Long-term Economic Impact
In many regions, over 75% of the topsoil was blown away by the end of the 1930s, but there was wide variation in the degree to which the land was degraded. Aside from the short-term economic consequences caused by erosion, there were severe long-term economic consequences of the Dust Bowl.
By 1940, counties that had experienced the most significant levels of erosion saw a greater decline in agricultural land values. The per-acre value of farmland declined by 28% in high-erosion counties and 17% in medium-erosion counties, relative to land value changes in low-erosion counties. Even over the long-term, the full agricultural value of the land often failed to recover. In highly eroded areas, less than 25% of the original agricultural losses were recovered. The economy adjusted predominantly through large relative population declines in more-eroded counties, both during the 1930s and through the 1950s.
The economic effects persisted, in part, because of farmers' failure to switch to more appropriate crops for highly eroded areas. Because the amount of topsoil had been reduced, it would have been more productive to shift from crops and wheat to animals and hay. During the Depression and through at least the 1950s, there was limited relative adjustment of farmland away from activities that became less productive in more-eroded counties.
Some of the failure to shift to more productive agricultural products may be related to ignorance about the benefits of changing land use. A second explanation is a lack of availability of credit, caused by the high rate of failure of banks in the plains states. Because banks failed in the Dust Bowl region with a higher rate of frequency than in the rest of the country, it was harder for farmers to gain access to the credit they needed to buy capital to shift crop production. Another reason is that profit margins to shift from a previously farmed crop to either animals or hay increased only slightly. Therefore, even if they knew about the benefits of changing land usage, the incentive to switch immediately was relatively small.
Read more about this topic: Dust Bowl
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