Impact of farmers' markets on economies within the United States

Farmers' markets are markets in which producers sell directly to consumers. While farmers' markets do not have a measurable impact on the United States economy as a whole, many studies have found that farmers' markets impact state and municipal economies as well as vendors, local businesses, and consumers. These impacts are measured using the IMPLAN Input-Output Model and the Sticky Economic Evaluation Device (SEED), in addition to other methods. The economic impacts that are most frequently measured include effects on the revenue and income of local growers and local businesses, the effects on job creation, and the effects on other sectors of state and local economies. Some obstacles that may reduce impact or create negative economic effects include over-saturation, socioeconomic barriers, the opportunity cost of farmers' markets, and the projected unsustainable growth of farmers' markets in the United States.

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Episode 23: The Rise of the Industrial Economy Hi I’m John Green this is Crash Course U.S. History and today we’re going to discuss economics and how a generation of- Mr. Green, Mr. Green, is this going to be one of those boring ones no wars or generals who had cool last words or anything? Alright, Me From The Past, I will give you a smidge of Great Man history. But only a smidge. So today we’re gonna discuss American industrialization in the decades after the Civil War, during which time the U.S. went from having per capita about a third of Great Britain’s industrial output to becoming the richest and most industrialized nation on earth. Libertage Meh, you might want to hold off on that Libertage, Stan because this happened mostly thanks to the Not Particularly Awesome Civil War, which improved the finance system by forcing the introduction of a national currency and spurred industrialization by giving massive contracts to arms and clothing manufacturers. The Civil War also boosted the telegraph, which improved communication, and gave birth to the transcontinental railway via the Pacific Railway Act of 1862, all of which increased efficiency and productivity. So thanks, Civil War! Intro If you want to explain America’s economic growth in a nutshell chalk it up to G, D, and L: Gerard, Depardieu, and Lohan. No, Geography, Demography and Law. However, while we’re on the topic, when will Gerard, Depardieu, and Lindsay Lohan have a baby? Stan, can I see it? Yes. Yes. Geographically, the U.S. was a huge country with all the resources necessary for an industrial boom. Like, we had coal, and iron and, later, oil. Initially we had water to power our factories, later replaced by coal. And we had amber waves of grain to feed our growing population which leads to the Demography. America’s population grew from 40 million in 1870 to 76 million in 1900 and 1/3 of that growth was due to immigration. Which is good for economies. Many of these immigrants flooded the burgeoning cities, as America shifted from being an agrarian rural nation to being an industrial, urban one. Like, New York City became the center of commerce and finance and by 1898 it had a population of 3.4 million people. And the industrial heartland was in the Great Lakes region. Chicago became the second largest city by 1900, Cleveland became a leader in oil refining, and Pittsburgh was a center of iron and steel production. And even today, the great city of Pittsburgh still employs 53 Steelers. Last but not least was the Law. The Constitution and its commerce clause made the U.S. a single area of commerce – like a giant customs union. And, as we’ll see in a bit the Supreme Court interpreted the laws in a very business friendly way. Also, the American constitution protects patents, which encourag4B-es invention and innovation, or at least it used to. And despite what Ayn Rand would tell you, the American government played a role in American economic growth by putting up high tariffs, especially on steel, giving massive land grants to railroads and by putting Native Americans on reservations. Also, foreigners played an important role. They invested their capital and involved Americans in their economic scandals like the one that led to a depression in 1893. The U.S. was at the time was seen by Europeans as a developing economy; and investments in America offered much higher returns than those available in Europe. And the changes we’re talking about here were massive. In 1880, for the first time, a majority of the workforce worked in non-farming jobs. By 1890 2/3 of Americans worked for wages, rather than farming or owning their own businesses. And, by 1913 the United States produced 1/3 of the world’s total industrial output. NOW bring out the Libertage, Stan. Libertage Awesome. And even better, we now get to talk about the perennially underrated railroads. Let’s go to the Thought Bubble. Although we tend to forget about them here in the U.S., because our passenger rail system sucks, railroads were one of the keys to America’s 19th century industrial success. Railroads increased commerce and integrated the American market, which allowed national brands to emerge, like Ivory Soap and A&P Grocery Stores. But railroads changed and improved our economy in less obvious ways, too: