ECONOMIC-IMPACTS OF WATER-QUALITY PROGRAMS IN THE LAKE OKEECHOBEE WATERSHED OF FLORIDA

For the past 20 yr, Florida has attempted to control phosphorus runoff from dairy manure into Lake Okeechobee. The elevated phosphorus level s in runoff water entering the lake has resulted in eutrophic conditio ns that threaten lake uses, including recreational and municipal water supplies. The lake watershed is also an important milkshed for southe astern Florida. In the 1980s, three water quality programs were implem ented by Florida state agencies in the bake Okeechobee basin in order to reduce phosphorus loads into the lake. This paper presents estimate s of the economic impacts of the three water quality programs on the e conomy of Okeechobee County and the regional area during the period 19 87 to 1993. Direct impacts of the water quality program include a 26% reduction in dairy cows and a 17% reduction in milk production in the affected area. Dairies that remained in production spent an average $1 .14/cwt (net of approximately 30% cost share) on both mandatory and op tional components. This additional private cost was more than offset b y the 13% mean increase in milk production that was experienced as a r esult of the investments. The total economic impacts of the water qual ity programs included a 4% ($18 million) decline in income and a 4% (4 92 full-time equivalents) decline in jobs.