Transcript Developing Measures of the Economic Impact of Agriculture, Agri

Developing Measures of the
Economic Impact of Agriculture,
Agri-Food, and the Agri-Industry
Paper by Rich Allen
National Agricultural Statistics Service
USA
Clarifications
• This paper was written by a data user of
agriculture economic impact data, not a
data creator.
• The presentation will focus mainly on
considerations in creating a system and
include only a few details from an existing
economic impact data program.
Why Create an Economic Impact
Data Series?
• To clarify and emphasize the important
role that agriculture plays even as an
economy becomes less agrarian.
• To remind politicians and decision makers
of agriculture’s importance.
• To encourage investments and research in
agricultural related applications.
What is to be Measured?
• The value added is calculated for each
step of production, transportation,
manufacturing, distribution, and sales until
final goods are consumed.
• For example, grains are purchased for
feed to livestock. The livestock are then
sold for slaughter as meat. The total value
of the grains is not added to the total
livestock value.
How Difficult is it to Measure
Economic Impact?
• Data are needed from many sources.
• Information is needed on what inputs are
used for creation of manufactured goods.
• Data sources may differ in quality and not
relate to common time periods.
• Mixes of inputs vary from time to time in
the creation of manufactured goods and
even production of agricultural products.
How can a Country Get Started?
• Quantity measures are the starting point.
• Measures are needed for all agricultural
products.
• Measures are needed for other industries,
especially those which transport
agricultural products or use agricultural
outputs to create other products.
How are Different Uses of
Agricultural Products Measured?
• Marketing channel information is needed,
along with volumes and prices, such as:
• Corn fed to animals where produced.
• Corn for human food where produced.
• Corn sold to feedlots.
• Corn sold for processing into human food.
• Corn sold for processing, exports, or
special purposes.
How can Value Added be
Measured at the Farm Level?
• Production Expenditure surveys measure
use of agricultural inputs such as seeds for
growing crops or purchases of feeder
livestock and grains for producing
livestock for slaughter.
• Cost of Production surveys provide
detailed expenditure data for all costs,
including rent, interest, etc.
How can other Value Added
Measures be determined?
• Periodic surveys are needed for all
industries which calculate total volumes of
outputs and measure uses of agricultural
products.
• Surveys are needed which track new
products and new formulations of existing
products.
How do Input Relationships
Change Over Time?
• Changes in consumer preferences might
lead to more processed foods.
• Better processing techniques might result
in more output from the same quantity of
raw product (example of sugar cane).
• New products or uses may spring up, such
as ethanol from corn.
• Periodic surveys are needed for all
industries.
What do U.S. 2001 Food and Fiber
Data Indicate?
• Farming accounts for 0.7% of GDP and
1.4% of total employment.
• Food and Fiber account for 12.3% of GDP
and 16.7% of employment.
• Manufacturing and distribution account for
60.1% of total Food and Fiber value
added.
• Total inputs account for 34.0%.
How has U.S. Ag Economic Impact
changed over Time?
• Value of Food and Fiber GDP increased
from $887.2 Billion in 1991 to $1,244.6 B
in 2001.
• However, the Food and Fiber percent of
total U.S. GDP declined from 14.8% in
1991 to 12.3% in 2001.
• Percent of Food and Fiber employment
declined only from 18.5% to 16.7% from
1991 to 2001.