Economic impact studies are a vital tool for quantifying the significant contributions of industries, organizations, and initiatives to local economies. By measuring direct, indirect and induced effects on jobs, income, tax revenues and more, these studies tell a powerful story about the economic value generated. For example, a recent study found that CSA programs across the U.S. stimulate over $2.2 billion in local economic activity each year while creating 13,629 jobs. Policymakers, business leaders, and communities increasingly rely on the compelling data from economic impact analyses to guide decisions, secure funding, and build support for important causes. When done well, they are an indispensable arrow in the quiver of any organization looking to demonstrate their economic importance and rally stakeholders around a common purpose.
How Economic Impact Studies Measure Value
Direct, Indirect, and Induced Effects
Economic impact studies of local agriculture typically examine three main categories of effects: direct, indirect, and induced. Direct effects refer to the immediate economic activity generated by farms and agricultural businesses, such as revenue from crop sales and wages paid to farm employees. Indirect effects capture the ripple effect of farms purchasing goods and services from other local businesses, like equipment, seeds, and professional services. This supports jobs and economic activity in related industries. Induced effects occur when farm owners and employees spend their income in the local economy on housing, healthcare, dining out, and other goods and services. Together, these effects demonstrate how local agriculture stimulates economic activity, creates jobs across multiple sectors, and helps keep more dollars circulating within the community. For example, a study might find that for every $1 in direct sales, an additional $0.50 is generated in indirect and induced economic activity – magnifying the total economic impact of local farms and food producers.
Common Metrics and Multipliers
Economic impact studies utilize various metrics and multipliers to quantify the effects of an industry or project on the local economy. Common indicators include job creation, which measures the number of full-time equivalent positions supported by the economic activity. Labor income reflects the wages, salaries, and benefits earned by workers. Value added represents the contribution to the region’s gross domestic product (GDP), while output measures the total value of goods and services produced.
Multipliers are used to capture the ripple effects of spending as it circulates through the economy. For example, an output multiplier of 1.5 means that for every dollar of direct spending, an additional $0.50 is generated in indirect and induced economic activity. Multipliers vary based on the specific industry and region, with higher multipliers indicating a greater economic impact. By applying these metrics and multipliers, economic impact studies provide a comprehensive picture of how local agriculture and CSAs contribute to job creation, income generation, and overall economic growth in their communities.
Economic Impacts of Local Food Systems
Strengthening Local Economies
When consumers buy from local farmers, a significantly higher percentage of each dollar stays within the community compared to shopping at supermarket chains. This recirculating revenue strengthens local economies by supporting local jobs, businesses, and economic activity. Studies show that small farms reinvest more money locally through purchasing from other area businesses and service providers.
CSA programs exemplify this economic benefit, as members’ investment goes directly to their farmer, cutting out middlemen. Farmers then spend those dollars on local supplies, equipment repairs, and employees – amplifying the community impact. Some research indicates that up to 4 times more money stays local when food is sourced from small regional farms versus large corporate suppliers.
By intentionally directing food dollars to independent growers, engaged citizens can profoundly invigorate their local economy’s circulatory system. Each CSA share or farmers market purchase represents a meaningful contribution to a more resilient, self-reliant community.
Creating Jobs and Entrepreneurship
Local agriculture plays a vital role in creating stable jobs and encouraging entrepreneurship in communities. By supporting small-scale farmers and locally-owned businesses, we can build resilient local economies that provide meaningful employment opportunities.
When you buy from a CSA or shop at your farmers market, you’re directly supporting the livelihoods of hardworking farmers and their employees. These small farms often hire locally, providing jobs to members of the community who may otherwise struggle to find stable work. Farming jobs span a wide range, from planting and harvesting crops to managing farm stands and delivering produce to customers.
Local agriculture also spurs entrepreneurship by inspiring people to start their own farming ventures or create businesses that support the local food system. From artisanal food producers using locally grown ingredients to companies offering farm-to-table catering services, the possibilities for innovative small businesses are endless.
