Agricultural Marketing Service
March 2016
The Economics of Local Food Systems
A Toolkit to Guide Community Discussions, Assessments and Choices
PB 1 Authors and Acknowledgements
Authors Dawn Thilmany McFadden (coordinator, Colorado State University), David Conner (University of Vermont), Steven Deller (University of Wisconsin-Madison), David Hughes (University of Tennessee), Ken Meter (Crossroads Resource Center), Alfonso Morales (University of Wisconsin-Madison), Todd Schmit (Cornell University), David Swenson (Iowa State University), Allie Bauman (Colorado State University), Megan Phillips Goldenberg (Crossroads Resource Center), Rebecca Hill (Colorado State University), Becca B.R. Jablonski (Colorado State University) and Debra Tropp (U.S. Department of Agriculture, Agricultural Marketing Service)
The authors would like to thank three reviewers, Jeff O’Hara (Union of Concerned Scientists), Rich Pirog (Michigan State University Center for Regional Food Systems), and Katherine Ralstron (U.S. Department of Agriculture, Economic Research Service) for their review and comments. Additionally, special thanks to Samantha Schaffstall and Arthur Neal of the U.S. Department of Agriculture’s Agricultural Marketing Service for support throughout the entire project.
Preferred citation: Dawn Thilmany McFadden, David Conner, Steven Deller, David Hughes, Ken Meter, Alfonso Morales, Todd Schmit, David Swenson, Allie Bauman, Megan Phillips Goldenberg, Rebecca Hill, Becca B.R. Jablonski, and Debra Tropp. The Economics of Local Food Systems: A Toolkit to Guide Community Discussions, Assessments, and Choices. U.S. Department of Agriculture, Agricultural Marketing Service, March 2016. Web.
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ii iii Contents
Authors and Acknowledgements ii
Introduction: The Economics of Local Food Systems, a Toolkit to Guide Community Discussions, Assessments, and Choices 1 Roadmap to the Toolkit 1 Purpose of the Toolkit 3 Evolution of Food System Policy Drivers and Issues 5 Structuring the Assessment Process to Enhance Success 7
Module 1- Framing Your Community Economic Assessment Process: Defining the Parameters of Your Local Food System 7 Case Study: Northern Colorado Food System Assessment 9 Figure 1.1: Boulder County, CO, Project Advisory Team Figure 1.2: CO Food System Assessment Steering Committee Representatives 9 Identifying the Study Parameters and Priority Issues 10 Study Scope 11 Timeframe 11 Resources 11 Goals of Your Community Food Systems Assessment 11 Using Visual Schematics to Engage Community Members 13 Case Study: The Vermont Farm to Plate Network5 14 Figure 1.3: Organizational Structure of the VTF Farm to Plate Network6 14 Figure 1.4: Community Food System Framework by Activity, Environment and Macro-Forces8 16 Figure 1.5. Assessment Analytical Framework9 17 Figure 1.6: Values Structure in Minnesota’s Food Industry 18 Figure 1.7: Michael Porter’s Value Chain Concept with a Food Systems Focus 19 Takeaways 20
Module 2 — Using Secondary Data Sources 21 Existing Datasets Offer a Wealth of Information 21 Case Study: Understanding the Difference Between Primary and Secondary Data 22 Starting Your Work with Secondary Data Sources 22 Data Sources 23 Data Sources on Food Handling, Processing, Marketing, and Distribution 26 Food Consumption 31
ii iii Waste Recycling 33 Demographic and Economic Contexts 34 Case Study: Maryland Food System Map 35 Figure 2.1: Maryland Food System Map 35 Cautions on Using Secondary Data 36 Takeaways 37 Appendix 1 — Specialized Secondary Datasets 38 Appendix 2 — Examples of Using Secondary Datasets 41
Module 3: Generating and Using Primary Data 43 Before You Start 43 Identifying Key Indicators for Your Community 44 Variables and Attributes/Characteristics 44 Data Collection 47 Case Study: Four Main Types of Survey Variables 48 Table 3.1: Example Likert Scale 48 Figure 3.1: Questions from the Pueblo County Food Assessment Youth Focus Groups 49 Considering Options for Administering Surveys 51 Figure 3.2: Dot Poster Surveys 51 Figure 3.3: Dot Poster Survey Example 51 Data Analysis 53 Figure 3.4: Example Mindmap 53 Case Study: Making Small Farms into Big Business 54 Takeaways 55
Module 4 - Engaging Your Community Process with Data 57 Developing a Shared Project Team Mission Centered on Key Data Findings 57 Data Analysis and Interpretation: Letting the Data Speak 59 Case Study: Strengthening Buffalo’s Food System 60 Figure 4.1: Healthy Food Access in Buffalo 60 Some Words of Caution at This Stage of Your Process: 61 Cluster Mapping and Location Quotients 62 U.S. Cluster Mapping Website 62 Figure 4.2 Establishments Growth Rate in Food Cluster by Economic Area, 1998-2012 63 Figure 4.3: Establishments Growth Rate in Local Food and Beverage Cluster by Economic Area, 1998-2012 63
iv v Engaging Public Support Through Unique Community Trends and Indicators 64 Case Study: Northern Colorado Regional Food Systems Assessment 65 Figure 4.4: Percent of Individuals Who Ate 5 or More Servings of Fruits and Vegetables 65 Table 4.1: Comparing Health Metrics from the Northern CO Food System Assessment 65 Presenting your Findings to Community Stakeholders 66 Takeaways 68
Module 5: Analyzing the Linkages and Contribution of Local Foods to Local Economies through Input-Output Analysis 69 Local Foods and Economic Impact Assessment 71 Linkages, Leakages, and Multipliers 72 Figure 5.1: Simple Multiplier Illustration 72 Producing Reliable Local Foods Impact Estimates 73 The Structure of Input-Output Models 73 Case Study: I-O Models 74 Table 5.1: Numerical SAM for a three-sector economy 74 Table 5.2: Expanded SAM 75 Table 5.3: Multiplier matrix for a three-sector economy 75 Basic I-O Modeling Structure 75 Properly Specifying the Study Area 76 Other Considerations: Reasonable Size of Multipliers 77 Figure 5.2: Illustration of Factors that Drive the Size of an Economic Multiplier 77 Case Study: Colorado Farm to School 78 Figure 5.3: Map of Direct Farm Sales in Colorado, 2007 78 Figure 5.4: Scenario Map for Economic Impact Assessment of Farm-to-School Programming in Colorado 79 Other Considerations: Reasonable Scenario Development 80 Understanding Input-Output Analysis Limits 80 Feasibility and Return on Investment 80 Employment Impacts 81 Impacts on Existing Commercial Activity 81 Takeaways 82
iv v Module 6: Addressing Opportunity Costs in the Analysis of Economic Impacts across Local Food Systems 83 Case Study: Supply and Demand Size Constraints – Incorporating Opportunity Cost and Countervailing Effects 84 Figure 6.1: Selected West VA Sectors Experience Job Gains and Losses due to Expanded Farmers Market Sales 85 Figure 6.2: New Job Impacts due to Expanded Farmers Market Sales in West Virginia 85 Figure 6.3: Expected Acres Needed to Satisfy Demand for Local Fruits and Vegetables Within the 6 State Region. 86 Figure 6.4: Expected Sales from Demand for Local Fruits and Vegetables Within the 6 State Region 86 Resource Constraints and Local Food Systems: Supply Side Countervailing Effects 87 Case Study: Local Food Land Requirements 88 Table 6.1: Kane County Fruit and Vegetable Market Potential and Production Factors 89 Table 6.2: Opportunity Costs Per 1,000 acres of Conventional Kane County Crop Land Converted to Fruit and Vegetable Production 89 Figure 6.5: Fruit and Vegetable Production Acres by State, 2012 90 Local Opportunity Cost of Direct Farm Marketing Channels 91 Case Study: What is Margining? 92 Figure 6.6: Breakdown of $1 Spending on Produce, Farmers Market vs Grocery Store 92 Figure 6.7: Farm Share of the Retail Dollar in Conventional Food Marketing Channels Compared to Select Local Food Channels 93 Figure 6.8: Division of $1 Spending on Produce, Farmers Markets vs. Grocery Store 93 Figure 6.9: Difference in the direct impacts from $1 of spending at a farmers market compared to at a grocery store 94 Case Study: Evaluating the Economic Impact of Food Hubs including Opportunity Cost 94 Takeaways 95
Module 7: Advanced IMPLAN Analysis to Understand the Economic Impact of Local Food System Initiatives 97 Case Study: Positive net economic impacts occur when the local economy 98 Why Might We Needto Modify IMPLAN for Local Food System Impact Assessments? 98 Figure 7.1: Sample Vegetable and Melon Farming Sector Production Function 99 Case Study: Assessing the Economic Impacts of Local Food System Producers by Scale 101 Table 7.1: Multipliers for the Default Agriculture, Small Direct Agriculture (SDA), and Non-Small Direct Agriculture (NSDA) Sectors 101 Customizing a “Local Food Farm” Sector 102 Data Needs for Sector Modification 102
vi vii Case Study: Imputing Key Expenditure Items into IMPLAN to Create Alternative Production Functions 103 Customizing IMPLAN 103 Impact Assessment 105 Analysis-By-Parts 105 Figure 7.2. Hypothetical Example of Analysis by Parts for $100,000 of Inputs 107 Conclusion 107 Takeaways 107
Glossary of Terms 109
Photo Credits 117
vi vii viii 1 Introduction: The Economics of Local Food Systems, a Toolkit to Guide Community Discussions, Assessments, and Choices
As consumers across the Nation the USDA, Agricultural Marketing assessment process as well as express a growing interest in a Service (AMS) has managed collecting and analyzing relevant closer connection to their food the Farmers Market Promotion primary and secondary data. producers—whether through Program (now expanded to the For those seeking a more robust access to more localized markets Local Foods Promotion Program), economic impact assessment, and/or shorter supply chains— with great expectations of positive the second set of modules (5-7) cities and regions have begun outcomes, but no standardized provides a more technical set of to regard the expansion of local approach on how to evaluate practices and discussion of how food marketing activities as market and economic outcomes. to use the information collected a critical component of their As a result, a team of regional in stage one to conduct a more economic development strategies. economists and food system rigorous analysis. Rising demand for locally specialists were assembled produced, source-identified, through a project hosted by Module 1, Framing Your and differentiated food products Colorado State University (CSU) Community Economic Assessment has generated a plethora of to develop a Toolkit comprised Process: Defining the Parameters new and spinoff businesses in of food system assessment of Your Local Food System, many communities, which aim principles and economic indicators discusses the key steps that a to increase the range of and a community may expect to share. community should follow when accessibility to local food items Given the real-world projects, initially undertaking a community- for both retail and wholesale experiences, and applied research based economic assessment or customers. In turn, this emergence of the CSU-led team, the Toolkit planning process. In this module, of local food businesses has is grounded in practices that are you will first learn how to organize sparked a groundswell of financial credible and useable within the an effective team and identify support and interest from economic development discussions the parameters of your study and private foundations and public guiding communities. The goal of priority issues. Leading questions agencies on the assumption that this Toolkit is to guide and enhance are provided to guide you through the development of local food the capacity of local organizations the process of building a team and systems contributes to positive to make more deliberate and appropriately scoping your project. economic outcomes, especially credible measurements of local Next, the module will guide your with respect to local economic and regional economic activity and team in identifying the goals of development and improved farm other ancillary benefits. your food system assessment as viability. Unfortunately, given well as a few key questions the the nascent nature of local food study will answer, serving as a demand growth and the scarcity guide for data collection discussed of available data, relatively few of Roadmap to the Toolkit in modules 2 and 3. Lastly, the these efforts have been guided by module provides examples and rigorous assessments. The Toolkit is made up of seven discussion of visual schematics of modules that can be grouped food systems to support a better In response, the United States into two stages of food system understanding of the complex Department of Agriculture (USDA) planning, assessment, and planning and implementation has formed new initiatives and evaluation. The first set of modules process of a community economic programs to develop new markets (1-4) guides the preliminary impact assessment. These and support existing markets stages of an impact assessment schematics are useful for the so that producers and their and includes framing the system, project team during the planning communities may leverage these relevant economic activities and process as well as for members new opportunities. Specifically, viii 1 outside of the team during the answer; variables can be thought team mission centered on key outreach process of the project. of as a set of questions on a survey data findings from modules 2 and The activities outlined in module or interview; and attributes are 3, providing discussion points for 1 are essential for a successful the individual responses to those the leadership team on how to assessment because thoughtful questions. The module then examine initial data and findings discussion and understanding provides guidance on the three and use those findings to revisit of the economic outcomes primary approaches in determining the discussion from module 1. appropriate for and expected the study sample (i.e., the people The module then discusses how by stakeholders will catalyze an or organizations who/that will to prioritize data and the common effective community process. be asked to respond to your methods used to reduce data questions). Lastly, the module into thematic findings of interest Module 2, Using Secondary Data provides a detailed description to general audiences. Lastly, the Sources, provides an overview of of data collection methods and module discusses some methods the key secondary data sources techniques for coding qualitative to present your initial findings (data that someone else has and quantitative data so it is ready to the community, including obtained and compiled into an to use in analysis. suggestions for estimating ordered, meaningful format) that potential economic impacts and have proven useful in performing Module 4, Engaging Your engaging community members local food system assessments as Community Process with Data, before undertaking the full scope well as a guided set of questions provides guidance on how to of an economic impact analysis to help you utilize this data in your reflect on and analyze the data (modules 5 and 7). own assessment. This module gathered, by characterizing trends, is intended to make it easier for changes, and sectors that warrant Module 5, Analyzing the Linkages your assessment team to identify further attention and exploration. and Contribution of Local Foods to and access the available datasets, This module begins by discussing Local Economies Through Input- determine the datasets that are how to develop a shared project Output Analysis, provides the likely to be most useful in your project, and evaluate key strengths and drawbacks of each data set. It is also important to understand what is available already before investing resources into primary data gathering.
