Analyzing the Impact of Farming
Farming and forestry in Kentucky may seem like small elements of the total State budget if viewed from the standpoint of people actually raising crops and animals. But the spinoff jobs and products from these baseline occupations has a tremendous impact on the Commonwealth total income picture.
A recent study done by the Department of Agricultural Economics in the College of Agriculture at the University of Kentucky looked at the impact of farming, forestry, and their related businesses have on the State in terms of jobs and in the terms of total economic activity. This study looked at the role farming plays in the economy by capturing the impact or ripple effects the industry has on other segments of the Kentucky economy and ultimately linkages to food retailing. After all, that is where consumers meet production agriculture in the food system.
The study looked at three separate definitions of agriculture. The most narrow definition just included farming and farmers. This segment of the State's economy represented 3.2 percent of total State economic activity while accounting for 6.2 percent of all the jobs that the State citizen's have.
But agriculture has many linkages. Back into the acquisition of inputs but also forward into food and fiber and forestry processing. So a broader definition of agriculture looked at these important links. This broader definition of agriculture and it's related industries revealed that this system of production and processing represented about 9.5 percent of the State's total economic activity and nearly 12 percent of the State's jobs.
The broadest definition of agriculture includes where the consumers meets the food system and that is at the supermarket, convenience store and restaurants. We are talking about food retailing.
When retailing is included with these other segments of the food and fiber system -- inputs, production, processing -- this entire system represented 16.2 percent of the Commonwealth's total economy and more than 20 percent of the jobs.
Although farming and forestry production only represents a little over 3 percent of the State's economic activity, this industry has many linkages throughout the Kentucky economy ranging from inputs to processing to even retailing. These linkages between farming and the rest of the economy result in more than 400,000 jobs for the State's citizens.
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For additional information, please contact, Larry Jones.