For instance, they gave us time zones, which were created by the major railroad companies to make shipping and passenger transport more standard. Also because he recognized the importance of telling time, a railroad agent named Richard Warren Sears turned a $50 dollar investment in watches into an enormous mail order empire, and railroads made it possible for him--and his eventual partner Roebuck--to ship watches, and then jewelry, and then pretty much everything, including unconstructed freaking houses throughout the country. Railroads were also the first modern corporations. These companies were large, they had many employees, they spanned the country. And that meant they needed to invent organizational methods, including the middle manager--supervisors to supervise supervisors. And for the first time, the owners of a company were not always day-to-day managers, because railroads were among the first publicly traded corporations. They needed a lot of capital to build tracks and stations, so they sold shares in the company in order to raise that money, which shares could then be bought and sold by the public. And that is how railroads created the first captains of industry, like Cornelius “They Named a University after Me” Vanderbilt and Andrew “Me Too” Carnegie (Mellon) and Leland “I Named a University After My Son” Stanford. The Railroad business was also emblematic of the partnership between the national government and industry. The Transcontinental Railroad, after all, wouldn’t have existed without Congressional legislation, federal land grants, and government sponsored bond issues. Thanks, Thought Bubble. Apparently it’s time for the Mystery Document. The rules here are simple. I guess the author of the Mystery Document and if I’m wrong, which I usually am, I get shocked. Alright. “The belief is common in America that the day is at hand when corporations far greater than the Erie – swaying such power as has never in the world’s history been trusted in the hands of mere private citizens, controlled by single men like Vanderbilt...– will ultimately succeed in directing government itself. Under the American form of society, there is now no authority capable of effective resistance.” Corporations directing government? That’s ridiculous. So grateful for federal ethanol subsidies brought to you by delicious Diet Dr. Pepper. Mmm I can taste all 23 of the chemicals. Anyway, Stan, I’m pretty sure that is noted muckraker Ida Tarbell. No! Henry Adams? HOW ARE THERE STILL ADAMSES IN AMERICAN HISTORY? That makes me worry we’ll never escape the Clintons. Anyway, it should’ve been Ida Tarbell. She has a great name. She was a great opponent of capitalism. Whatever. AH! Indeed industrial capitalists are considered both the greatest heroes and the greatest villains of the era, which is why they are known both as “captains of industry” and as “robber barons,” depending on whether we are mad at them. While they often came from humble origins, took risks and became very wealthy, their methods were frequently unscrupulous. I mean, they often drove competitors out of business, and generally cared very little for their workers. The first of the great robber barons and/or captains of industry was the aforementioned Cornelius Vanderbilt who rose from humble beginnings in Staten Island to make a fortune in transportation, through ferries and shipping, and then eventually through railroads, although he once referred to trains as “them things that go on land.” But the poster boy of the era was John D. Rockefeller who started out as a clerk for a Cleveland merchant and eventually became the richest man in the world. Ever. Yes, including Bill Gates. The key to Rockefeller’s success was ruthlessly buying up so many rivals that by the late 1880s Standard Oil controlled 90% of the U.S. oil industry. Which lack of competition drove the price of gasoline up to like 12 cents a gallon, so if you had one of the 20 cars in the world then, you were mad. The period also saw innovation in terms of the way industries were organized. Many of the robber barons formed pools and trusts to control prices and limit the negative effects of competition. The problem with competition is that over time it reduces both prices and profit margins, which makes it difficult to become super rich. Vertical integration was another innovation – firms bought up all aspects of the production process – from raw materials to production to transport and distribution. Like, Philip Armour’s meat company bought its own rail cars to ship meat, for instance. It also bought things like conveyor belts and when he found out that animal parts could be used to make glue, he got into the glue-making business. It was Armour who once proclaimed to use “everything but the squeal.” Horizontal integration was when big firms bought up small ones. The best example of this was Rockefeller’s Standard Oil, which eventually became so big incidentally that the Supreme Court forced Standard Oil to be broken up into more than a dozen smaller oil companies. Which, by the way, overtime have slowly reunited to become the company known as Exxon-Mobil, so that worked out. U.S. Steel was put together by the era’s giant of finance, J.P. Morgan, who at his death left a fortune of only $68 million – not counting the art that became the backbone of the Metropolitan Museum of Art – leading Andrew Carnegie to remark in surprise, “And to think he was not a rich man.”