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Economies 2016, 4(3), 19; doi:10.3390/economies4030019

Socio-Economic Implications of Drought in the Agricultural Sector and the State Economy

Department of Geography and Environmental Sustainability, The University of Oklahoma, Norman, OK 73019, USA
Academic Editor: Ralf Fendel
Received: 3 June 2016 / Revised: 13 August 2016 / Accepted: 17 August 2016 / Published: 1 September 2016
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Abstract

In 2011, the most severe drought in Texas history caused $7.62 billion in losses in the agricultural sector alone. This paper analyzes ripple effects of the 2011 drought in Texas agriculture on the entire state economy retrospectively in an effort to foster discussion on targeted mitigation measures in the long term. By using an Input-Output and social accounting matrix model, direct effects on livestock, cotton, sorghum, wheat, corn, hay, and timber production, as well as indirect effects on other related sectors, and finally induced effects from changing consumers behavior have been estimated. According to the results, the 2011 drought caused economic losses of $16.9 billion in the entire Texas economy and increased the unemployment by around 166,895 people. The agricultural sector alone lost around 106,000 jobs. The cotton farming experienced 91% of revenue losses (as compared to 2010), while the livestock production lost 32% in revenue. The decreased production yields and limited market supply directly influence market prices for those products, which might create additional spillover effects on export and import quantities. The presented analysis can be helpful for designing policies to launch mitigation programs for drought events in the future. View Full-Text
Keywords: socio-economic analysis; drought, agricultural production; input-output analysis; IMPLAN; Texas socio-economic analysis; drought, agricultural production; input-output analysis; IMPLAN; Texas
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Ziolkowska, J.R. Socio-Economic Implications of Drought in the Agricultural Sector and the State Economy. Economies 2016, 4, 19.

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