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CR 13:165-172 (1999)  -  doi:10.3354/cr013165

The economic consequences of ENSO events for agriculture

Richard M. Adams1,*, Chi-Chung Chen2, Bruce A. McCarl2, Rodney F. Weiher3

1Department of Agricultural and Resource Economics, Oregon State University, Corvallis, Oregon 97331, USA
2Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843, USA
3Office of Policy and Strategic Planning, National Oceanic and Atmospheric Administration, United States Department of Commerce, Washington DC 20230, USA

ABSTRACT: Climate is the primary determinant of agricultural productivity. It is believed that in many parts of the world, including the United States, much of the year-to-year variation in climate can be traced to the El Niño-Southern Oscillation phenomenon. In 1997-98 the world experienced a severe El Niño event and this was followed by a strong La Niña in 1998-99. This paper develops estimates of the economic consequences of such events on US agriculture using a stochastic economic model of the US agricultural sector. Both phases result in economic damages to US agriculture--a $1.5 to $1.7 billion loss for El Niño and a $2.2 to $6.5 billion loss for La Niña. The range in these damage estimates reflects assumptions concerning the relationship between yields and ENSO weather patterns and how farmers respond to these potential yield differentials.

KEY WORDS: ENSO events · Economic effects · Agriculture

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