[1] Speaking of people who weren’t rich, let us now praise the unsung heroes of industrialization: workers. Well, I guess you can’t really call them unsung because Woody Guthrie. Oh! Your guitar! And my computer! I never made that connection before. Anyway, then as now, the benefits of economic growth were shared...mmm shall we say...a smidge unevenly. Prices did drop due to industrial competition, which raised the standard of living for the average American worker. In fact, it was among the highest in the world. But due to a growing population, particularly of immigrant workers, there was job insecurity. And also booms and busts meant depressions in the 1870s and 1890s, which hit the working poor the hardest. Also, laborers commonly worked 60 hours per week with no pensions or injury compensation, and the U.S. had the highest rate of industrial injuries in the world: an average of over 35,000 people per year died on the job. These conditions and the uncertainty of labor markets led to unions, which were mostly local but occasionally national. The first national union was the Knights of Labor, headed by Terence V. Powderly which grew from 9 members in 1870 to 728,000 by 1884. The Knights of Labor admitted unskilled workers, black workers, and women, but it was irreparably damaged by the Haymarket riot in 1886. During a strike against McCormick Harvesting Company, a policeman killed one of the strikers and in response there was a rally in Chicago’s Haymarket Square at which a bomb killed seven police officers. Then, firing upon the crowd, the police killed four people. Seven anarchists were eventually convicted of the bombing, and although Powderly denounced anarchism, the public still associated the Knights of Labor with violence. And by 1902, its membership had shrunk considerably--to 0. The banner of organized labor however was picked up by the American Federation of Labor under Samuel L. Gompers. Do all of these guys have great last names? They were more moderate than the anarchists and the socialist International Workers of the World, and focused on bread and butter issues like pay, hours, and safety. Founded in 1886, the same year as the Haymarket Riot, the AFL had about 250,000 members by 1892, almost 10% of whom were iron and steel workers. And now we have to pause to briefly mention one of the most pernicious innovations of the era: Social Darwinism: a perversion of Darwin’s theory that would have made him throw up. Although to be fair, almost everything made him throw up. Social Darwinists argued that the theory of survival of the fittest should be applied to people and also that corporations were people. Ergo, big companies were big because they were fitter and we had nothing to fear from monopolies. This pseudoscience was used to argue that government shouldn’t regulate business or pass laws to help poor people. It assured the rich that the poor were poor because of some inherent evolutionary flaw, thus enabling tycoons to sleep at night. You know, on a big pile of money, surrounded by beautiful women. But, despite the apparent inborn unfitness of workers, unions continued to grow and fight for better conditions, sometimes violently. There was violence at the Homestead Steel Strike of 1892 and the Pullman Rail strike of 1894 when strikers were killed and a great deal of property was destroyed. To quote the historian Michael Lind: “In the late 1870s and early 1880s, the United States had five times as many unionized workers as Germany, at a time when the two nations had similar populations.”[2] Unions wanted the United States and its citizens to imagine freedom more broadly, arguing that without a more equal economic system, America was becoming less, not more, free, even as it became more prosperous. If you’re thinking that this free-wheeling age of fast growth, uneven gains in prosperity, and corporate heroes/villains resembles the early 21st century, you aren’t alone. And it’s worth remembering that it was only 150 years ago that modern corporations began to form and that American industry became the leading driver in the global economy. That’s a blink of an eye in world history terms, and the ideas and technologies of post Civil War America gave us the ideas that still define how we--all of us, not just Americans--think about opposites like success and failure, or wealth and poverty. It’s also when we people began to discuss the ways in which inequality could be the opposite of freedom. Thanks for watching. I’ll see you next week. Crash Course is produced and directed by Stan Muller. Our script supervisor is Meredith Danko. The associate producer is Danica Johnson. The show is written by my high school history teacher, Raoul Meyer, Rosianna Halse Rojas, and myself. And our graphics team is Thought Café. Each week there’s a new caption for the Libertage. You can suggest captions in comments where you can also ask questions about today’s video that will be answered by our team of historians. Thanks for watching Crash Course. Make sure you’re subscribed. And as we say in my hometown, don’t forget to be awesome. Industrial Economy - ________________ [1] Brands, American Colossus p 6. [2] Lind, Land of Promise 171