Module 3, Generating and Using Primary Data, provides a detailed description of how to gather primary data (data that you collect yourself) in order to conduct your economic impact assessment. Primary data collection may be needed if no secondary data exist to answer your research questions. The module begins by guiding you through the identification and definition of three guiding components of data collection: dimensions, variables, and attributes. Dimensions are the broad questions you want to This diagram llustrates the concept of a local multiplier.
2 3 reader with a brief background increases in local food production there are few who may need on the rationale for and basic likely reflect changes in land use, this information directly, it principles of economic impact the reallocation of existing uses of may guide the use of technical studies. The module begins with agricultural land. The discussion assistance partners who support a discussion of the ways in which then moves to the assumption of teams by providing a roadmap of local food system expansion can no opportunity cost of spending best practices. be thought about in the context – i.e., farmers directly marketing of economic impact studies. their crops to local consumers Next, the modules present the constitutes a positive local important economic impact economic impact, but may also Purpose of the Toolkit concepts of linkages, leakages, result in negative impacts due to and multipliers to give you a lost sales (consumer spending) This Toolkit reflects the intention basic understanding of exactly in other sectors of the economy of the USDA AMS to expand what these indicators can tell us (typically, the wholesale and retail its current role as a technical about our local food system. The sectors). This module provides assistance provider to food module then provides you with a detailed examples of how a system practitioners, economic basic education on input-output modeler can correctly incorporate developers, and community modeling, a type of analysis that these key concepts into his/her stakeholders. We expect this effort tracks the interdependence among input-output analysis. will support more appropriately the producing and consuming targeted financial investments, sectors of an economy, and the Module 7, Advanced IMPLAN as this Toolkit is designed to help most commonly used method to Analysis to Understand the communities’ better measure conduct economic impact studies. Economic Impact of Local Food the expected economic impact Moving into a more technical System Initiatives, provides of planned local food system discussion, including an interactive technical and detailed information activities, and thereby support video guide, the module provides on how to modify input-output better-informed policy and the reader with guidance on models so as to more accurately regulatory decisions on the choosing the appropriate study reflect conditions in your local, State, and Federal level. area and scenarios as well as the community or region. This is Furthermore, the customized related implications for multipliers. the most technical module and nature of these assessment The module ends with a recommended for users with strategies can be expected to discussion of the limitations of expertise in the field of regional help identify and support the input-output analysis. economics and input-output development of specific economic, modeling, or those that have infrastructure, or regulatory Module 6, Addressing Opportunity recruited a partner with such needs that correspond with the Costs in the Analysis of Economic expertise to their team. The focus entrepreneurial ambitions and Impacts Across Local Food Systems, of this chapter is on a specific data social/environmental priorities of focuses on understanding two package and software platform, individual communities related to key assumptions of input-output IMPLAN, as it is the most widely food production, manufacturing, models which are fundamental used when exploring economic and distribution. in properly estimating and impacts. The module begins by interpreting the economic impact discussing why a team might want To set the stage for your of local food sales increases on to modify IMPLAN for its economic community to frame and local (or regional) economies: impact study. The discussion then implement its economic impact (1) the “no resource constraints” moves into a tutorial of how to assessment, this introduction assumption on the supply side; modify IMPLAN, including the motivates the need for the and (2) the “no opportunity cost data you will need. The chapter following set of modules by of spending” assumption on concludes by walking you through presenting many of the reasons the demand side. The module how to approach the team’s that communities decide to first discusses the assumption impact assessment, providing undertake this process. The of no resource constraints – i.e., examples along the way. Although module(s) of value and interest will
2 3 specialists to evaluate the cost effectiveness of capital investments, most municipal/local governments and community planners have only recently begun to view agricultural and food systems as an important engine of economic development and sought to link their economic development and assessment work to local food systems activities.
Beyond providing impact estimates to local policymakers, economic impact assessments allow you to better determine which types Urban Gardens, such as this one in Denver, CO, build an awareness of the importance of locally of food system interventions are grown foods. likely to be most appropriate, cost effective, and result in the vary depending on the stage and from a planning process. We priority outcome(s) that your expertise of the assessment team. provide a brief overview of recent community desires. For example, This Toolkit is meant to be used U.S. economic development by conducting a careful asset in its whole or in parts, but does concepts, and discuss how mapping exercise of pre-existing not necessarily need to be utilized recent work in the area of community assets, members of from start to finish, dependent on food systems intersects with your assessment team may find the background of the assessment conventional analysis. that there are existing assets team. Each module is intended that can be deployed without additional investment. Several to stand alone, but later modules Why Perform an Economic assume knowledge of and findings communities across the country from prior modules. Impact Assessment? provide a compelling example in The most common reason cited for their investment in employees who In the remainder of this assessing the economic impacts support “value chain facilitation” introduction, we present key of local foods work is to offer (i.e., building relationships drivers that, in our team’s policymakers’ specific estimates between farmers, processors, and experience, have typically that will help them consider distributors) rather than building catalyzed food system community whether to invest in initiatives that new food hubs (i.e., local food discussions. These drivers increase local food activity. The aggregation and distribution (some economic, some not) are findings of an economic impact businesses). Your leadership team important to consider since they assessment, for example, might may be able to take advantage may influence the assumptions suggest that investing in a specific of lessons learned from the and perceptions that discussion sector would create a certain asset mapping by encouraging participants bring to the table, number of jobs, or generate related local businesses to build and thus, should be explicitly a certain level of additional new linkages with each other, acknowledged when identifying personal income. While this type forming business clusters that the goals and outcomes expected of method has been used for lend permanence to your work decades by economic development and increase local economic 4 5 multipliers. By measuring existing you to exert greater leverage potential, providing a more business clusters on the front end over local policy decisions. For varied set of agricultural products of your implementation activity, example, if a new grocery store intended for local, domestic, and and measuring how they change sold $200,000 of locally raised export markets. By helping to or take root over time, your local food in its first year, you could maintain key food supply chain foods assessment work can be say that the store generated infrastructure such as processing used to increase local economic $200,000 in sales (local benefits). facilities and distribution hubs, multipliers rather than simply as a However, if your economic impact these food system efforts support measurement tool. assessment determined that the the portfolio of built capital local economic multiplier for this invested in rural communities Economic impact assessments store was 1.3, you could also claim and economies. As one example are also helpful in guiding the that the store yielded $260,000 in of resiliency, if natural disaster or initiation and implementation of economic impacts as these initial other infrequent events disrupt socially or environmentally driven earnings were recycled back into food supply chains, having food goals. Such assessments can help the community. production assets in a more you identify core dynamics in dispersed set of locations may your community’s food system, benefit the public. which in turn can help you identify what can be done to support the Evolution of Food System Despite increasing concentration, development of a food system Policy Drivers and Issues small and mid-sized farms still that aligns more closely to desired represent the vast majority community interests and values. Some of the most common of farms in the United States, For example, community planners reasons for advancing programs and continue to play a key and stakeholders may want to that support local foods are that role in rural America – where use assessment tools to develop local food production: economies are dependent on interventions related to boosting the farm and agribusiness sector farm viability, preserving farmland, • Provides incentives for as key economic drivers. Several or creating additional value-added entrepreneurship and studies have noted consumers’ manufacturing capacity at the innovation; concerns about prices received local/regional level. at the farm-gate (for example, • Expands consumer choice and the USDA, Economic Research Finally, by knowing what economic fresh food access; Service (ERS) food dollar series) conditions were like at the onset of • Improves negotiating power to and have reflected that local food a project or at a particular phase, local producers; systems may support increased you will be better positioned down willingness to pay and drive more the road if you wish to measure • Supports rural economic consumers to buy differentiated, the economic impacts of any revitalization; and source-identified products at a future proposed development. variety of direct-to-consumer (i.e., Measuring the success of your • Protects the food system farmers markets) or intermediated effort will also enable you to against severe shocks (i.e., grocery stores, restaurant) show funders, participating through decentralization of markets.1 Alternative market stakeholders, or other investors production. outlets can also lead to higher how their investments have made value propositions for producers a difference over time, increasing Beyond a beneficial impact on unable to access increasingly your credibility as a source of local farm economies, food consolidated mainstream channels. valuable data and enabling systems efforts are thought of as one area to empower such
1 Onozaka, Y., G. Nurse, and D. Thilmany McFadden. 2011. “Defining Sustainable Food Market Segments: Do Motivations and Values Vary by Shopping Locale?” American Journal of Agricultural Economics. 93:2:583-589. This study found that the definition of local was influenced by the channels where consumers sourced their produce, which in turn, influenced their willingness to pay for locally labeled products. So, local as a label may be closely linked to the marketing channels rapidly emerging alongside conventional retail food systems in the United States. 4 5 The evolution of food system system may yield surprising Projects should always begin practices in recent years towards information about how sustainable with a broad discussion of a more decentralized system has alternative food hub models may the fundamental questions created many new opportunities, be, and encourage communities to and priorities that community both economic and non-economic, consider partnering with existing stakeholders would like to see but thus far, most local food institutions where possible to addressed as a result of the initiatives are in the early stages avoid potential inefficiencies assessment process. Some of development and are not yet (for example, backhaul using of these same questions and fully realized. Accordingly, any current food bank routes, sharing goals will almost certainly discussion of the potential for commercial kitchen space be revisited midway through food system innovations must be with other local food systems the implementation of the realistic about using anecdotal enterprises). This same assessment to ensure that the evidence to support projects or argument may hold for intended desired priorities and goals are programs that are significantly economic benefits. being met. larger in scope than what has already been “piloted” in their Takeaways region or similar areas. Economic development As the purpose of this Toolkit officials, local policymakers, Though there are many purported is to help you and your team and community planners are positive outcomes ascribed to local think about how to evaluate the increasingly interested in and regional food system efforts, economic impacts of local food examining the many benefits more rigorous assessments are systems, or of particular initiatives, offered by local and regional needed to evaluate realistic goals it is useful to introduce how food systems. These benefits and achievements. For example, general principles of economic may result from shifts in many believe the length of food development are used in public economic development supply chains affect other public policymaking. Community-based principles and practices, issues, such as the environmental economic impact assessments are augmented by changes impact from transportation and most commonly conducted in consumer and investor processing of products affecting to inform policymakers and behavior. As stated earlier, climate change. However, there is economic development officials users of this Toolkit need not emerging evidence that a rigorous about the potential benefits of begin with the first module assessment of the distribution local initiatives. and proceed one phase at a time. We suggest users review the whole Toolkit and then move among modules to align with the stage of discussions in their community, or address the specificity of economic measures required for the decisions to be considered. Users will benefit from reviewing different modules throughout planning discussions as new circumstances arise, as new expertise is brought into the assessment process, or as clarification of the shared vision of the community process is needed.
