Socioeconomic impact of 2005-2008 drought in Andalusian agriculture.

Meteorological drought is defined as the event that arises when precipitation is lower than average and initially affects rainfed crops; this is transformed into hydrological drought when persistent drought affects water storage. We have studied the economic impact of multiyear droughts by applying the economic surplus to the last severe drought (2005-2008) in Andalusia. The method is applied to both rainfed and irrigated agriculture. The results show negative effects on regional social welfare, with an estimated global loss of EUR 1512 million, although this negative impact is unequally distributed. There is a quantity effect (lower yields) and higher prices due to shorter supply. Overall, rainfed farms experience a negative impact on their income since higher prices only partially compensate for yield reduction, although, paradoxically, certain irrigation farms increase their income when higher prices overcorrect lower yields. Consumers are always negatively affected by drought. This result may aid in the design of agricultural policy models and drought-recovery policies.

Does drought always cause economic losses in agriculture? An empirical investigation on the distributive effects of drought events in some areas of Southern Europe.

Studies on the impacts of drought usually make the implicit assumption that there will always be a negative effect on the environment, the economy and society. However, other approaches, based for example on the framework provided by the consumer surplus theory, try to focus on the distributive effects of drought. In this paper, in the wake of such approaches, we address the question of the distributive effects of drought on agriculture, exploring and studying in depth the characteristics, the signs and the magnitude of the socio-economic impacts of droughts on specific significant agricultural areas in Europe. According to our estimations, essentially based on the analysis of trends and changes in production and prices, we found that drought events can create not only "losers", but also "winners". Some social groups (for example, some categories of farmers) can even "win", while others "lose" (for example, final consumers). These findings apparently introduce questions of social justice in the evaluation of the impacts of climate change.