Methodology

Researchers use different methods to calculate the economic impact of farmers' markets on economies in the United States. The reason to include methodologies in this article is to demonstrate how impact is measured differently, which influences the findings and conclusions of the studies. The most common methods used are the IMPLAN Input-Output Model and the Sticky Economic Evaluation Device, which are mostly used to calculate the impact of farmers' markets on state, municipal, and local economies.^{[citation needed]}

IMPLAN input-output model

The IMPLAN input-output model is a quantitative economic software, technique, or data that facilitates analysis of spending.^[1] This analytic tool, created by the U.S. Forest Service and the University of Minnesota, uses the Bureau of Economic Analysis (BEA) input-output criterion combined with other data to compile tables that identify cash flows between different sectors of the economy. IMPLAN methodology has been used in studies on Portland and Iowan farmers' markets to calculate the economic impact by studying consumption-based transactions. It is also used to compute data supporting studies on the impact of farmers' markets on vendor revenue.^[1]

Sticky Economic Evaluation Device (SEED)

Market Umbrella is a nonprofit organization that developed the Sticky Economic Evaluation Device (SEED), a tool that measures the economic impact of a public market on neighboring businesses. SEED multiplies the annual revenue generated by consumers of the market and abutting businesses by the multiplier. Specifically, the Regional Input-Output Modeling System II multiplier is used, which is generated by the BEA (BEA). The RIMS II multiplier measures how many dollars remain in the regional or local economy. "The greater the interaction each dollar has with the local economy, the larger the multiplier." This methodology also gathers information through customer-intercept surveys and head count tabulation in order to calculate the economic impact the market has on its region. Market Umbrella provides markets with access to their survey templates and facilitates report generating through the use of online accounts on their website. The sales tax revenue generated by market consumers, including purchases at neighboring businesses, is additionally captured. The SEED methodology, developed with farmers' markets in mind, has been used to measure the economic impact of Crescent City Farmers' Markets.^[2]

Economic impact on the U.S. economy and its regions

There are few studies that focus on the impact of farmers' markets on the United States economy and on regional economies in the U.S. The USDA has the most research surrounding regional variation and overall composition of farmers' markets.^{[citation needed]}

Impact on U.S. economy

In 2012, the output generated by United States farms contributed $166.9 billion to gross domestic product, which was 1 percent of GDP. This figure includes all farms participating in economic activity, which suggests that the total contribution of farmers' markets to the U.S. economy in terms of output is very small.^[3]

Nevertheless, the number of farmers' markets in the United States is growing rapidly, with growth increasing by 8.6 percent per year on average. About 30 percent of these new markets are less than five years old and most of them report sales that are half the national average. These new markets have on average 22 vendors compared to the national average of 31, and 430 customers per week compared to the national average of 959. This explains why the growth in sales from $888 million in 2000 to $1 billion in 2005 was only 2.5 percent in spite of the rapid growth in the number of farmers' markets. The revenue generated from farmers' markets was $31,923 per month according to a 2005 USDA study.^[4]

Regional variation

The regions that have the most lucrative farmers' markets are the Far West and the mid-Atlantic region. Managers of farmers' markets reported in a 2005 study that about 15 percent of the vendors at their market earned between $25,000 and $100,000 annually. This range was the largest reported level of income across the regions. The North Central and Rocky Mountain regions in contrast experienced the lowest level of sales with revenue between $1,000 and $5,000. This may be due in part to the seasonal variability of different regions. The markets in the Rocky Mountain region were open on average only 3.92 months, while markets in the Far West were open for 4.9 months on average. The Far West also experienced the greatest level of sales with $476,733 per market per year, while the Rocky Mountain region experienced the lowest level of sales with $90,169 per market per year.^[4]

Economic impact on states and cities

Many studies assess the impact of farmers' markets in the United States on state economies and municipal economies. Most of these studies find that farmers' markets benefit state and local economies because they have direct and indirect effects on personal income, job creation, and on output generated in other sectors of the economy including manufacturing and transportation.^{[citation needed]}

Iowa

The Iowa Department of Agriculture and Land Stewardship conducted a study in 2009 to measure the economic impact of farmers' markets in Iowa using the IMPLAN Input-Output (I-O) model. Iowa is fourth in the nation in terms of its number of farmers' markets and ranks second in terms of the number of farmers' markets per capita.

The report shows that sales among Iowa farmers' markets increased by 92 percent since 2004, reaching $38.4 million in sales in 2009. The tables entitled "Market sales per city, 2004" and "Market sales per city, 2009" show the overall increase in sales among different areas of Iowa between 2004 and 2009.

Market sales per city, 2004^[5]
City	Est. Sales ($1,000's)	Population	Per Capita Sales ($)
Cedar Rapids	$480	120,758	$3.97
Davenport	$3,300	129,634	$25.46
Des Moines area	$9,500	274,157	$34.65
Sioux City	$340	85,013	$4.00
Waterloo	$760	68,747	$11.06
Total	$14,380	678,309	$21.20

Market sales per city, 2009^[5]
City	Est. Sales ($1,000's)	Population, 2008	Per Capita Sales ($)
Cedar Rapids	$4,788	128,056	$37.39
Davenport	$2,394	133,411	$17.94
Des Moines area	$19,178	290,847	$65.94
Sioux City	$574	82,807	$6.93
Waterloo	$736	104,721	$7.03
Total	$27,670	739,842	$37.40

Using the IMPLAN I-O model, the $38.4 million in farmers' market sales translated into "$59.4 million of gross sales among sectors in the Iowa economy." Additionally, the I-O model found that $12.2 million was linked to "personal income effects directly or indirectly related to farmers' market activity." The study also concluded that 374 jobs were directly linked to farmers' market activity, while 200 jobs were "indirectly attributed to the activity."^[5]

