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<br />OuOHO <br /> <br />REVIEW COpy <br />SUBJECT TO REVISION <br /> <br />giving a net saving of 5.7 percent or almost $3.7 billion. The stabilizing effect on <br />employment is notable, particularly in the northern area, which is more dependent on <br />agricultural production. For the whole Region, a drought year employment loss of 2.7 <br />percent converts to a 3.8 percent gain with the import of enough water to maintain <br />irrigation at the 1977 acreage level. <br /> <br />Increased Enel'llV Prices <br /> <br />If oil and gas prices are 20 percent higher than for the Baseline Case, total <br />value added in the region would rise by 6.8 percent in 2000 and 2.8 percent in 2020. <br />A 20 percent energy price increase boosts the regional economy by 7 percent in 2000 <br />and 2.0 percent in 2020. Employment rises by 7,000 jobs in 2000 and 5,000 in 2020 <br />- with most gains occurring in the southern subarea. <br /> <br />National Policies <br /> <br />National policies affecting foreign trade, full employment, income, interest rates, <br />and inflation wUl have significant impacts upon the High Plains region. The results <br />of this study are sensitive to the commodity price projections, and these, in turn, are <br />sensitive to the demand for export of U.S. farm products. The assumptions used to <br />estimate export demand are reasonable if relatively free trade in agricultural commodi- <br />ties continues and there is no major shift in the relationship between domestic production <br />and demand for food in the countries which are currently major customers for U.S. <br />farm products. A collapse in the export market would have a more significant effect <br />on the economy of the High Plains Region than likely variations from the projected <br />levels of energy price, agricultural productivity, 01' domestic economic growth used in <br />this study. <br /> <br />Development Potentials for the Non Al!'ricultural Sectors of the Hil!'h <br />Plains Economy <br /> <br />During the past 20 years, the High Plains Region's population increased by about <br />five percent, a significantly lower increase than the 26 percent increase for the United <br />States. The Region's employment increased by 32 percent, compared to a U.S. increase <br />of 50 percent. Agricultural employment declined throughout this period. Most of the <br />Region's employment growth was the result of a growth in the manufacturing and <br />service sectors. <br />During the 1970s, the Region grew at about the same rate as the rest of the <br />country. The major factors supporting this increased growth were: (l) oil and gas <br />booms in western Texas and southwestern Kansas due to price increases and price <br />decontrol, and oil field equipment, financial and technical services needs of this industry, <br />(2) increased number and sizes of feedlots and meat proceSSing, cotton ginning and <br />textiles, and growth of agricultural prOduction-input supply sectors. <br />Manufacturers have moved to the area to take advantage of the productive labor <br />force. Most growth in manufacturing has occurred in three metropolitan areas <br />-Midland-Odessa, Lubbock and Amarillo - and in the High Plains of eastern Nebraska. <br />Increases in agricultural productiGV1 have been forecast for the Region for the study <br />period, and the value of oil and gas production is expected to rise in the near term. <br />This presents opportunities for further increases in industries and services related to <br />agriculture and energy. <br /> <br />-14- <br />