Purpose: In Argentina, soy and maize represent 28% of the total country exports, affecting the balance of payments, international reserves accumulation and sovereign credit risk. In the past 10 years, three extreme and moderate droughts have affected the agricultural areas, causing significant losses in soybean and maize production. This study aims to estimate the economic impact generated by different drought levels for soy and maize production areas through a financial perspective that allows the estimation of the cash flow and income losses. Design/methodology/approach: By analyzing the extreme deviations in yields during dry periods, the losses generated by droughts were valuated among 183 departments nationwide. Findings: The aggregated results indicated a total loss of US$24.170m, representing 57.45% of the international reserves of the Argentinean Central Bank in 2021. This estimate shows the magnitude of the climate impact on the Argentinean economy, indicating that severe droughts have macroeconomic impacts, with the external sector as the main transmission channel in an economy with historic restrictions on the balance of payments, international reserve accumulation and sovereign credit risk. Originality/value: This study analyses the macroeconomic impact of drought on Argentinean soybean and maize production.

This paper presents an evaluation of the economic cost of precipitation shortage in the production of lamb in Extremadura. Given that the production strategy is based on maintaining a productivity target by supplementing natural pastures in contexts of water scarcity, the approach will be based on the analysis of the cost structure of the sector. A monetized cash flow model will be presented, which allows us to evaluate economic impacts through a financial perspective. The study focuses on a set of 1583 farms associated into the cooperative EA Group. These members have a total of 804,000 animals, which represents more than 40% of total sheep in Extremadura. Results shows a relation between precipitation minimums and feed quantity maximums of the series analyzed. Mayor direct impact is represented by an increase in feed supplementation needs, with an economic estimation of 54 million euros over two years for the whole sector. At the farm level, there is an average reduction of profits of 50% in the case of owned land, and bankruptcy in the case of renting land. In the context of data-driven policy making, this estimate provides a tool for European Policy funding negotiation a in sector which is considered as highly strategic because of its positive impacts on the environment, the generation of employment and maintenance of rural populations in marginal areas and for the production of high-quality food with a minimal use of natural resources.

The economic cost of extreme and severe droughts in soybean production in Argentina

Extremadura, located in the southwest of Spain, is a region of high natural value, supporting high levels of biodiversity and ecosystem services. However, there is no comprehensive study that estimates the extent to which ecosystem services contribute to the main economic activities of the region. In this context, the aim of this paper is to provide a comprehensive economic estimation of the ecosystem services provided to the most important economic sectors in Extremadura (agriculture, livestock, forest, and recreational services). Different estimation methods were used given the variety of sectors involved, involving the direct market valuation, residual approach, replacement cost, travel expenditure, among others. The results show that the ecosystem services that have a direct impact on production levels represent 7.35% of the regional gross domestic product and 55% of the gross economic value of the related activities representing the potential production loss in the absence of these ecosystem services. This shows a great dependence of some economic activities on natural assets, of which the most important are the water used for irrigation, the Iberian breed, pollination, and grass for livestock. The economic valuation of ecosystem services is fundamental to sustainable development regional strategies.

Is the interest rate more important than inventories? The case of agricultural commodities in thecontext of the financialization process