6 7 Module 1- Framing Your Community Economic Assessment Process: Defining the Parameters of Your Local Food System
Module 1 outlines the key steps modules 2 and 3. Although less • Updated policies to address your community should follow rigorous in nature, the activities barriers to food system when initiating a community-based outlined in module 1 are essential innovation such as enterprise economic assessment or planning for a successful assessment zones, redefined zones for process. A key first step, and the because thoughtful discussion and farm-based food marketing, or overarching theme to this stage, understanding of the economic scale-appropriate food safety is identifying the potential short- outcomes appropriate for and guidelines; and and long-term outcomes that expected by stakeholders will may arise from an assessment, result in an effective community • Coordinated planning for no matter how comprehensive an process. community food initiatives assessment your resources allow such as food recovery from you to conduct. In this module, you As indicated in the introductory farms and markets, a virtual will learn how to: section, this Toolkit’s mission food hub, or a community is to enhance the capacity of branding campaign. • Articulate the planning local, regional, and statewide decisions or investments the organizations to scope out relevant assessment will inform; information, identify priorities for Structuring the improvement, and conduct place- • Identify more specific goals or Assessment Process objectives of your study; based measurements of local and regional economic activity. to Enhance Success • Identify the scope and Given our team’s experiences in potential outcomes of leading such community-based The success of your project will your project; economic impact assessments, we be dependent on two key initial believe there are some key steps efforts: organizing an effective • Organize an effective and for initiating that process that will team and identifying the study’s inclusive team for your increase the probability that it will parameters and priority issues. assessment; yield an effective and successful • Determine an appropriate set of measures and promote timeframe; broad community acceptance and Assembling Project engagement. The intention here Team Members • Examine available resources to is to advance the development conduct this assessment and of a useful analysis as a basis for To construct a solid leadership assess if they are adequate to well-informed, community-based team for the study, it is essential meet your goals; and decision-making and strategic that the team incorporate a broad planning. Potential outcomes of a range of skill sets, expertise, and • Utilize visual schematics to well-designed and implemented perspectives. We recommend engage community members. process are wide ranging, and consideration of the following may include: when assembling your team: We’ve provided leading questions to guide you through the • New investments in food • Does your project team process of building a team and system projects such as include team members with appropriately scoping your project. a community garden, expertise in examining local The questions answered in this commercial kitchen, or public food system issues from module will serve as a guide lands repurposed to food a variety of perspectives; for data collection discussed in production; e.g., the importance of geography (rural vs. urban
6 7 food issues), scale (small these technical assistance Primary Reflections on vs. large enterprises), and partners naturally emerge from Constructing a Leadership market orientation (different the ranks of the leadership team. Team and Recruiting Partners segments of the supply However, it may be necessary to chain)? contract or hire such personnel as well, either for facilitation, data • Do the collective abilities of • What are the specific skills gathering, in-depth analysis, or the project leadership allow and experiences of each any combination of the above. you to effectively frame, prospective team member? These partners should be a part of inform, and interpret a food Ideally, a good project team ground-level organizational efforts, system assessment? should include a range of and be available for the majority demographic characteristics • Does the leadership team of meetings to gain the context incorporate a diversity of along age, gender, and necessary to serve the project well. ethnicity/racial lines. Also, opinions and experiences, each team should contain thereby ensuring that these The members of the advisory panel are reflected throughout the a person who is good at generally consist of a group of key process, someone who is planning, data collection, and stakeholders brought together to analysis process? savvy about public relations/ provide feedback on the project’s media, someone with process, implementation, and • Are the members of the legal/planning expertise, findings. How you specifically leadership team/advisory and an analytical/research- decide to use your advisory panel flexible enough and is oriented person, partners may vary (as discussed the planning/implementation • Is there one person who below), but in all cases, it is process iterative enough to can serve as the overall beneficial to arrange for broad allow for interactive learning project coordinator? This community representation within and refocusing as findings are is an essential role as this the membership of the advisory uncovered and shared? person will be charged panel. This will assure that with periodically evaluating the scope of the study and the whether the project is on desired measures and outcomes track to carry out its intended correspond to the community’s mission, is effectively actual priority needs, and that engaging external audiences, project steps and milestones are is adhering to internal appropriately vetted. project timelines, and is properly engaging all team members, including regularly communicating progress and next steps.
Technical assistance partners (those who are not directly involved in the food industry but have expertise, resources, or networks) are also key players in this process. In many cases,
8 9 Case Study: Northern Colorado Food System Assessment In the case of the multi-county Northern Colorado Food System Assessment, the leadership team drew upon the expertise of both individual, county-based advisory groups, and an overarching steering committee (drawn from leaders of the counties’ advisory groups), see figures 1.1 and 1.2. Each county group met with the assessment team monthly to give feedback on different elements of the project; feedback was compiled, and then the leadership team (with representatives from each county) decided on refinements or next steps that considered each advisory group’s interests and concerns. This governing structure allowed for better coordination across the regional effort, and enabled the leadership to get more focused feedback and integration of each county discussion.2
Figure 1.1: Boulder County, CO, Project Advisory Team3
Source: Northern Colorado Food Assessment
Figure 1.2: CO Food System Assessment Steering Committee Representatives4
Source: Northern Colorado Food Assessment
2 For more information, visit: http://www.larimer.org/foodassessment/ 3 Ibid. 4 Ibid. 8 9 Setting the Stage • What food system sectors do Identifying the Study they represent? Parameters and Priority • What is the goal of the study? • What business models are represented and how does Issues ○○ Is it being conducted to generate interest in this matter? The questions posted below are investment in local foods? • What networks of meant to help you understand Target an education, relationships are represented your particular social and research or outreach and how are they related? geographic context and to help program? Change or revisit you refine your goals in light of a key policy? Are you • Who else should be at the resource constraints on the type conducting an integrated table? What sectors are not of analysis that is appropriate evaluation of distinct (or represented? If they are and possible. The reality of your overlapping) activities not responsive to requests/ situation (i.e., financial, human or are you focused on a recruiting, how can their capital) will limit your data access single activity? perspective be considered? and analysis. Answers to these • Who is the primary audience? • Do you have the requisite questions will help you identify expertise in your team or do what you want and how you might you need to hire a facilitator move forward. Before customizing Who is at the Table? and/or analyst? and defining the scope, there are some guiding questions we suggest • Which stakeholders are • Does the racial and cultural that the community discuss at the currently involved? diversity of your assembled beginning of the process. stakeholders reflect the composition of your community?
Expected Outcomes
• How will you measure success?
○○ The keys to creating good measurements are a clear purpose and a clear set of goals. If the leadership team is unified around a common purpose, and trusts each other enough to communicate openly, many of the measurement questions that seem most challenging at first become less difficult. One of the simplest ways to assess the degree of progress that has been achieved through local Northern Colorado Food food initiatives is to identify, Assessment, Spring 2010. define the parameters of, More information on project at: http://www. and measure movement larimer.org/foodassessment/ 10 11 in key system “levers” that ○○ Relevant questions that members of the leadership should be incorporated Goals of Your Community team believe are necessary into your planning and Food Systems Assessment for shifting existing dynamics scheduling process to in the local food system. reflect decisions on your timeframe include: The above questions are part of • Who cares about your results? the general process of identifying ▪▪ Do you need to talk to goals, which of course includes the farmers? When would challenge of assigning boundaries they likely have free time? to what will be part of your work Study Scope and what will not be part of ▪▪ Do you seek a snapshot of your work. Your team will likely • What are the geographic current conditions, or are experience some frustration, boundaries for the study? you trying to identify perhaps even arguments and long-term trends? ○○ Political boundaries such disagreements, in the course of as States and counties ▪▪ Are you trying to meet developing your framework and may make it easier to a political deadline, or a asking the questions we supplied collect data, but they do funder’s mission, funding above. not necessarily reflect priorities, or timeline? commerce/commuting While it is unlikely there will be patterns in local and complete agreement among the regional markets. group, you should acknowledge Reviewing the project Resources at the outset the need to identify goals and intended audience some common goals. This can be for the study should help • Does the scope of your study difficult. Let’s consider an example inform the choice of align with the resources that connects economic and non- boundary conditions. available? economic objectives. You may find divergence among your team ○ Your team may need to • Are there other agencies or ○ about keys areas of interest and reduce the project’s scope organizations working on evaluation. Some may be most if available resources are similar initiatives? interested in natural resources scarce. Narrowing the scope and agricultural infrastructure ○ Will that influence your of the project to ensure that ○ threatened by land use decisions project’s scope of work? what you do is done well and trends. This is an issue Are there opportunities to is better than sacrificing commonly considered by academic combine efforts? quality. researchers interested in what is ○○ A preliminary assessment called “welfare” economics. Other that does a good job on members of the team may be Timeframe a smaller scale may yield more interested in post-production the additional resources to outcomes such as strategies to • What is your timeframe for complete a larger scope of reduce food waste streams, or this study? work. transform them into productive inputs for other activities. Still a ○○ The timeframe is very third group may be more drawn important as it has the to the prospect of a detailed study potential to limit the that facilitates understanding scope of your assessment of the existing organizations, significantly.
