Macroeconomic Impacts of Water Use in Agriculture

The recent/current recession provides the opportunity to study the effects of the macroeconomic changes on the agricultural production systems in the Great Plains and trace some of its impacts through the system to changes in primary inputs such water resource use. Therefore, the objective of the study reported here was to determine the effects of the changes in macroeconomic conditions driven by the 2008 recession on irrigated crop production in a portion of the Southern Great Plains and its impacts on water use. The approach for the study was to: (1) use the 10-year baseline FAPRI projections, based on changes in macroeconomic conditions, of agricultural commodity prices and input costs between the beginning of 2008 and the beginning of 2009, and (2) apply these different conditions within the Southern High Plains Ogallala Model (OM) in three counties representing different water situations and cropping patterns in the region. Overall results indicate that the 2008 recession likely had a relatively small impact on water use in the Southern Great Plains. Water use within the region is responsive to economic forces only when increased pumping flexibility exists; when water withdrawals are already at or near capacity, macroeconomic changes and changes in pumping costs and commodity prices are not likely to change water use.

Issue Date:
Jan 15 2010
Publication Type:
Conference Paper/ Presentation
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JEL Codes:
E00; Q15; Q30; Q31
Series Statement:
Selected Paper

 Record created 2017-04-01, last modified 2020-10-28

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