Estimated Estimated Percent Estimated Percent
Total Change Total Change Change in Total Change Change in
Year in Sales in Income2 Income Employment3 Employment
(1) (2) (5) (7) (10) 1988 ($21,407,581) ($10,437,794) -3 (281) -3 1989 (32,006,506) (14,979,660) -4 (414) -4 1990 (35,010,869) (17,172,047) -4 (446) -3 1991 (60,888,832) (28,501,034) -7 (785) -6 1992 (38,252,498) (17,514,643) -4 (498) -4 1993 (41,490,216) (19,099,378) -4 (527) -4
1 All dollar values are in 1991 dollars. Values in parentheses represent negative numbers. For example, when
the change in sales is negative then the Water Quality Programs (WQPs) reduced total sales in the area from what they would have been had the WQPs not existed.
2 Income includes wage and salary, proprietor’s income, profits and rents.
3 Employment is the number of full-time and part-time jobs and includes wage and salary employment and self-
employed. A negative employment number of, say (500), means that 500 fewer jobs existed in the economy because of the water quality programs.
The economic impacts to the regional economic impact area (REIA) were about three percent greater than those reported in Table 10.4. The economic activity generated from milk production in the milk production study area is concentrated in Okeechobee County. Dairies in the MPSA rely on Okeechobee County and out-of state resources to a greater extent than on resources in nearby counties. For example, about 50 percent of dairy production cost is for feed, which is purchased from suppliers outside Florida. Differential Impacts to Relatively Small Businesses
Barns participating in the Dairy Buyout Program tended to have smaller than aver- age milk cow herd sizes. The loss of these barns increased average barn size by 155 cows. For the required Dairy Rule modifications, including permanent shade structures, the total cost per cow was higher for large barns than for small barns. After State reim- bursement, dairies with small barns paid, on average, $478 per cow for the required modifications while dairies with large barns paid $606 per cow. The total capital cost of all investments made and paid for by dairies (after cost-sharing) when making the Dairy Rule investments was $486 per cow for dairies with small barns and $1,249 for dairies with large barns.
Changes in Tax Revenues of Local Governments
The water quality programs reduced ad valorem tax collections by about $37,755 which was a tiny fraction of the $17 million in ad valorem tax collected by Okeechobee County in 1992. Tangibles tax collections fell by $13,500 in 1993. The water quality pro- grams changed Okeechobee County retail tax collections by about three percent in all years except 1991 when sales tax collections were five percent lower than what they would have been had the water quality programs not existed.
Impacts of the Water Quality Programs on the Florida Dairy Industry in the Rest of Florida
Most of the reduced milk production in the milk study production area was offset by increases in milk production in the rest of Florida. The rest came from imports. The Florida Dairy Farmers Association, the marketing cooperative for dairies in the Basin, stated that the members of the association absorbed any cost increases. Therefore, there were no increases in wholesale or retail milk prices due to the water quality programs. USES OF THE ECONOMIC IMPACT ANALYSIS
The final report with technical appendix was submitted to the District and was pre- sented to District staff and Okeechobee county residents and businesses in October 1995. In March 1996, the results of the study were presented to the District’s Governing Board during a public workshop. The study and the presentations were well received by the Board and the Okeechobee community. The results demonstrated that significant costs and local economic impacts occurred due to the WQPs. The information con-
tained in the report was used to evaluate additional water quality programs and to assess the economic and financial feasibility of best management practices in the Okeechobee Basin.
REFERENCES
Hazen and Sawyer, P. C. 1995. Analysis of Economic Impact — Water Quality Programs, Lake Okeechobee Watershed. Prepared for South Florida Water Management District. Final Report. West Palm Beach, Florida.
USDA/ERS. 1995. Food Consumption, Prices and Expenditures, 1970 to 1993. Washington, D.C.
The Everglades Forever Act enacted in 1994 was designed to curb environmental degradation in Florida’s Everglades ecosystem. In designing regulations for restricting stormwater runoff and implementing best management practices, concern was raised over the long-term economic implications. Consequently, the state undertook an eco- nomic impact analysis to identify and quantify those implications on agricultural and other development interests in the regional and state economies. The study was unique in that it examined alternative stormwater management programs over a 20-year period, from 1994 through 2013. Hazen and Sawyer (1993) provide a detailed description of the methods and results of this economic impact study.