10 11 regulations, and policies within • Level of Analysis: In terms ○○ Do farmers, ranchers, the community that support or of the economic activity, the and food producers influence the food system. Creating research team also must have adequate access to a “parking lot” to hold other specify the segment of the appropriate markets for questions or insights for further food supply chain that will their product mix, scale of study, or to convince stakeholders serve as the focus of their production, and location? to release additional resources to analysis. Will they examine the team because of the relative retail-level sales or farm-level ○○ Do things seem less fair in importance of those ideas, can sales or both? How will they terms of prices and returns often be a useful device to ensure avoid double counting? to food system participants? that all ideas and feedback • Economic and Non-Economic ▪▪ Specifically, are food are honored and captured in dollars and commercial community discussions, and Interconnections: Audiences may be interested in specific activity aligned with that disparate interests and resource investments, perspectives are acknowledged economic estimates; however, they may also human capital efforts, and, hopefully, reconciled in and innovation? developing the study’s scope be interested in broader and approach. economic relationships, and ▪▪ Is there anecdotal perhaps even non-economic evidence from community Nevertheless, you and your team connections. Any effort to members that market members will likely need to measure spillover or indirect structure and negotiation explicitly or implicitly determine impacts of establishing local power appear to affect the following aspects of data food markets and integrating their terms of trade in collection. supply chains (also called the markets in which value chains when their they operate? • Geographic Scope: The mission aligns with community geographic scope of the food system goals) should be ▪▪ Is there concern about region’s boundaries may clear about the definitions and control in the hands be dictated by jurisdiction, data needs for establishing of people outside the organization, interest in the relationship between the community? participation, data availability, project objectives and these resources, and relevancy. other economic and non- ▪▪ How would you Many studies have used economic objectives. What characterize the existing political boundaries, such approaches might be used to working relationships as a State or counties, to ensure that this work fosters between the organizations define a region, as this is the creation of relevant inter- with which you work? how data are frequently organizational relationships (Please note that such organized and reported. that advance the broader “coordination constraints” For instance, if you decide goals of the study? may inhibit your data to study the area between collection, as well as where food is produced and You may also find it helpful to your goals). where that food is consumed provide some time to discuss the ○○ Does the nature of food in your community, often general context of your study; enterprise ownership called a “foodshed,” that i.e., examine how food system matter in your discussion of follows a watershed or other conditions or participants have localized systems? boundaries, you may find evolved. Issues worthy that is difficult to find data of consideration might include ▪▪ Are locally owned categorized in this way, the following: businesses necessarily resulting in you having to better than corporate make the closest possible • Are economic relationships entities? approximation. changing within existing or new food marketing channels:
12 13 ▪▪ How will you determine whether size, organizational, or ownership issues are important to your assessment?
○○ What type of economic development models are considered desirable? Which are common in your community? What barriers might exist to shifting the status quo? A visual schematic, such as this one for the Carrboro Farmers Market in Carrboro, NC, helps stakeholders to better understand the project. • What might the outcomes be of changes to existing economic development/ later in the process, as warranted. • Establish boundaries about business practices? How Above all, remember that your what sectors, issues, and would these changes work will be useful to members of stakeholders will and will not reverberate throughout your community and to other local be considered and studied; the community? food planners and stakeholders and across the Nation, so make sure to document your action and • Provide a means for succinctly The discussion of these issues will reflection steps. communicating project ideas be very place-based and specific to and intentions to community your community, but to inform the stakeholders. discussion, you may want to share a little information on key changes Using Visual Schematics To help capture the relevant that have served as catalysts for to Engage Community scope of activities, stakeholders, local foods system expansion Members and topics that affect—and are elsewhere. Since such conversation affected by—the food system, we can be quite time-consuming, it’s offer a few helpful examples of important to agree at the outset Visual tools can support enhanced visual schematics that integrate on how much time to provide for understanding of complex planning key economic sectors, farm and this discussion. Make sure that and implementation processes, food activities, relevant local assigned individuals take notes on including the likelihood that organizations, and relationships each portion of the discussion and graphics will: among food supply chain players. that information emerging from We have deliberately chosen to • Illustrate crucial relationships, the conversation is captured in showcase alternative ways for issues, and gaps; such a way that relevant ideas and ordering and displaying food topics can be slated for discussion system information so that
12 13 Case Study: The Vermont Farm to Plate Network5
Figure 1.3: Organizational Structure of the VTF Farm to Plate Network6
Source: Courtesy of Vermont Sustainable Jobs Fund
5 For more information, visit http://www.vtfarmtoplate.com/network. 6 Ibid.
14 15 In 2009, the Vermont legislature tasked the Vermont Sustainable Jobs Fund, in consultation with the Sustainable Agriculture Council and other stakeholders, to increase economic development in Vermont’s food and farm sector, create jobs in the food and farm economy, and to improve access to healthy food. Accordingly, the network embarked on an 18-month process that resulted in the development of a 25-goal, 10-year strategic plan to strengthen Vermont’s food system. This comprehensive process represents one of the best national examples of a coordinated approach to a food systems assessment. Here, we want to highlight the incredible network that resulted from the process, and how they have organized themselves to work to meet the goals laid out in the plan. The 25 goals are exceedingly ambitious, and a major factor in meeting these goals is a well-planned network, divided into working groups with specific strategies and actions. The network is led by a steering committee, which provides overall network governance, see figure 1.3. The steering committee is coordinated by the Vermont Sustainable Jobs Fund. The other members of the steering committee include the chairs from each of its five working groups, the co-chair of the food access cross-cutting team, the Secretary of Agriculture, the Secretary of Commerce, a representative of the Vermont Agriculture and Forest Products Development Board, and a representative of the Vermont Food Funders Network. Together, this committee is responsible for coordinating an annual gathering of its members, identifying gaps in strategies, developing processes for learning, and shaping the evolution of the network. The initial network involved 125 organizational members and has grown to exceed 350 organizational members over 3 years. Members include organizations such as farms, farm enterprises, food system trade associations, co-ops, public agencies, nonprofit organizations, private funders, and community groups. Members convene as working groups, cross-cutting teams, and task forces to achieve network goals. As with many networks, particularly those of this size, ensuring continuous communication between members is a major challenge. To address this issue, they created the Vermont Farm to Plate website which features thousands of relevant resources and acts as the network’s communication and coordination platform. Members can log in and find each other as well as access meeting notes and report updates from each of the working groups, cross-cutting teams, and steering committees.7
7 For more information, visit: http://www.vtfarmtoplate.com/network.
14 15 community stakeholders can issues. For example, agricultural dynamics, appropriate analytical decide for themselves which production both impacts and is methods, and the domains of option seems to align most impacted by agriculture and food effects. Figure 1.5 aligns figure closely with their specific policy. The right-hand circle adds 1.4’s ideas with the steps a project interests and priorities. the community-based values and team should track throughout the how those characteristics interact assessment process—problem, Figure 1.4 illustrates the with the food system, as well as scope, scenario, analysis, synthesis, relationships between agriculture/ investments in community assets. and report. However, figure 1.4 food industry sectors, social values, and 1.5 may be overly broad for and key public issues. The left circle A Framework for Assessing Effects evaluation projects focused on incorporates key sectors commonly of the Food System, released by the economic and market outcomes, measured within the food system National Academies in early 2015, so exploring schematics that allow and shows the influence of key provides another schematic that your project to narrow in on a public sectors on that set of integrates similarly diverse factors, more specific set of factors may be including the full food system, of value.
Figure 1.4: Community Food System Framework by Activity, Environment and Macro-Forces8
Source: University of Wisconsin-Madison.
8 The University of Wisconsin-Madison. The framework also borrows from conceptualizations presented by the C.S. Mott Group at Michigan State University and Virginia State Cooperative Extension, in “A Community-Based Food System: Building Health, Wealth, Connection, and Capacity as the Foundation of Our Economic Future” Bendfeldt, E.S., M. Walker, T. Bunn, L. Martin, and M. Barrow. May 2011.
16 17 Figure 1.5. Assessment Analytical Framework9
Source: National Academies Institute of Medicine Report.
Figure 1.6 illustrates the food an economic assessment. These people and organizations that system with an emphasis on elements may be more important should be part of the planning networks and relationships for communities looking to bolster process. Finally, mapping these throughout the supply chain that farm access to markets, consumer connections may be an effective are responsible for most of the access to local foods, and more team-building exercise for commercial activity and impacts fully leverage existing assets and initial meetings. that may be of key interest to infrastructure. It also may highlight
9 National Academies Institute of Medicine Report,http://iom.edu/Reports/2015/Food-System.aspx .
16 17 Figure 1.6: Values Structure in Minnesota’s Food Industry10
Source: Ken Meter, Crossroads Resource Center.
10 Ken Meter, Crossroads Resource Center, October 2008, http://www.crcworks.org/
18 19 Figure 1.7, like figure 1.6, includes that catalyze markets. However, can intervene to support these many aspects of the resource it also incorporates supporting businesses and/or industry sectors providers, supply chain, and buyers organizations, policymakers, and to strengthen local food system technical service providers that interactions.
Figure 1.7: Michael Porter’s Value Chain Concept with a Food Systems Focus11
Source: Northern Colorado Food System Assessment.
It is important to recognize that appeal to different audiences, throughout the assessment to no single visual depiction of your and help recognize the variety orient team members to common community’s food system is the of perspectives that might be concepts and activities, and to “right” depiction. By definition, important, but not represented. communicate externally with different members of your stakeholders. assessment team – and your In summary, use these graphics to community – will find different appeal to diverse audiences and One very common strategy for types of system imagery attractive help individuals from different new groups considering food because of their varied interests, perspectives recognize how the system assessments is to identify experiences, and perspectives. project team is focusing the examples from other States or Therefore, there is nothing wrong project. It may be of value to communities that are similar in with using a variety of graphic ultimately choose one graphical size, focus, or goals to emulate or displays to motivate discussion, schematic that you can revisit from which to learn. While this
11 Northern Colorado Food System Assessment, http://www.larimer.org/foodassessment/
18 19 is typically very helpful, it is not • Is there a clear set of recommended that you attempt Takeaways planning program decisions, to simply mimic the assessment in policy changes, or public your own community without first The key messages of this module investments the assessment going through the many questions are that, although there are will help to guide? Are the and steps outlined in this module some best practices to follow in issues impactful enough to that will increase the relevance assessing your community’s food engage a significant part of and potential impact to your system conditions, opportunities, the community? unique community. and direction, perhaps the greatest • Is the scope of your project priority is to make the process inclusive yet focused? Is it So, with a thoughtful process community-driven by framing to develop an effective team, realistic given your resources a team and approach that is and timeline? appropriate and realistic scope thoughtful, inclusive, and driven of assessment, and place- by community-identified priorities. • Is the team that will guide, specific schematic of key sectors, Some quick questions to revisit conduct, and communicate stakeholders, issues, and/or before moving to data collection, about your assessment market dynamics, the team should community deliberations, and appropriate given the scope be prepared to proceed to the further analysis are: and key areas of interest? Is next steps of the process: data the team diverse and inclusive compilation and collection. enough to identify and add context for the set of food system issues being explored?