The 2009 report also focused on how farmers' markets affect other sectors of the Iowan economy. The two sectors of the economy most impacted by farmers' market activity were agriculture and mining and wholesale and retail trade. The direct impact on agriculture and mining was about $24,960,000, with another $1 million in "business-related indirect impact" and "consumer-related induced impact." Construction, manufacturing, transportation, finance, professional services, and personal services were not directly impacted, but between $1 million and $4 million generated in each sector reflected indirect and induced impacts of farmers' market activity. The table entitled "Output impact of Iowa farmers' market activities" shows these impacts.^[5]

Output impact of Iowa farmers' market activities, 2009^[5]
Sectors	Direct Impact	Business Related Indirect Impact	Consumer-Related Induced Impact	Total Impact
Agriculture & Mining	$24,960,000	$915,629	$123,876	$25,999,504
Construction	0	$1,060,974	$111,077	$1,172,052
Manufacturing	0	$2,374,500	$862,535	$3,237,035
Wholesale & Retail Trade	$13,440,000	$1,080,607	$1,819,466	$16,340,074
Transportation & Utilities	0	$1,702,314	$708,567	$2,410,881
Finance, Insurance & Real Estate	0	$2,164,023	$2,450,352	$4,614,374
Professional Services	0	$1,173,101	$1,856,549	$3,029,650
Personal Services	0	$966,701	$1,610,661	$2,577,362
Total	$38,400,000	$11,437,850	$9,543,083	$59,380,932

Portland, Oregon

The City of Portland's Office of Sustainable Development (OSD) commissioned a report in 2008 to study the impact of Portland's 14 farmers' markets on "the regional Portland metro-area economy." The 14 farmers' markets studied in Portland had sales of approximately $11.2 million in the aggregate in 2007.

The study found that the direct impact of "spending at farmers' markets" stays within the region, while sales at the traditional grocery store "leak outside the region." Therefore, the estimated direct impact of $11.2 million in farmers' market spending is equivalent to only $3.4 million "in economic impact in a traditional grocery market" due to importation of goods and household marginal decision-making in the retail sector.

Using the IMPLAN Input-Output Model, the study also measured the economic impact of product sales, prepared food sales, and management fees, or "the payment of market management fees by vendors," on output, employment, and employee compensation in the Portland economy.

The study concluded that the 14 markets in Portland produced approximately $17 million in output, 150 jobs, and $3.2 million in employee compensation. The table entitled "Total est. economic impact of 14 Portland-area farmers' markets, 2007" shows how product sales, prepared food sales, and management fees impacted the Portland economy in 2007.^[6]

Total est. economic impact of 14 Portland-area farmers' markets, 2007^[6]
Output
	Direct	Indirect	Induced	Total Impact
Product Sales	$10,757,603	$2,994,949	$1,886,048	$15,638,600
Prepared Food Sales	$438,030	$131,996	$96,273	$666,299
Management Fees	$515,436	$191,682	$126,454	$833,572
Total	$11,711,069	$3,318,627	$2,108,775	$17,138,471
Employee Compensation
Product Sales	$1,333,566	$841,790	$556,560	$2,731,916
Prepared Food Sales	$133,047	$33,677	$28,412	$195,136
Management Fees	$145,579	$57,088	$37,31	$239,986
Total	$1,612,192	$932,555	$622,290	$3,167,038
Total Value Added
Product Sales	$4,880,840	$1,628,146	$1,137,365	$7,646,351
Prepared Food Sales	$195,199	$68,432	$58,054	$321,685
Management Fees	$282,692	$107,665	$76,255	$466,612
Total	$5,358,732	$1,804,242	$1,271,675	$8,434,648

Crescent City Farmers' Market, New Orleans, Louisiana

Using the SEED methodology, marketumbrella.org analyzed the economic impact of Crescent City Farmers' Market-Mid City, Crescent City Farmers' Market-CBD, and Crescent City Farmers' Market-Upt, in New Orleans, Louisiana on vendors, the "host neighborhood," and the "surrounding region."^[7]

The combined economic impact included vendor revenue, the revenue of nearby businesses, and sales tax revenue. The combined impact of the Crescent City Farmers' markets was $6,655,614.52 on vendor revenue, $5,008,742.34 on neighborhood business revenue, and $236,014.04 on municipal and state tax revenue.^[7]

Crescent City Farmers Mkt-Mid City was reported to have a market impact of $984,555.13 on vendors and a neighboring business impact of $936,714.04 for a combined annual economic impact of $1,921,269.17. During the 51 days of operation throughout the year, the market generated municipal and state sales tax revenue of $44,138.36.^[7]

