Floods and economic shock

Visuals of the devastation caused by the floods to private and public property across the country are heart wrenching.
If you are living in a mud house, and your asset is one cow or two goats, and they are suddenly lost in front of you in a matter of hours, your life is shattered.
If you are a small or even large farmer, and your sugarcane or cotton crop of the season is destroyed, you will be exposed to a significant shock, which can lead to indebtedness. This is the story of hundreds and thousands of households today in Pakistan.
Estimation of loss is a precondition for effective intervention, and one needs to take visuals and headlines with caution. I will offer my back-of-envelope estimate of losses to the private property due to these floods. As more data is flowing in, this can be considered a preliminary estimate.
The loss to agricultural part of the rural economy is significant. As crops standing on 2 million acres have been flooded, though may not be completely destroyed, it suggests a loss of 8.33% of agricultural production, as Pakistan has approximately 60 million acres of cropped area.
We lost cotton crop on about 1.84 million acres, which translates into Rs337 billion, a loss of almost one-third of the anticipated production this year.
Rice crop was affected too as 602,120 acres out of 8.74 million acres were destroyed. Sugarcane crop on 729,582 acres out of a total of 3.11 million acres was affected. The headlines are suggesting widespread loss of livestock, which constitutes 60% of Pakistan’s rural economy or, in other words, 14% of gross domestic product (GDP). However, in reality, the total loss caused by these floods to the livestock economy is insignificant.-Agencies