20 21 Module 2 — Using Secondary Data Sources
Module 2 provides an overview Unfortunately, collecting primary Therefore, we recommend of the key secondary data sources data can prove to be technically that any team planning to (data that someone else has demanding, time-consuming, undertake a community food obtained and compiled into an and expensive. For example, this system assessment or economic ordered, meaningful format) may require your team to hire impact analysis should at least proven useful in performing local one or more skilled researchers explore what they can learn from food system assessments. In this to coordinate and conduct data secondary data sources before module you will learn how to: collection, define and test requisite embarking on any primary questions and survey protocols, data collection. • Identify and access the and travel to various locations available datasets; to conduct the surveys. As a To help you take full advantage of available secondary data sources, • Determine the datasets that consequence, launching an original this module provides an overview are likely to be most useful in data collection process may slow of the main data sources that have your project; down the work of organizing your local foods effort considerably, proven useful in performing local • Evaluate key strengths and even if you are able to collect food system assessments and drawbacks of each data set; information without spending a measuring impacts. This module is and great deal of money. The other intended to make it easier for you way to obtain data is to make to identify the available datasets, • Decide when collecting use of the wealth of information determine which ones will most primary data is necessary. available from local, State, Federal, useful, and evaluate key strengths and private sources. These and drawbacks. In the U.S., we are In module 1, you launched your “secondary” data sources often fortunate to have a substantial local food system assessment by provide essential insights rather amount of data relevant to forming an effective and inclusive rapidly and in a more standardized agriculture, food systems, and team, and identifying the study’s format that allows information regional economies. Many parameters and priority issues. to be compared across regions countries do not provide such Now you are ready to find data in the country. Accordingly, we comprehensive data, especially at that will help you to better recommend exploring available the local level. To facilitate your understand the detailed workings secondary data sources before understanding of data sources of the food system, identify determining whether or not you relevant to your assessment, we prevailing conditions and trends, will need to collect primary data. organize this by the sectors of the test your assumptions, and help food system. Please recognize you to build a strong case with that there is considerable overlap local officials. among these sectors. We also list Existing Datasets Offer a secondary data sources that help There are two basic ways to Wealth of Information to examine broader ecological, obtain data. One way is for your social, and economic indicators team to collect original data. related to local food system Such “primary” data can be a Secondary data are often viability and resilience. Finally, rich way of understanding the developed with a specific analytic two appendixes at the end of the conditions that exist in your purpose in mind. Even though the module list specialized datasets community. Module 3 in this original reasons for compiling this that allow you to examine food Toolkit will give you an overview secondary data may differ from system dynamics and economic of how to effectively compile the objectives you hold for your impacts in greater depth, and primary data for community food local food system assessment, provide specific examples of how system assessment purposes. these measures may still offer secondary data can be used. important insights to your team.
20 21 Case Study: Understanding the Difference Between Primary and Secondary Data Starting Your Work with To better understand the difference between primary data Secondary Data Sources and secondary data, let us consider the work of the Bureau of Labor Statistics (BLS). BLS interviews about 120,000 households To begin the search for the most each year, asking them to keep track of what they spend for relevant and insightful data, it is everything they purchase. Those surveyed agree to list all of probably best to reflect on the their consumer purchases and report them to the BLS. Since goals and priorities your team the BLS has established a strong record over several decades established in module 1. This as a non-partisan research group that uses solid data practices, will facilitate your answering the respondents have been willing to share detailed information following key questions: about their household spending (primary data), knowing that it will only be shared and made public as aggregated information • Which data will tell a story (secondary data) without individual identifiers. that moves your food systems work forward The BLS reports this secondary data as the BLS Consumer most effectively? Expenditure Survey on its website each year.12 Keeping individual records confidential, it categorizes the survey results by income • How precise do the data need level, region, race, ethnicity, and other relevant attributes. Thus, to be to serve your purpose? as a result of BLS’s compilation, you can quickly look up how • How recent do the data much money was spent buying food each year by an average need to be to be useful household in, say, one particular region of the country. Even and persuasive? though these aggregated numbers reflect regional patterns, not actual spending in your community, they still allow you to • If the data are a few years calculate a reasonable approximation of the amount residents old, what may have changed of your community spend each year buying food. In most cases, in your community since the using these figures will yield a precise enough estimate for the data were compiled? initial phases of your local food initiative. • How close a fit are the readily available data to the questions you are trying to answer?
12 For more information, visit http://www.bls.gov/cex/.
22 23 As you address these questions, it • Is the data set you are looking and how money flows through will be important to think critically at a compilation of raw data the locale. You will be finding, at each step of the process. You from specific respondents, applying, and interpreting data to may wish to look for descriptions or has it been processed provide measures corresponding about the origin, scope, and through a mathematical to the visual diagrams you created intention of each secondary data model to represent averages through module 1. Accordingly, set you find on public websites, or aggregate numbers? you may find it helpful to organize and consider the strengths and your list of data sources so that limitations of the data’s actual • How large is the original they fit those categories. At the content. This deeper level of sample in the data? same time, it is important to analysis regarding data sources • How large is the error13 in the keep in mind that there are many will enable you to address the data set? Does the source interactions between each of the following issues, which will help explicitly list the error ranges, elements of any food system, and you determine the quality and or offer other explanations that the categories you select for accuracy of available information, that allow you to interpret the analysis may change as you dig and its appropriateness for use in degree of error accurately? further into the data. your study: • Do the data’s accuracy • Who collected these data and diminish when you study for what purpose? Does the smaller geographic areas, like Data Sources source introduce any bias into a neighborhood or a city? the data set? Several Federal agencies collect • Can your team identify • Is it appropriate for your data that are likely to be useful patterns in available time- in supporting your food system initiative to use this data series data that would set for purposes different assessment. To make it easier for illuminate new trends that you to identify relevant datasets from those intended by the may be emerging in your creators? from Federal sources, we have food system? developed the following five tables • Does the way in which the to summarize information about data source categorizes If the data source you are available datasets that are likely to information align with considering using does not offer be pertinent to conducting a local how you plan to categorize you transparent information food system assessment, including information in your study? that allows you to answer such each dataset’s characteristics and questions, you may want to limitations. These data sources • How often is this data set consider partnering with an expert have been grouped into five compiled? How recently was who is familiar with the secondary categories: it reported? data in question, someone who can help you understand the • Production Data • When you show your findings strengths and limitations of each to local stakeholders, do the data set. • Data Sources on Food data reflect their experiences? Handling, Processing, Marketing and Distribution • Are you able to map data As part of your food system you retrieve from a public assessment or economic impact • Food Consumption website? analysis, you will examine the different elements of the • Waste Recycling food system to learn how each operates, what interconnections • Demographic and Economic exist between diverse sectors, Contexts
13 When individual observations are analyzed using a statistical analysis to produce estimates, as is the case in many secondary data sets, there is an error associated with the estimates. For example, if you have an estimate of 4 and an error of .5, this means that the estimate is actually any number between 3.5 and 4.5. The error describes the level of accuracy of the estimates. 22 23 Limitations between censuses may make make censuses may between with keep current to it difficult developments. emerging for suppressed are level local reasons, which confidentiality in your gaps produce may local understand ability to conditions. year, one of that conditions capturing thus potentially of study. anomalies in the year detail. Five-year increments of time increments Five-year the at data Considerable only reflect data Reported local-level Does not provide • • • •
Very Very Very Very : The most The most Excellent Excellent
: Relatively easy. Relatively Relatively Quite high for high for Quite Quite high for high for Quite
Characteristics Counties, Counties, national. States, :
comprehensive. Levels: States, districts, congressional national. Accuracy: and less major commodities minor for comprehensive products. of use: Ease comprehensive. Levels Accuracy: and less major commodities minor for comprehensive products. of use: Ease with datasets straightforward can but detail, exceptional on the to locate be difficult site. ERS Unique Feature and of farms survey thorough nationally. production farm Comprehensiveness: Unique Feature: draw to researchers for data upon. Comprehensiveness
Production Sources Production Description The primary source for data covering covering data for The primary source farm land, and production, farm It also includes demographics. farm characteristics on information The and sales levels. of farm size by 5 years every Census is compiled of Agriculture’s Department U.S. by Statistics Agricultural National Service (NASS). datasets many provides USDA-ERS (including production farm covering and production receipts cash farm economy, the farm expenses), food food and nutrition, practices, food choices and health, markets, natural markets, international safety, economy. and the rural resources, ERS levels, and national the State At data historical extensive reports as well. Dataset Source Dataset U.S. Department of Agriculture Department U.S. Census of Agriculture address: Web www.agcensus.usda.gov of Agriculture Department U.S. Service (ERS) Research Economic address: Web www.ers.usda.gov
24 25 Limitations Modeled data from Census from Modeled data and other of Agriculture from differ may sources; Agricultural USDA-National Service or USDA- Statistic though personnel data, ERS attempt each agency from data coordinate to protocols. largely data income Farm of major production reflect than rather commodities farms; smaller specialty crop off-farm and do not cover income. is provided No information specific marketing covering use. may channels farmers • • •
Time-series
One of the : Farmers report report Farmers Characteristics Counties, metro metro Counties, Unique Feature: income farm covering data each for income and personal 1969 to from in U.S. county the present. Comprehensiveness: compilation Comprehensive by income of personal though only by source, such as categories, broad “manufacturing.” Levels: regions, economic regions, areas, metro/non-metro national. States, Accuracy: in BEA shown the trends that their reflect accurately data in the economy. experiences of use Ease sites data user-friendly most available. Production Sources Production Description An essential tool for understanding for understanding tool An essential regions, in local income personal of breakdowns including detailed BEA and expenditures. income farm all financially profile one to allow data also BEA geography. in a given farms showing data publishes user-friendly Supplemental trends, population receipts, Program Nutrition Assistance payments. of transfer and sources Dataset Source Dataset U.S. Department of Commerce Department U.S. Analysis of Economic Bureau (BEA) address: Web www.bea.gov/
24 25
Limitations to pay to be included, to pay to limit the which may number of businesses included. of a on producers commodity or particular practice production (i.e., organic). Farmers may be required be required may Farmers focus Some directories • • Characteristics It is impossible to characterize the characterize It is impossible to as a quality of these directories whole, since comprehensiveness place to from and quality will vary time. If such a listing place, and over been published, this has already avoid to know to will be important of energies. duplication http://www. ), or through local local ), or through Description If any food initiative in your in initiative food If any food has published a local region to learn this first consult directory, been compiled. has already what been have directories Many the national published through campaign Buy Local” “Buy Fresh, the Food by coordinated ( Network Routes foodroutes.org/ offices. Extension Cooperative Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data Dataset Source Dataset Regional or Community-Based or Community-Based Regional Directories Food Local Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data are You and distribution. handling, marketing, processing, food of local an overview compiling for sources data some secondary are below Listed food business sector. of the impression overall an get to carefully combining them sources, upon multiple data draw to want to likely
26 27 Limitations Listings are voluntarily voluntarily are Listings by each business submitted is not so coverage or market, and may comprehensive, frequently. not be updated the time at example, For the written, this module was Food Hub National USDA’s included 152 listings Directory to compared hubs, food for of estimates other national than 300. more
