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Developing Measures of the Economic Impact of Agriculture, Agri-Food, and the Agri-Industry Paper by Rich Allen National Agricultural Statistics Service USA
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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%.
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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.
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