In its 51 days of operation, Crescent City Farmers Mkt-CBD generated $3,150,982.42 for vendors and $2,657,647.23 for neighboring businesses with a combined annual economic impact of $5,808,629.66. The revenue for municipal and state sales taxes was projected at $125,229.45 annually.^[7]

Lastly, Crescent City Farmers Mkt-Upt generated $2,520,076.97 for vendors and $1,414,381.06 for neighboring businesses, for a combined economic impact of $3,934,458.03. Municipal and State sales tax revenue was projected at $66,646.23.^[7]

Economic impacts on U.S. vendors, businesses, and consumers

Farmers' markets directly impact vendors, businesses, and consumers. Farmers' markets influence these individuals through vendor revenue and sales, the income multiplier effect, local business incubation, employment, and consumer preferences. Many studies concentrate on the impact of farmers' markets on vendors, businesses, and consumers because farmers' markets are a local phenomenon whose effects are most observable at the community or individual level. This section differs from the previous section that highlighted some state and municipal studies because it provides a summary of the general impacts almost all state and municipal studies measure.^{[citation needed]}

Impact on total vendor sales

Farmers' markets generate significant economic benefits to farmers' market vendors. A study shows that vendors who participated in nine markets throughout urban centers like Baltimore and Los Angeles collectively earn $52,000 to $40,594,000 per year from sales. Kamm's Corners Farmers Market, the median market studied, generated $1.8 million per year for vendors.^[8] Vendors value the net profits derived from the market, as almost half of the vendors surveyed in a study on Iowa's farmers' markets indicated that they would incur a significant loss if farmers' markets were to close down.^[9]

Impact on vendor revenue

Vendors generally make more money by selling their products to the local community than by selling them to a wholesaler for use in the conventional food system. One study found that vendors and food producers were able to retain almost, if not all, of the revenue from the sale of their product on the local market. Vendors may receive up to "seven times greater net revenue on a per unit basis" in the local market than in the conventional market. It is also easier for vendors at farmers' markets to gauge consumer demand and price their products accordingly because they are able to interact directly with the population that they serve.^[10]

Impact on vendor incentives

Vendors who participate in farmers' markets usually have another, often primary form of employment. So, selling their goods at the market is usually a residual use of their time. One study suggests that participating in farmers' markets may reduce the incentives of small farm growers to expand their farms and become more efficient because they must dedicate significant time to marketing activities. This suggests that vendor profits may not increase by as much as they could due to the time dedicated to marketing.^[11]

Income multiplier effect

Beyond the direct effects on vendors, farmers' markets also produce indirect effects. Farmers use the sales that they garner from the market to purchase fertilizer, seeds, and other inputs of production from businesses. This type of transaction has income multiplier effects, meaning that farmers' markets not only impact vendor income, but also impact the incomes of businesses linked to the production of commodities sold at the markets. A study focusing on Iowa farmers' markets showed that $12.2 million worth of business income was due to farmers' market-related transactions among vendors. Another study found that almost all of the "wage and business proprietor income in local food supply chains is retained locally."^[12]

Local business incubation

Farmers' markets can support local businesses. A 2002 study found that sixty percent of consumers at farmers' markets also visited stores surrounding the market on the same day. Sixty percent of those consumers also indicated they only visited stores surrounding the farmers' market on days that they visited the market. Another study supports these findings and showed that an "overwhelming majority" of customers at farmers' markets also visited at least one nearby store.^[13] Additionally, the farmers' market itself provides a space for local and small farm growers to innovate and respond directly to consumer demand. Sweet Briar Farms in Eugene, Oregon began selling pork cuts at the Eugene and Portland farmers' markets in 2000. In the last ten years, the company has expanded to producing bacon and sausage as well as spices, sauces, and rubs. The company now has 25 workers and is one of the biggest pork providers in the Willamette Valley of Oregon. The company credits much of its success to the ability to sell new, experimental products at farmers' markets.^[14]

Job creation

A study of Iowa's farmers' markets showed that 140 jobs were created in a single year that could be attributed to farmers' market activity.^[14] Other studies also found that farmers' market activity directly and indirectly supports the growth of local jobs.^[15] One study showed that 5.4 jobs were created per farmers' market. This figure was used to suggest that public funding of 100 to 500 'otherwise-unsuccessful' farmers' markets per year could generate 13,500 jobs in five years.^[16]