Since : Most : Most : Straightforward Characteristics Varies depending on Varies Farms, locales, national. locales, Farms, Unique Feature for source national comprehensive CSAs, markets, farmers of listings markets and on-farm hubs, food Comprehensiveness: their own businesses post basis, voluntary on a information not be thorough. may coverage Levels: Accuracy: has a listing recently and how source effort Though every been updated. integrity data maintain is made to of minor duplication and accuracy, exist. entries of use Ease Description Agriculture (CSA) enterprises (CSA) Agriculture Farmers markets Farmers Community Supported hubs Food markets On-farm • • • • A listing of: A listing voluntarily submitted Data or enterprise each market by manager Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data Dataset Source Dataset USDA Local Food Directories Food Local USDA Service Marketing Agricultural USDA address: Web www.usdalocalfooddirectories.com
26 27 Limitations arriving at 13 specific arriving at points, collection only the State identifying each shipment where which may sourced, was not be the same as farm of the location each actually grew that product. of the 50 in any locations the not show may States destination. ultimate Data cover shipments shipments cover Data from Shipping data • •
The largest The largest : Primarily intended Primarily intended
: Relatively easy to access easy : Relatively Characteristics : Presumed accurate for for accurate : Presumed
Specific entry ports and Specific entry Unique Feature: track wishing to wholesalers for on a daily of produce shipments available data trend basis. Historical 1998 from commodities most for present. to Comprehensiveness and geographic, of product, breadth available channel coverage market publicly. Levels: Farmers only. shipping points a handful of to pilot limited market States/sites. Accuracy collected are Data shipments. larger and face- telephone direct through with sales persons, contacts to-face and buyers. brokers, suppliers, analyze, validate, collect, Reporters on price, volume, data and organize of produce and condition quality, traded. of use Ease for available detail with considerable analysis. Description shipments (specific products (specific products shipments and bananas) such as carrots daily through tracked are major markets, terminal and entry shipping points, ports, including amount both shipped and prices, for and conventional organic produce. price reports market farmers added in 2014. was and introduced, recently include plans to are there in price data food other local the near future. Fruit and vegetable Fruit and vegetable of selected Pilot-testing were price data Organic • • • USDA/AMS has provided fruit has provided USDA/AMS since reports and vegetable collected are 1915. These data sources industry from directly electronically and disseminated of completion. within hours 375 separate Approximately monthly, issued daily, are reports which include the and annually, items: following Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data
Dataset Source Dataset U.S. Department of Agriculture Department U.S. Service Marketing Agricultural Market Fruit and Vegetable Data News address: Web www.marketnews.usda.gov/mnp/ fv-home
28 29 Limitations American Industry Industry American System, Classification not precisely NAICS) are food to connected activity. system industry many mean that do not report subsectors level. the county at data Categories (by North (by Categories concerns Confidentiality • • Understanding the underlying Understanding often factors economic other to reference requires herein. listed sources data
: Very detailed detailed : Very Comprehensive :
: Maps showing showing : Maps : Time-series data : Quite visual and easy to to visual and easy : Quite : Relatively Characteristics : Sometimes individual : Sometimes compiled are data : Often : Hyper-local to national. national. to : Hyper-local codes, metro zip : counties,
Unique Feature locales stores, of grocery locations stores grocery from distant are that farmers of deserts”), locations (“food programs, farm-to-school markets, sales, farmer-to-consumer direct USDA restaurants, access to Nutrition Assistance Supplemental and much allocations, Program more. Comprehensiveness data. Levels Accuracy improperly. be coded may entries of use Ease use. Unique Feature for and payroll employment covering county in each U.S. sectors industry the present. 1986 to from Comprehensiveness use. system food for but not targeted Levels and national. States, regions, Accuracy a do not offer that categories by of food-related overview thorough business activity. of use Ease with integrated now straightforward; Census. Economic
Description Number of firms Employment payroll Total • • • One-stop website showing maps maps showing website One-stop facilities, food-related of specific food items, specific prices for food and issues surrounding Atlas insecurity. access and food many from data aggregates and provides sources different about specific information (neighborhoods areas hyper-local e.g., and smaller geographies, census tracts). annual summaries of: Offers sectors, industrial key for are Data each for not including farming, county. U.S.
Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data Dataset Source Dataset U.S. Department of Agriculture of Agriculture Department U.S. Service Research Economic Atlas Environment Food address: Web www.ers.usda.gov/data-products/ food-environment-atlas.aspx of Commerce Department U.S. of the Census Bureau and ZIP Code Business County Patterns address: Web www.census.gov/econ/cbp
28 29 Limitations Often data are compiled by compiled are data Often do not offer that categories detailed or more a thorough of food-related overview business activity.
: Comprehensive Comprehensive :
: Collected every 5 every : Collected : Relatively : Relatively Characteristics : Often data are compiled are data : Often : Counties, zip codes, metro codes, metro zip : Counties, Unique Feature the present. 2002 to from years Comprehensiveness use. system food for but not targeted Levels and nation. States, regions, Accuracy a do not offer that categories by of food-related overview thorough business activity. of use Ease straightforward.
Description Compilations of employment, of employment, Compilations sales, and type of payroll, broad for data ownership sectors. industry can often making use of them exist, category by industrial businesses listing databases While proprietary publish directories examples, as two and InfoUSA, Dun & Bradstreet expensive. be prohibitively to prove cost at high these lists firms purchase marketing Many registered. have businesses they of all the U.S. a business through cost at low available is often this list though access to purposes. Even commercial for look up. they publish what to usually not allowed are users library, Data Sources on Food Handling, Processing, Marketing, and Distribution Handling, Processing, on Food Marketing, Sources Data Dataset Source Dataset U.S. Department of Commerce Department U.S. of the Census Bureau Census Economic address: Web www.census.gov/econ/ Datasets Proprietary
30 31
Limitations for different food different for patterns consumption among exist may that of a specific segments community. (fresh of food categories as etc., beef, vegetables, above) mentioned broad estimating patterns. consumer be more may Trends than specific accurate a given for numbers point. data Does not account Does not account major to Limited for useful Most • • •
: A very : A very
: Annual data : Annual data : Easy to access. to : Easy Characteristics Detailed survey of survey Detailed : county, reported by region region by reported : county, Unique Feature spending per consumer covering 1989 from household in the U.S., based on a detailed the present, to of 120,000 households in the survey on spent they what who report U.S., items. consumer various Comprehensiveness of household account thorough spending. Levels West), South, Midwest, (Northeast, by demographic well as as nation, age, level, such as income categories and occupation. race, Accuracy: with well-established consumers one BLS is considered protocols. of and reliable neutral of the most sources. data Federal of use Ease Food Consumption Food Description Food Food Housing Meat Beef vegetables Fresh • • • • • Allows researchers to estimate estimate to researchers Allows for specific per person consumption such as: categories level, income by reported are Data and other housing tenure, region, categories. Dataset Source Dataset U.S. Department of Labor Department U.S. (BLS) of Labor Statistics Bureau Survey Consumer Expenditure address: Web www.bls.gov/cex/ Food Consumption Food food. of and consumption demand for on consumer of data sources good several are There
30 31 Limitations regional differences in differences regional consumption. food than rather trends of specific levels for any consumption year. given not tallied. are Does not account for for Does not account covering accurate More foods Some important • • •
: Only major
: Annual data : Annual data
Relatively Relatively Characteristics : This is not a tally of how of how : This is not a tally
: National. Unique Feature availability food per capita covering 1960 to from generally in the U.S., the present. Comprehensiveness covered. are products commercial Levels Accuracy but rather consumed, much was based available, much was how export import, and on production, reports. of use: Ease straightforward. Food Consumption Food Description USDA-ERS publishes annual USDA-ERS capita of per compilations (for foods of specific consumption peppers, eggs, green beef, example, and apples). based on industry are Figures was much how stating reports then adjusted which are produced, imports and exports for account to of each product. Dataset Source Dataset U.S. Department of Agriculture Department U.S. Service Research Economic Use Food Capita Per address: Web www.ers.usda.gov/data- products/food-availability-(per- capita)-data-system.aspx
32 33
Limitations of local data compilations compilations data of local place. place to from vary challenge: collection data will need leaders food local with contact direct make to to officials waste local are data learn what available. currently Quality, character, and scope and scope character, Quality, a primary becomes Often • •
Variable.
If data covering covering If data Characteristics Variable. : Variable.
Usually a municipality or a food Usually a municipality or food Waste Recycling Waste Unique Feature: by tracked are wastes compostable as a may serve municipal officials, this help to data of secondary source reliable your local Otherwise, composting. plan for wish may team leadership assessment food from summaries directly its own compile to handlers. and waste agencies Comprehensiveness: Levels: service. Accuracy of use: Ease
Description Municipalities often keep data data keep Municipalities often that wastes on compostable waste local by collected are cases, hauling services. In rare will personnel government local much of this how also measure converted is matter waste compost. into Some schools or other food services also institutional generate. they the waste track Dataset Source Dataset Municipal Government Check site: Web municipal relevant government contact website(s); food institutional service directors. Waste Recycling Waste inputs, and farm dependence on imported a region’s reduce to way be a potent can products or other compostable wastes Making use of food waste by local collected are that wastes compostable on data keep Municipalities often economy. impact on the local a marked have thus can Some compost. into converted is matter much of this waste how will also measure personnel government local cases, hauling services. In rare local collection challenge: data becomes a primary Often this generate. they waste track the food services also schools or other institutional composting to survey available, and then are currently data to learn what officials waste with local contact direct make will need to leaders food year. produced each fertility is new how much to find out operations
32 33 Limitations food and farming, but one and farming, food have few option potential is time-use data explored shopping and on food preparation. every has been compiled during the years 10 years Recently, ending in zero. this has been however, annual by supplemented quickly due to surveys, changing conditions. Limited information about information Limited U.S. Census the Traditionally, • •
: Very comprehensive comprehensive : Very : Based on very close : Based on very Characteristics Requires some training, some training, Requires : Variable depending on the : Variable : Residential blocks, census tracts, census tracts, blocks, : Residential Unique feature households sampling of American and in all states. levels all income at Comprehensiveness demographics. with detailed Levels areas, Congressional metro counties, cities, and national. States, districts, Accuracy and the the geography, sampling method, is being measured; that specific quantity of use: Ease are datasets so many primarily because can site and the web available be complicated.
Demographic and Economic Contexts and Economic Demographic Description Ongoing statistical survey that that survey statistical Ongoing samples a small percentage year, every of the population the communities providing to plan need they information and services. investments more involve Although they sampling than the 10- limited more allow census, they year of trends. assessment rapid of farmers in the region, and how does this compare to the entire State? The U.S.? The State? the entire to does this compare and how in the region, of farmers U.S.? The State? the entire to compare does this level How areas? and rural Dataset Source Dataset What do the demographics of the farming population in the region look like? Do most farmers have off-farm jobs? What is the average age average is the What jobs? off-farm have farmers Do most region look like? in the population of the farming do the demographics What urban between levels household-income average in difference any Is there area? study in your level household income is the average What their homes? or own people rent many How • • • U.S. Census U.S. Community American Survey address: Web www.census.gov Demographic and Economic Contexts and Economic Demographic about the information compile some basic demographic to want well you may above, listed system food on the compiling data to In addition example: For studying. are you region U.S. compiled and mapped in the have also been data such as these. Some of these about questions detail exceptional The Census offers Atlas. Environment Food of Agriculture’s Department
34 35 Case Study: Maryland Food System Map14 The Maryland food-system mapping tool is designed to assist local food leaders and educators with understanding the current landscape of Maryland’s food system from farm-to-plate. This interactive, GIS- based mapping tool and database (shown in figure 1.2) does an exemplary job, allowing users to overlay layers of data on a map to examine Maryland’s food system including how food is grown, processed, distributed, sold, and consumed. For example, this map shows two complementary, place-based data series, egg processors and egg distributors, which is one example of how you could illustrate potential linkages in the supply chain. Though your team may not have the resources to create a tool such as this, it provides an excellent example of the types of data that can be compiled and displayed from secondary sources.