RESOURCE MANAGEMENT ISSUE
F
or decades, the Everglades watershed south of Lake Okeechobee has been under intense agricultural and suburban development. Growers immediately south of the lake in the Everglades Agricultural Area (EAA) produce sugar cane, vegetables and sod. In 1991, some 522,000 acres were in agricultural production — the predominant use is the production and milling of sugarcane into raw sugar. The EAA provides about 25 percent of the sugar consumed in the United States; vegetable production includes celery, lettuce and sweet corn, while a relatively small amount of land is in rice produc- tion.The EAA generated about $1.5 billion in sales in 1990. Agriculture, sugarcane milling, retail trade, wholesale trade and services were the primary economic activities. The area supported about 15,600 jobs in 1990.1Over 17,000 households comprised of
117
CHAPTER 11
THE
EVERGLADES
FOREVER
ACT IN THE
EVERGLADES
AGRICULTURAL
AREA:
ECONOMIC
IMPACTS OF
NON-POINT
SOURCE
POLLUTION
CONTROLS
Grace Johns
1 Does not include the cane cutters (employees under H-2A program) and seasonal harvest labor. In 1991,
7,878 people entered the United States from other countries to cut cane for the 1991- 92 harvest season. An additional 6,000 seasonal farm workers harvested vegetables, rices and sod during the harvest season.
51,400 people lived in the EAA in 1990; one in every three households had lived in the EAA for more than ten years.
To grow sugarcane, vegetables and sod in the Everglades Agricultural Area, water table levels are managed throughout the year. During periods of excessive rainfall, water is drained into farm canals and ultimately enters the South Florida Water Management District’s canal system flowing south into the water conservation areas and the Everglades National Park. The District and the Environmental Protection Agency were concerned about high phosphorus concentrations in the drainage water because of potential harm to native flora and fauna in the wetlands. Concern was also growing about protecting water supplies, nurturing valuable commercial finfish and shellfish populations, providing unique recreation opportunities and attracting tourists. Throughout the years, preserves as well as a national park were established and signifi- cant state regulations were adopted to enhance and protect the rare Everglades ecosys- tem.
In 1991, the Governing Board of the South Florida Water Management District sought an understanding of the economic impacts that proposed stormwater control programs in the EAA would have on the regional and state economies. Public concern had been raised in Okeechobee County over apparent contraction of the regional econ- omy from the dairy wastewater managemnt programs north of Lake Okeechobee. Concurrently, the District Governing Board recognized the potential for negative eco- nomic impacts from new regulations.
In 1992 and 1993, a regional and statewide economic impact analysis was prepared to estimate the “ex-ante” changes in sales, income and employment that could be expected from alternative stormwater management programs in the EAA. The study’s forecast period was 1994 through 2013, a period of twenty years. The specific stormwa- ter management programs evaluated were the following:
• Conversion of 35,000 acres of land from agricultural production to Stormwater Treatment Areas (STAs) and construction and operation of the STAs.
• Implementation of best management practices (BMPs) by all growers in the Everglades Agricultural Area (EAA) to reduce phosphorus in the drainage water. • Landowner payment of one of three levels of annual per acre assessments on land
in the EAA, $10, $25 and $100, to finance the Stormwater Treatment Areas.
In 1994, the State of Florida enacted the Everglades Forever Act after years of litiga- tion and mediation. Focusing on the control and treatment of stormwater runoff from the EAA, the Act resulted from the settlement agreement between the United States and the South Florida Water Management District after intensive and lengthy media- tion among the U.S., the State of Florida, growers in the EAA and environmentalists. The Everglades Forever Act replaced the Marjory Stoneman Douglas Everglades Restoration Act, which was less specific regarding the details of the stormwater regula- tion process.
Under the new Act, growers in the Everglades Agricultural Area are required to obtain a permit to discharge water into the “Works-of-the-District.” These works are the canals that drain water from the EAA. To obtain a permit, applicants must present the District with a farm management plan designed to reduce the amount of phospho- rus in the drainage water.
The settlement agreement requires the District to purchase 34,700 acres of land in the EAA to be used for filtering phosphorus from the drainage water prior to it enter- ing the water conservation areas and the Everglades. The agreement called on the District to develop a method to finance the purchase of land and the construction of the “Stormwater Treatment Areas” (STAs). Currently, about 40,000 acres of STAs are being designed and built in the Everglades Agricultural Area.
ECONOMIC IMPACT OF THE WATER QUALITY PROGRAMS IN THE EVERGLADES