Wednesday, June 24, 2009

Georgia Drought vs. California Drought

In recent news reports about the Governor's request for a federal disaster designation, it has been noted that a similar request in Georgia was denied in 2006. That made me wonder how the economic impact of that drought compared to California's, and I found this report from agricultural economists at the University of Georgia.

How does it compare to the estimated California drought impacts calculated by UC-Davis? First, Georgia's crop losses were greater, $820 million compared to the most recent California estimates of $630 million. Most interesting to me are the estimated employment impacts.

Professor Howitt at UC-Davis has estimated 30-35,000 lost jobs from the $630 million decline in output. I have been critical of these employment estimates, as I have never seen agricultural multiplier effects that high in California or anywhere else. Thus, it is very interesting to see the Georgia job loss estimates were 9-17,000. Less than 1/2 the estimated job impact from a 30% larger loss in value.

Yes, there are differences in crop mix and other areas between Georgia and California agriculture, but Georgia has much more in common with Valley ag. than many other farming regions (cotton, nuts, and fruit are significant in both places for example). My rough estimates of drought related job losses (on farm and multiplier effects) in California have been closer to the number estimated for the Georgia drought.

So far, the employment data is proving me right about the California drought, but most of the peak months are still ahead of us so that could still change.

No comments:

Post a Comment