Figure 2.1: Maryland Food System Map15
Source: Maryland Food System Map, Johns Hopkins Center for a Livable Future
14 For more information, visit http://mdfoodsystemmap.org/glossary/. 15 For more information, visit http://mdfoodsystemmap.org/.
34 35 Data Source Compatibility on a national scale may be lower Cautions on Using than for communities where a Each secondary data source has Secondary Data specific ethnic food is featured. its own way of sampling and For many policy discussions, these compiling data – as well as its own differences may not matter, but In general, the strengths and definitions – each subject to its if an accurate tally of how many limitations of using secondary data own assumptions and logistical green peppers is needed to, say, might be summed up as follows: constraints. For example, the feed a Latino community in Texas, population figures listed for a close surveying of local residents Strengths: given county in one source may may be needed. be slightly different from those in • Widely available a different source. Or, rounding This issue is especially troublesome • Quick to access errors may give slightly different when it comes to data on fruit results across data sources. If and vegetable production in the • Relatively inexpensive you are combining data from Census of Agriculture. Many to compile different sources, be very careful farmers do not report specialty to make sure that these • Developed according to crop production as reliably as discrepancies do not render commodity production, and the professional, standardized your comparisons invalid. protocols USDA has also placed higher priority reporting on the larger • Often provide time-series data National Data May Not Be cash crops, so there are often useful in identifying patterns Robust When Pared Down gaps in this data. Moreover, since and emerging trends as well to the Local Level the Census of Agriculture uses as comparisons across sampling methods, the survey may different areas (cities, This is especially true when only reach commodity farms in counties, and States). working from national datasets. any given locale, thus overlooking For example, per capita or undercounting the actual Limits: consumption of green peppers number of vegetable growers. • Data compiled at a national scale may not suit local conditions • Findings should be checked for accuracy with local stakeholders • Data may not address the questions you wish to answer • Data may seem more precise than they actually are, and interpretation must be done carefully.
Example of community garden and greenhouse in an urban Furthermore, many production 36 setting. 37 and sales figures for local areas are foods” across these years, unless are among the most reliable data suppressed to protect the farmer’s you are careful to interpret the sources, so consider your strategy confidentiality if there are only a data within its limitations. with care. It is good practice to few such farms in a region. While store each data set on your own it may be tempting to use the Comparisons Across hard drive or cloud in case the number of acres of green peppers data set becomes inaccessible in produced at the State level, and Geography May Not Be Valid the future. You may also want to divide that by the number of acres A small farm in Texas may be larger communicate to policymakers the of land in the local county, this than the largest farm in Vermont. importance you place on specific would not be a valid calculation, Farming in desert conditions is datasets, to reduce the likelihood because there is no reason to certainly different than farming of budget cuts. assume that data for the local in a lush temperate zone. “Local county is an exact reflection of food” in New York State may be statewide planting patterns. considered as food that comes Takeaways from a certain valley, while “local These are simply examples; in food” in Alaska may be grown each case, your team may find it several hundred miles away • Secondary datasets are often prudent to discuss the limits of from where it is consumed. Even the first source you will each data set with local experts, within one rural region, soil types consult to get a basic sense of and interpret findings with and terrain may differ so much local conditions. appropriate care. that it would be unwise to draw comparisons about farm income • The U.S. collects and makes Comparisons Across Time across the local region. available a huge amount of May Not Be Valid data, from the local to the In Rapidly Changing Situations, national level. If one has access to time-series Conditions May Have Changed data from, say, 1960 to 2014, • Datasets are highly useful but Since Data Were Compiled keep in mind that the structure of each has its own limitations, the farm economy has changed When corn prices rose dramatically so learn about their strengths greatly over that time period. in 2011-12, this meant farm and limitations, and interpret Additionally, data collection income, as reported in the with care. protocols may have changed. For Census of Agriculture, looked • Different data sources may example, local food sales were significantly higher in 2012 than measure the same quantities primarily reported as sales direct for the previous Census of 2007. differently, and data collection to consumers in earlier Census of Yet corn prices have begun to fall protocol may change over Agriculture questionnaires, but in since then, so 2014 levels of farm different years, so be careful the most recent, some of those income may no longer be as robust when making comparisons sales were likely reclassified as as the most current Census shows. within and across datasets. direct to retail outlets. Thus, one category may have declined (direct Be Mindful of Potential • Local food initiatives have used to consumers), but that is because secondary sets in a variety of of a transfer to a more detailed Budget Cuts When Considering Public Data Sources ways to provide context for reporting of how those local sales food system assessments or are sold (through retailers), so In recent years, the Federal Census economic impact assessment local foods may be up, but at least has trimmed back the number of calculations. one category may seem to be in data points it reports, and BEA decline. Consequently, it may be has removed data from its site meaningless to compare “local temporarily, to reduce costs. These
36 37 Limitations speak directly to economic economic to speak directly farms, on conditions the covers but rather and natural environmental in which contexts resource operate. farmers is an area data this farm 30 meters by of 30 meters 10,000 square (roughly small fields so very feet) may regions or small-farm represented. not be well This data set does not set This data resolution of The finest • •
: Exceptionally : Exceptionally : One-stop source for for source : One-stop Characteristics : Relatively easy to access, easy : Relatively
: Very accurate. Based on accurate. : Very : Local to national levels. national to : Local
Unique Feature resources and natural environmental data. Comprehensiveness most covering mapping data detailed A scale. a localized at of the U.S. website of the NRCS area separate for tools assistance technical offers programs. conservation Levels Accuracy field of aerial maps, scanning thorough etc. data, of use Ease sources of data array with a broad professional However, available. and data interpreting for assistance to understand advised mapping is often of the data. and limitations the precision Description If your food system assessment assessment system food If your map watershed wishes to team boundaries, soil conditions, resource or other natural as part of planning or features this is the essential evaluation, soil and Healthy of data. source the affect certainly clean water food for possibilities economic be quite so this can producers, economic your to relevant planning and evaluation. Dataset Source Dataset U.S. Department of Agriculture Department U.S. Conservation Resources Natural Service (NRCS) (GDG) Gateway Data Geospatial address: Web http://datagateway.nrcs.usda.gov Appendix 1 — Specialized Secondary Datasets Secondary Appendix 1 — Specialized
38 39
Limitations suited to analysis in key in key analysis to suited and major States farm commodities. number of researchers in research engaged with partnerships USDA-ERS. in sales started food” is 2008, but sample size and (see Low limited 2011). Vogel Appears to be more be more to Appears a limited for access Greater on “local collection Data • • • Since participation is voluntary, voluntary, is Since participation and business listings farm be to be presumed cannot comprehensive.
: Focuses on specific Focuses : has Maker : Market
: Based upon a blending : A hybrid
Characteristics
: Restricted access, though : Restricted listings locate to easy : Quite
Presumed accurate but may but may accurate Presumed : Based on thorough surveys of surveys : Based on thorough
: Specific farms and categories of categories farms and : Specific localized although more : States, Unique Feature survey representative nationally about 5,000 fields and 30,000 targeting each year. farms Comprehensiveness but also the economic commodities, including off-farm viability of farms, is the survey that ARMS states income. of the be representative to “designed to support State- U.S., and Continental agricultural key for 15 estimates level States.” Levels farms. Accuracy farms. U.S. of use Ease via available are summaries of data on their posted reports USDA-ERS website. Unique Feature of stakeholders online directories supply chain, the food throughout consumer a mapping utility and and the State at survey expenditure levels. county Comprehensiveness as of 20 states by been adopted this writing. Levels incorporated. are data of use Ease have businesses that and food of farms with the service. registered Accuracy: updating. require
Description This annual survey of farm of farm This annual survey summaries financials provides covering data of important at the mostly production, farm level. operation farm may these surveys from Data modifying for also be useful local express IMPLAN to (see business conditions module 7). platform ordering An Internet wholesale trading, to geared producer allows Maker Market wish they products list to while available, make to may and consumers buyers place orders. also be used may These listings farms identify to researchers by are businesses that and food trade. food in local engaged Dataset Source Dataset U.S. Department of Agriculture Department U.S. Service (ERS) Research Economic Resource Agricultural (ARMS) Survey Management address: Web www.ers.usda.gov/data- products/arms-farm-financial- and-crop-production-practices. aspx Maker Market address: Web https://national. foodmarketmaker.com/
38 39 Limitations These data currently have have currently These data food for local utility limited or economic assessments since impact calculations, to the findings apply only the However, level. national as a serve may data national local compare benchmark to against. data
: Includes
: First nationally nationally : First Characteristics
Easy-to-use reports are are reports Easy-to-use : Very reliable, robust data set set data robust reliable, : Very National Unique Feature of American survey representative data detailed collects households that household food about low-income affect that and factors purchases, spending decisions. consumer Comprehensiveness a nationally from information detailed sample of about 4,826 representative households. Levels: Accuracy purposes. research certain for of use: Ease data, aggregated reporting available access wishing to but researchers restricted have research for data raw of a Memorandum access, requiring (MOU) with USDA-ERS. Understanding Description Assistance Program Program Assistance Supplemental Nutrition Supplemental Income • • Provides information information Provides and about household size available composition, food and acquired resources, (and their prices). items on: Also includes information Dataset Source Dataset U.S. Department of Agriculture Department U.S. Service Research Economic Food Household National Survey Acquisition and Purchase APS) (Food address: Web www.ers.usda.gov/data- products/foodaps-national- household-food-acquisition-and- purchase-survey.aspx
40 41 Farm-to-Plate initiative, that More Detailed Food Appendix 2 — Examples includes marketing organizations, Consumption Calculations: farm input suppliers, farms, of Using Secondary 16 distributors, retail food stores, Conner et al. (2012) argue that a Datasets nutrient management firms, local seasonal diet based on USDA food access and nutrition groups, Dietary Guidelines would create educators, workforce development more revenue than a local seasonal University of Wisconsin — resources, business planning and diet based on current consumption North Central Region County technical assistance resources, patterns. Yet this study found Food Systems Profiles Portal financing organizations, energy there was no credible method for firms, regulatory and public policy measuring current consumption Covers Indiana, Illinois, Iowa, bodies. Limited to the State of of local food on a Statewide level. Kansas, Michigan, Minnesota, Vermont, though other States A subsequent paper (Conner et Missouri, Nebraska, North 17 are creating similar platforms al. 2013) was able to measure Dakota, Ohio, South Dakota, and and this model could be adapted and account for about $52 million Wisconsin. This resource uses elsewhere. in local food expenditures, equal public secondary datasets to to about 2.5 percent of all food provide an overview across the Web address: http://www. expenditures in Vermont, but North Central food system and vtfoodatlas.com/ estimated that the overall total serves as a baseline for community might be more than twice that leaders and educators to identify amount if more complete data opportunities for growth or Crossroads Resource Center — were available; private firms were expansion in regional food State and Regional Food often unwilling to share local food- systems. Shows a large number System Assessments trade data. of food facilities, demographic Statewide assessments for characteristics, health, and Peters, et al. (2007)18 proposed Minnesota, Ohio, Indiana, South socioeconomic measures for each a range of diets (from vegetarian Carolina, Mississippi, and Alaska county in the North Central region. to more protein-intensive) in that combine secondary data Similar data could be generated for estimating land requirements for compilations and first-hand any region by other researchers. producing local foods; this was interviews with wise practitioners. then used to develop a spatial Also featured are regional Web address: http://foodsystems. model for evaluating local food overviews of the farm and food wisc.edu/ capacity (Peters et al. 2009).19 economy for more than 110 regions across the U.S. These have Vermont Sustainable Jobs Fund proven useful for animating local — Vermont Food System Atlas foods activity. The Vermont Sustainable Jobs Fund developed a food system Web address: http://www. mapping tool for Vermont, in crcworks.org conjunction with a statewide
