ECONOMY IS ALSO VICTIM OF GREAT FLOOD OF 1993

Interviewed by one of the national news media folks who have come to cover the flood of 1993, a Southeast Missouri farmer dispensed some common sense to a coast-to-coast audience: If a reporter at CBS has a bad year, CBS still pays his salary, the farmer pointed out. On the farm, he added, it doesn't work that way. This observation hints at what will be a lingering effect of this flood. While the proper emphasis now is on protecting people and their property, high water will have an adverse impact on the economy in Missouri and Illinois.

Generally, it is difficult to get a handle on the total financial burden this flood will place on people in this area and throughout the Midwest. However, when you take into account the relative importance of industries involved, it isn't difficult to forecast that the impact will be significant and felt long after the water recedes.

Millions of acres of farmland are under water in both states, and some farmers face the prospect of seeing their entire crops lost. Ironically, farmers of ground far removed from the flooded areas might find higher prices at market; that is, if prolonged dry periods (an agricultural problem lost amid flooding news) don't destroy yields in some areas. One Missouri economist said that the 1973 flood, to which this flood most closely compares, caused, in today's dollars, $500 million in damage in Missouri and Illinois, with agriculture being hit hardest. Don't look for that to change this time around.

Distress on the farm is usually followed by price increases on grocery shelves. But, agricultural economists say, floods seldom generate the price disorder caused by drought. If flooding in low-lying ground is accompanied by little rain and an early frost on other farmland, crop losses will rise and store prices will likely follow suit. Keep in mind, though, that some costs related to getting food processed and to market (transportation, for example) may increase as a result of the flood and will be passed along the line to consumers.

Obviously, the business most closely associated with the river shipping has been put on hold by the flood. High water closed the Missouri and Mississippi rivers to barge traffic earlier this month, and estimates reach as high as $2 million lost daily by that industry. The Southeast Missouri Regional Port Authority near Scott City is under water and it remains to be seen what flood damages will need to be remedied before that facility functions again at full capacity.

Even the rail industry, which might stand to gain some freight business as a result of the flood, has been hurt because many tracks are under water.

Tourism is the state's second largest industry and, while flood sightseeing opportunities bring visitors to Missouri (along with some problems), state officials are hustling to get the word out that popular attractions (Branson, Lake of the Ozarks, most sites in the metropolitan areas) are unaffected by high water. These are critical months for the travel business, and Florida, hit by Hurricane Andrew last year, knows the tourism damage inherent to national news exposure of a natural disaster on the home front.

The primary concerns at this time are maintaining the barriers that protect property from the high water and getting relief to those whose lives have been disrupted by the flood. Ultimately, the economy will do what it must in response to natural calamity. As with the flood, we watch it and hope for the best.