The Economic Impact of Drought on the Irrigated Crops in the Segura River Basin

Abstract

Throughout history, the Segura River Basin, located in the south-east of the Iberian Peninsula, has suffered from countless drought periods. They have largely been managed as occasional episodes of crisis through the reduction of the resources applied or the mobilisation of extraordinary resources. Recently, the phenomena of drought and water scarcity have been incorporated into Spain's national hydrological plan. This has given rise to an improvement in their diagnosis and management and enables us to learn about how climate change affects their frequency and intensity. Agriculture is highly relevant in the basin, comprising mainly irrigated crops that represent more than 80% of total demand for a net area of more than 260,000 ha. There is an undeniable connection between this sector and the availability of water and in periods of drought, such as the recent episode in the Segura River Basin (drought declaration in the territorial area of the Segura River Basin through Royal Decree 356/2015 of 8 May), the reduction in the availability of water generates a significant impact on the agricultural sector. Therefore, by analysing the production value and net margin generated in the agri-food systems, both the values established in the 2015/21 Hydrological Plan and those estimated in the drought period 2015–2019, we seek to assess the economic impacts generated, as knowing the direct effect on the agricultural sector will enable us to quantify the opportunity cost resulting from not being able to apply 100% of the resources demanded.