Impact on consumers

Farmers' markets address local consumer demand and preferences. The number of farmers' markets in the United States has grown from 340 in 1970 to 7,000 in 2011. There are also over 4,000 CSAs in the United States, which shows that consumers want to buy local food. Consumers that go to farmers' markets generally seek to support local farms and businesses and also seek to buy food that is healthy and sustainably produced. Recent national data show that eighty-two percent of consumers go to farmers' markets to get fresh produce, seventy-five percent go to support the local economy, and fifty-eight percent patron these markets because they want to know the source of the products they buy. Farmers' markets serve a demand not satisfied by the mass-produced and consolidated methods of production of the United States food system. Consumers also benefit from increased information, because they can learn about where the food they buy comes from by speaking with farmers at the market.^[16]

Economic impact obstacles

Although the number of farmers' markets has grown substantially in the United States over the last decade, there are some factors that may hinder the overall impact of farmers' markets or create negative effects. Overcoming some of these obstacles will ensure the profitability of farmers' markets while producing positive spillover effects on neighboring markets.^{[citation needed]}

Over-saturation

A negative effect on sales of Iowa farmers' markets was linked to the creation of new farmers' markets, specifically with regard to location and timing. Agriculture Statistician Theresa Varner and Professor of Economics Daniel Otto stated that competition was a factor affecting sales of farmers' markets in Iowa. They identified a conflict based on the days that markets operated and suggested that already existing farmers' markets should be improved and expanded.^[17]

Barriers

The Appalachian Sustainable Agriculture Project (ASAP) analyzed the various barriers low-income individuals face with regard to farmers' markets. The study collected data that highlighted convenience, product pricing, language and cultural barriers, federal nutrition benefits, and lack of information and awareness as some of the obstacles to participating in farmers' markets. Low-income families and individuals asserted that convenience is a significant incentive in regard to their shopping preferences. Such convenience is provided by 24-hour access, one-stop shopping, consistent product availability, or proximity of markets to public transportation, home, or other regularly accessed places. This convenience is not equally replicated by seasonally driven farmers' markets. Although recent studies have shown farmers' markets to offer competitive prices, some low-income shoppers still identify high prices as a barrier. Additionally, low-income consumers prefer the grocery store price structure and price displays. Promotions resulted in a significant factor for almost half of Oregon food stamp customers surveyed. Participation in farmers' markets was hindered by language barriers. Low-income customers in several studies who did not speak English said participating in these markets was troublesome. The inability or the perception of the inability to process Electronic Benefit Transfer (EBT) cards by some farmers' markets are major barriers for customers that depend on Supplemental Nutrition Assistance Program (SNAP) benefits.^[18] Lastly a lack of experience and knowledge with fresh food among low-income communities conflicts with market participation.^[19]

Opportunity cost

Research entitled Evaluating the Economic Impact of Farmers' Markets Using an Opportunity Cost Framework was conducted on farmers' markets in West Virginia. Researchers intended to illustrate that opportunity cost reduced net positive impact, however, not disproportionately. They distributed the impact of opportunity cost in the West Virginian economy by major industries. These industries were: agriculture-resources, Mining-utilities-construction, manufacturing, trade-transportation, financial activities, professional-technical services, educational-health-social services, entertainment-travel-other services, and government. The sectors that presented a more significant impact were agriculture-resources and trade-transportation. Education-health-social services were affected by secondary impacts. Total job impacts were felt in the trade-transportation and agriculture-resources sectors. So while the data affirms that farmers' markets have a positive effect on the local economy of West Virginia the opportunity costs reduces its positive impact significantly.^[20]

Gross and net impacts of West Virginia farmers' markets^[21]
Measure of Economic Activity	Farmers' Market	Opportunity Cost	Level	% Decline
Industry output (millions $)	2.391	1.316	1.075	55.0
Gross State Product (millions $)	1.480	0.827	0.653	55.9
Labor income (millions $)	0.656	0.463	0.193	70.6
Employment (full-time equivalent)	69.200	26.400	42.800	38.2

Unsustainable growth

While farmers' markets are growing rapidly there is data indicating that a significant number of markets fail in Oregon. The study conducted by Oregon State University analyzed data collected from the Oregon Farmers' Market Association (OFMA) and the Oregon Department of Agriculture (ODA) to identify the various factors that were prevalent in the markets that closed in that state. They identified that markets that failed had a short life span. Their research stated that 50 percent of these failed markets closed after their first season. They noted that older markets could also be prone to failure. Data presented a high manager turnover rate of an average of 30 percent between 1999 and 2005. While analyzing the data, researchers were presented with a set of circumstances dependent on each other. A farmers' market needs resources such as volunteers, and these resources are affected by market administrative revenue. In small markets, there are fewer vendors, which attracts a smaller percentage of customers. Administrative revenue could aid in acquiring more resources, yet small markets cannot supply a significant number of resources. Larger markets are typically better off. Researchers then concluded that market size, administrative revenue, manager turnover, and resource needs were key factors in projecting market failure.^[22]

