotton needed for the company’s products, including four million shirts a year. Nor, he said, is the company contemplating reducing its Pima cotton use for environmental reasons.  “We want to use the best raw materials for our products,” he said. “Supima is the finest.”  “I don’t think people are unable to drink water because we’re growing cotton,” he continued. “As long as it’s available, we’ll continue to buy it.”  But for some farmers, economics drive the decision to shift away from the crop.  Don J. Cameron grew cotton for 35 years at his ranch southwest of Fresno, shifting primarily to Pima cotton in the 1990s. But after 2011, when he grew about 400 acres of cotton, his acreage plummeted, and by 2013 his Pima cotton crop was down to 40 acres.  He planted no cotton this year, instead growing tomatoes and other vegetables, which are more profitable per gallon of water.  “We produced the best cotton,” he said. “It’s going to be very hard to replace.”  But farmers like Mr. Neufeld of Wasco say that investments he made during the boom years tie him to the crop. He and other local farmers spent $4.5 million to build a new gin in the late 1990s, he said.  “To turn around and junk it now would be too disheartening,” he said. “We may be forced to give it up — we don’t know — but I’m one of those guys really trying to make it work.”  A version of this article appears in print on August 8, 2015, on page B1 of the New York edition with the headline: A Cotton Industry Withers Out West. 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The crop, used in high-end clothing, has been hit hard by the drought, and farmers and officials are struggling to preserve the industry and the environment.