Regional economic impacts of policy-induced changes in agricultural production: an example for the texas coast

Industrial regulation remains unavoidable in the continued effort to assure protection of the environment. The Coastal Zone Act Reauthorization Amendments of 1990, a renewal of the Coastal Zone Management Act of 1972, are but one example of that ongoing regulation. This study of a region in the Texas Coastal Bend can serve as a reminder that there are trade offs between environmental issues and economic issues that result from changes in regulation, although it is often difficult to quantify them. Results from a farm-level model's projected impacts of a policy alternative were incorporated into an input-output analysis to observe the economic impacts on a broader spectrum of industrial sectors for a regional economy. A total curtailment of agricultural herbicide and pesticide usage as a hypothetical response to environmental regulation is considered and is projected to 1) lower regional farm-level returns to management and fixed costs by over 37 percent, 2) lower total industrial output by $106 million, 3) reduce employment by more than 1500, and 4) reduce the regional population by more than 3,600 people. Further analysis suggests that structural changes in the regional economy over time have influenced the distribution of the impacts through the economy. The authors expect that best management practices (BMP) will make continued moderate use of agricultural herbicides and pesticides a possibility while assuring that environmental quality remains a priority in fragile environmental zones.