Drought forces industry to reduce workforce

Georgia’s urban agriculture industry will continue to lose profits and employees if drought conditions remain over the state this year, according to a University of Georgia survey.

UGA experts with the Center for Urban Agriculture conducted a survey in November and December last year to see how the current drought, which started in March 2006, has affected one of Georgia’s largest industries. Georgia’s Urban Agriculture Council helped develop and implement the survey.

In all, 168 landscapers, turfgrass farmers and retail and wholesale garden business owners responded with a gloomy economic picture.

“The business owners we surveyed reported substantial layoffs in 2007 resulting in the loss of 848 workers,” said Ellen Bauske, the center’s program coordinator. “If the drought continues, the businesses surveyed expect to lose an additional 708 employees.”

The drought is withering profits, too, along with the plants and grasses the industry produces and sells. Survey results show a monthly average loss of $37,516 per company.

“In an industry with a median income of $800,000 per company, many companies won’t be able to sustain losses of that magnitude,” Bauske said. “We can expect more news of bankruptcies, business failures and liquidation of company assets if the situation continues.”

Based on the survey, Bauske and her colleagues project devastating losses in the coming year.

“A calculated loss of $260 million per month can be contributed to the drought and water restrictions imposed on the industry,” she said. “If the current drought conditions continue, the results could grow to an annual loss of $3.15 billion and 30,000 employees.”

In all, it is estimated that 35,000 employees working in the Georgia urban agriculture industry have lost their jobs since the drought started. Business owners appear to be keeping full-time employees and cutting part-time and seasonal workers, she said.

For more detailed information on the survey and the economic impact of the drought, visit the publications section of the center’s Web site www.gaurbanag.org/industry.

By Sharon Omahen
University of Georgia