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Modelling drought and recovery in the southern Murray‐Darling basin

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  • Glyn Wittwer
  • Marnie Griffith

Abstract

The prolonged drought from 2006–07 to 2008–09 in south-eastern Australia presented severe difficulties for dry-land and irrigation farmers in the southern Murray-Darling basin. A dynamic multi-regional computable general equilibrium model (TERMH2O) is used to estimate the economy-wide small region impacts during and after drought. Drought reduces real GDP in some small regions by up to 20 per cent. Irrigation water trading and farm factor movements alleviate losses. The drought results in an estimated 6000 jobs being lost across the southern basin. Depressed farm investment during drought results in farm capital not returning to baseline levels after drought. Consequently, job numbers in 2017–18 remain 1500 below forecast in the southern basin.
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Suggested Citation

  • Glyn Wittwer & Marnie Griffith, 2011. "Modelling drought and recovery in the southern Murray‐Darling basin," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 342-359, July.
    • Handle: RePEc:bla:ajarec:v:55:y:2011:i:3:p:342-359
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    References listed on IDEAS

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    1. Glyn Wittwer & Simon McKirdy & Ryan Wilson, 2005. "Regional economic impacts of a plant disease incursion using a general equilibrium approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 75-89, March.
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    6. Freebairn, John W., 1983. "Drought Assistance Policy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 27(3), pages 1-15, December.
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    11. Kym Anderson & Signe Nelgen & Ernesto Valenzuela & Glyn Wittwer, 2009. "Economic contributions and characteristics of grapes and wine in AustraliaÂ’s wine regions," Centre for International Economic Studies Working Papers 2009-01, University of Adelaide, Centre for International Economic Studies.
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