As these farms and food businesses grow, they create even more job opportunities. A thriving local food scene can also attract tourists, further boosting the economy. By choosing to spend our dollars on locally grown food, we’re investing in the economic well-being of our communities and helping to create a more sustainable and prosperous future for all.
Driving Economic Resilience
Local food systems provide economic stability during challenging times. When the pandemic disrupted supply chains, communities with strong CSA programs and farmers markets had more reliable access to fresh, healthy food. Small farms quickly pivoted to online sales and home delivery, ensuring income for farmers and food security for residents.
Studies show that every dollar spent on local food generates up to $2.60 in local economic activity, as money recirculates within the community. This “multiplier effect” supports jobs, businesses, and public services. In contrast, only about $0.40 of every dollar spent at large supermarket chains typically stays local.
Investing in local agriculture also protects farmland from development, preserving green space, ecosystem services, and tourism opportunities that diversify rural economies. As we navigate an uncertain future, building resilient local food systems is a smart strategy for communities of all sizes.
Communicating Economic Value to Stakeholders
Tailoring the Message
When presenting the findings of an economic impact study, it’s important to tailor your messaging for different audiences. For local government officials, highlight how supporting CSAs and local farms can create jobs, generate tax revenue, and stimulate the local economy. When speaking with consumers, emphasize the personal benefits of buying from CSAs, such as access to fresh, high-quality produce and supporting their community. Farmers and agricultural organizations will be interested in data showing the economic sustainability of small-scale farming and opportunities for growth. By framing the results in terms of each audience’s priorities and values, you can more effectively communicate the importance of local agriculture and inspire action to support it. Adapting your language and level of detail to each group will help the message resonate. With compelling, targeted communication, economic impact studies can be a powerful tool for building support for thriving local food systems.
Partnering for Wider Reach
Local food advocates can amplify their message by partnering with economic development organizations that share an interest in supporting thriving local economies. These partnerships create opportunities to showcase the positive economic impacts of local agriculture to a wider audience of business leaders, policymakers, and community members.
One effective collaboration is to co-host events that bring together farmers, entrepreneurs, and economic development professionals. These gatherings provide a platform to share success stories, discuss challenges and opportunities, and brainstorm innovative solutions to strengthen local food systems. By combining their networks and expertise, local food advocates and economic development organizations can attract more participants and generate broader community interest.
Another impactful partnership opportunity is to jointly develop and promote educational resources that highlight the economic benefits of local agriculture. These may include infographics, case studies, webinars, or even short documentary-style videos featuring local farmers and food businesses. By pooling their skills and resources, collaborators can create compelling content that resonates with diverse stakeholders and inspires action.
Local food advocates can also work with economic development organizations to advocate for policies and programs that support local agriculture as a driver of economic resilience. Together, they can engage elected officials, business leaders, and other decision-makers to build support for initiatives such as local food procurement policies, farm-to-school programs, or incentives for food enterprises. By presenting a united front and leveraging their collective influence, these partnerships can help create a more favorable policy landscape for local food systems.
Conclusion
In conclusion, economic impact studies play a vital role in building support for local agriculture by demonstrating the significant contributions that farms and CSAs make to their communities. By quantifying the economic benefits, these studies help to raise awareness, influence policy decisions, and inspire more people to support their local farmers.
As consumers, we all have the power to make a difference in our local food systems. By choosing to purchase from CSAs and farmers’ markets, we not only enjoy fresh, high-quality produce but also invest directly in the success of our local farms. This, in turn, strengthens our local economies, fosters a sense of community, and promotes sustainable agricultural practices.
We invite you to be part of the solution. Seek out opportunities to support your local farmers, whether through joining a CSA, shopping at farmers’ markets, or advocating for policies that prioritize local agriculture. Together, we can create a more resilient, sustainable, and vibrant food system that benefits us all.
