Economic Impact of the Ability of Nebraska Agriculture to Irrigate: The Case of 2012

Authors

Nebraska Farm Bureau
Decision Innovation Solutions

Date of this Version

11-16-2012

Abstract

With the harsh 2012 growing season behind for Nebraska crop producers, sights are now on the prospects for 2013. An exceptional drought gripped much of the United States from mid-June to the end of the growing season. In many regards, the drought persists in many parts of the country. Without significant moisture accumulations prior to spring planting 2013, drought conditions may continue into next year’s growing season. Since the drought of 2012 became a cause of concern in mid-2012, there have been discussions regarding ways to limit the use of water for agricultural purposes. Many of these discussions will result in the introduction of various policy proposals and regulations at the state, watershed, and county levels. In an effort to provide context regarding the importance of the ability of Nebraska crop producers to irrigate their crops, the Nebraska Farm Bureau has retained the services of Decision Innovation Solutions to estimate the state level economic impact of crop producers’ ability to irrigate.

Using methodology and assumptions outlined in this report, an estimated loss of $7.1 billion in direct economic activity would result from the inability of Nebraska’s crop producers to irrigate their land in a predictable, well-defined manner. While $7.1 billion is in and of itself a very large figure (represents 8.8% of 2011 Nebraska GDP), the losses multiply when the backward linkages of this loss are considered. In fact, when all rounds of economic activity are considered, the estimated losses to the State of Nebraska would be the following: 31,221 fewer jobs, $11.0 billion in lower Output, $5.5 billion in lower Total Value-Added , $3.3 billion in lower Labor Income.

In fact, when all rounds of economic activity are considered, the estimated losses to the State of Nebraska would be the following:  31,221 fewer jobs  $11.0 billion in lower Output  $5.5 billion in lower Total Value-Added  $3.3 billion in lower Labor Income