References

^ ^a ^b "IMPLAN". IMPLAN.com. Retrieved 25 August 2018.
^ "What is SEED?".
^ "Agriculture and Food Sectors and the Economy". USDA. USDA Economic Research Service. Archived from the original on 17 September 2013. Retrieved 19 December 2014.
^ ^a ^b "National Farmers Market Manager Survey". USDA. Retrieved 19 December 2014.
^ ^a ^b ^c ^d ^e Otto, D. "Consumers, Vendors, and the Economic Importance of Iowa Farmers Markets: An Economic Impact Survey Analysis" (PDF). Iowa Department of Agriculture and Land Stewardship. Retrieved 19 December 2014.
^ ^a ^b Yosick, Bonnie Gee. "Economic Impact of Portland's Farmers Markets". The City of Portland Oregon. Bonnie Gee Yosick LLC. Retrieved 19 December 2014.
^ ^a ^b ^c ^d ^e "Sticky Economic Evaluation Device: Measuring the Financial Impact of a Public Market" (PDF). Marketumbrella.org. Retrieved 19 December 2014.
^ "Farmers Markets Contribute Millions to Local, Regional Economies". Market Umbrella. Market Umbrella. Retrieved 19 December 2014.
^ Otto, D.; Varner, T. "Vendors and the Economic Importance of Iowa's Farmers' Markets: An Economic Impact Survey Analysis". {{cite web}}: Missing or empty |url= (help)
^ O'Hara, J.K. "Market Forces: Creating Jobs through Public Investment in Local and Regional Food Systems". Retrieved 19 December 2014.
^ Martinez, S. "Local Food Systems: Concepts, Impacts, and Issues" (PDF). USDA. Archived from the original (PDF) on 21 October 2014. Retrieved 19 December 2014.
^ King, R.P. "Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains" (PDF). USDA. Archived from the original (PDF) on 21 June 2015. Retrieved 19 December 2014.
^ "Measuring the Impact of Public Markets and Farmers Markets on Local Economies". Project for Public Spaces. Retrieved 19 December 2014.
^ ^a ^b Bragg, E. "Farmers Markets as Small Business Incubators". Retrieved 19 December 2014.
^ King, R.P. "Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply CHains" (PDF). USDA. Archived from the original (PDF) on 21 June 2015. Retrieved 19 December 2014.
^ ^a ^b Hennenberry, S.R.; Whitacre, B.; Agustini, H.N. (2009). "An Evaluation of the Economic Impacts of Oklahoma Farmers Markets". Journal of Food Distribution Research. 40 (3): 64–78.
^ Varner, Theresa; Otto, Danie (2008). "Factors Affecting Sales at Farmers' Markets: An Iowa Study". Applied Economic Perspectives and Policy. 30 (1): 176–189. doi:10.1111/j.1467-9353.2007.00398.x.
^ Freedman, Darcy A.; Vaudrin, Nicole; Schneider, Christine; Trapl, Erika; Ohri-Vachaspati, Punam; Taggart, Morgan; Ariel Cascio, M.; Walsh, Colleen; Flocke, Susan (2016-03-25). "Systematic Review of Factors Influencing Farmers' Market Use Overall and among Low-Income Populations". Journal of the Academy of Nutrition and Dietetics. 116 (7): 1136–55. doi:10.1016/j.jand.2016.02.010. ISSN 2212-2672. PMID 27021526.
^ Local Food Research Center (October 2012). "Farmers' Markets for All: Exploring Barriers and Opportunities for Increasing Fresh Food Access by Connecting Low-Income Communities with Farmers' Markets" (PDF). Appalachian Sustainable Agriculture Program.
^ Hughes, David; Brown, Cheryl; Miller, Stacy; McConnell, Tom (April 2008). "Evaluating the Economic Impact of Farmers' Markets Using an Opportunity Cost Framework" (PDF). Journal of Agricultural and Applied Economics. 40: 253–256. doi:10.1017/S1074070800028091. S2CID 41265896. Retrieved 1 December 2014.
^ Hughes, David; Brown, Cheryl; Miller, Stacy; McConnell, Tom (April 2008). "Evaluating the Economic Impact of Farmers' Markets Using an Opportunity Cost Framework" (PDF). Journal of Agricultural and Applied Economics. 40: 253–256. doi:10.1017/S1074070800028091. S2CID 41265896. Retrieved 1 December 2014.
^ Stephenson, Garry; Lev, Larry; Brewer, Linda (December 2006). "When Things Don't Work: Some Insights into Why Farmers' Markets Close" (PDF). Oregon State University Extension Service.

External links

This page was last edited on 27 May 2023, at 23:11