16 Conner, D., Kahler, E., Berlin, L., & Hoffer, D. (2012). “Economic opportunity in local food systems: Baselines and targets,” University of Vermont Center for Rural Studies, Opportunities for Agriculture Working Paper Series (2)1. 17 Conner, D., Becot, F., Hoffer, D., Kahler, E., Sawyer, S., & Berlin, L. (2013). “Measuring current consumption of locally grown foods in Vermont: Methods for baselines and targets,” Journal of Agriculture, Food Systems, and Community Development, 3(3), 83–94. http://dx.doi.org/10.5304/ jafscd.2013.033.004 18 Peters, C., Wilkins, J., & Fick, G. (2007). “Testing a complete-diet model for estimating the land resource requirements of food consumption and agricultural carrying capacity: The New York State example.” Renewable Agriculture and Food Systems, 22 (2), 145–153. http://dx.doi.org/10.1017/S1742170507001767 19 Peters, C. J., Bills, N. L., Lembo, A. J., Wilkins, J. L., & Fick, G. W. (2009). “Mapping potential foodsheds in New York State: A spatial model for evaluating the capacity to localize food production.” Renewable Agriculture and Food Systems, 24 (1), 72–84. http://dx.doi. 40 org/10.1017/S1742170508002457 41 42 43 Module 3: Generating and Using Primary Data
Module 3 provides a detailed The content of this module is description of how to gather appropriate at the stage of your Before You Start primary data (data that you collect project when your team has: yourself) in order to conduct your • Defined its scope, specific Before you embark upon your economic impact assessment. In primary data collection process, this module you will learn: goals and objectives, timeframe, available you will need to think through the • What to do before you start resources, and regional concept of a local food assessment your primary data collection, boundaries (module 1); study and its associated measures. including thinking through This involves the identification and your local food assessment • Used (or tried to use) definition of three critical study and its associated measures; secondary data to understand components: baseline conditions, or • Sampling techniques (i.e., who to estimate the potential • Dimensions; will receive the questions you economic contribution or • Variables; pose), including what each impact of your project, but approach entails and the has found that you still need • Attributes or characteristics. associated pros and cons; additional data to accomplish the goals of your assessment; Prior to initiating your collection • Qualitative and quantitative of primary data, you will want data collection methods, • Examined available secondary to make sure you review your including a detailed data and determined that data team’s stated goals, as described in description of data collection do not exist for the specific module 1, and make sure that your methods, tips to collect question(s) you seek to goals are defined precisely enough unbiased and valuable data, answer, or available secondary that they can be measured. For and uses for each approach; data do not reflect conditions example, studies interested in and in the study area; figuring out ways to improve • Preliminary data analysis • Determined it has substantial community well-being would be techniques. time, resources, and expertise difficult to implement, given the to devote to collecting and complex and broad nature of the Primary data are the data that you analyzing primary data. term “well-being.” Accordingly, collect yourself, as opposed to Primary data collection, you may need to spend some secondary data that have already analysis and interpretation time breaking down the various been collected by someone else. require skill and training. It components of well-being that Primary data may help fill in gaps often costs, at minimum, your study is really interested in (where no secondary data exist) several thousand dollars identifying. For example, your and/or make your study more to conduct even a small focus may include one or more of precise and grounded in the local study, as you may need to the following factors: situation. Collecting and analyzing xdhire people to test and • Economic prosperity; data is neither a simple nor administer the surveys/ inexpensive task. We recommend interviews, pay for travel, • Public health status; that you have a team member compensate respondents for that has statistical training or their time, etc. • Level of social interaction; and hire an expert to assist you with • Attractiveness and this process. sustainability of built and natural environment.
42 43 Next, you’ll want to think of Indicators of Environment They also include a sample survey indicators for each dimension. and Aesthetics: instrument they believe could These are the signs you would look be used (or customized) by a for to determine that a particular • Amount of green space; community to learn about system- indicator is present or absent. • Visual appeal of surroundings; wide indicators of relevance to A few examples of common regional food discussions.20 indicators that are of frequent • Sales of organically and interest to communities engaged sustainably grown products; When choosing the data to in local food assessments are and be collected, it is necessary shared below. to establish explicitly the link • Public access to education on between objectives and goals, Indicators of Economic Prosperity: recycling and composting. performance indicators and the data types, and variables necessary • Level of vendor viability (for The bullets above merely represent to generate them. These links business prosperity); examples from a large range of have implications not only for data possibilities. The key in each case collection, but also for policy. If a • Amount of product purchased is to choose and define each from neighboring businesses policy requires increasing food- indicator with care, and create a industry jobs, but the community (for prosperity of community logical justification for including (or economy); and is unable to collect the necessary excluding) any particular indicator, data to assess employment in • Improved food affordability making sure that they are tailored targeted categories across time, (for household prosperity). to and appropriate for the the policy performance cannot particular scenario being studied. be reliably assessed. There is no Indicators of Public Health: prescription for selecting data types and variables, These must • Improved access to healthful Identifying Key Indicators be based on needs and local foods; circumstances. for Your Community • Increased access to nutrition education; and Although there are some • Ability to bike and walk to secondary databases being Variables and Attributes/ farmers markets. established to make the indicators Characteristics as well suited to your community’s Indicators of Social Interaction: mission and outcomes as possible, The next step is to choose which it may be necessary to collect • Diversity (race, age, gender, variables measure each indicator. data with appropriate questions Think of variables as a set of ethnicity, culture) of vendors or measures. Yet, it may be and shoppers; questions on a survey or interview; worthwhile to explore what other the attributes or characteristics are • Capacity to convene communities have done, as a the individual responses to these gatherings of community means to brainstorm and refine questions. members; and your team’s indicators before defining the variables as you solicit Determining who will receive the • Neighborhood participation information on your region. In a questions you pose, i.e., your in market planning and paper justifying the need for a study sample, is a very important governance. new set of indicators to evaluate decision. There are three primary the local food system, the Institute approaches for developing a for Agricultural and Trade Policy study sample, each of which is outlines how to translate goals discussed below. to outcome-driven indicators.
20 For more information, visit http://www.iatp.org/files/indicators-web.pdf.
44 45 in your region, it is more likely the results will be applicable to the larger group. For example, if you are interested in understanding whether there is unmet demand for local foods, and you only survey customers who are currently shopping at farmers markets, you may end up with results that do not accurately reflect your entire population. The major challenge of using a random sampling method Data tools, such as USDA’s Census of Agriculture, can be useful in assessing local needs. is that it is often difficult to obtain a complete list of potential survey respondents within the targeted Census Representative Sample study area.
A census is where you attempt to Short of carrying out an actual A Non-Representative or obtain information from the entire census of the targeted population, relevant population in the targeted it may be practical and sufficient Non-Random Sample study area. A census will provide to create a sample which you can Under certain circumstances, you with the most complete credibly claim “resembles” the it may be sufficient or practical picture of your stakeholders; for population. One common method to use a non-representative or example: all vendors at a farmers used to develop a representative non-random sample. This type market, all institutional food sample is a probabilistic sample of sampling does not allow for service operations in your region, method, which recruits members generalizing results beyond the all businesses on a given block, all of the population for the sample sample, but has many advantages. adult residents in a given senior based on probability targets. For example, non-random samples center, all customers of a particular To achieve these targets, the usually involve decreased costs in Community Supported Agriculture most common technique used is time, money and effort, as well as operation, or all meat processing random sampling, which requires the ability to target a specific group facilities in your region. The generating a complete list of of interest (e.g., likely customers difficulty of obtaining information possible survey respondents of a given market). Here are a few from each member of a population and then selecting individuals common strategies for undertaking can vary considerably based on at random. such a sample effectively: the size of the population and the turnover in membership. For The primary advantage of using • Key informants are those who example, it is likely to be easier a random sample is the ability to have substantial knowledge to contact all vendors at a single credibly generalize results to the about your subject of interest. farmers market than to contact overall population: if the sample Examples include vendors at all employees at a firm with high closely represents the population turnover rate. 44 45 a farmers market, farmers example, if you are studying subject. For example, when selling to farm-to-school firms, you might look at learning about a specialized programs, or elected officials firmographic dimensions like product, you may ask your of your county or State. It geographic location, size of informant about the people would not make sense to business, years in business, to whom he/she buys and ask a random sample of the products sold, and number sells product. The size of U.S. population about being of employees. On the other the sample grows over time a vendor or customer at hand, if you are studying a as informants identify new your local farmers market. sample of individual people, contacts. It would make sense, you may wish to examine however, to ask a subset demographic dimensions like • Quota sampling ensures that of participants in a farmers age, gender, race, ethnicity, the sample resembles the market vendor-training course and education. population by establishing about their experiences. quotas or minimum You will likely gain valuable • Snowball sampling often thresholds for segments of information from this survey goes hand in hand with key the survey population with approach even if the sample informant sampling. Once specific characteristics. For is not representative. One you identify someone who is example, if the population commonly used strategy for knowledgeable on a subject, of farmers market vendors selecting a key informant it can be helpful to ask the in your county is 50 percent sample is a technique in which subject for suggestions male and 50 percent female, you attempt to ensure that of other people who are with the population divided the sample represents the knowledgeable and have between 75 percent farmers diversity of the population meaningful experiences or and 25 percent vendors of along several dimensions. For perspectives on the same prepared food, you may decide to recruit subjects for your survey until your sample meets these criteria. While this sample will not be representative of the entire population, this method will still enable you to avoid some degree of bias (e.g., including only males or only non-processed food vendors in your population sample for farmers market vendors). This sampling technique may also be used to oversample minority populations or seek out divergent viewpoints to ensure you hear a broad array of viewpoints. • Convenience sampling selects subjects who are easily accessible. This is a very common method of sampling, A common sampling and encompasses many method involves inviting possible strategies. It may existing customers to fill involve sampling shoppers at out paper surveys such as this one. a farmers market on certain 46 47 days by setting up a booth or While a great deal of standing with a clipboard and meaningful, insightful, and asking for participation. It may actionable information can be numbers involve hanging up signs at gleaned from non-random samples and data the local health food stores, if care is taken to minimize bias that can be or sending an email with a and discuss sampling limitations, measured. link to an on-line survey to it is important to keep in mind This type of a group of farmers, vendors, that it is difficult to avoid bias research counts co-op members, or another entirely even with the best of the frequency population of interest. The intentions. Those stakeholders with which purpose is to obtain a sample who enjoy taking surveys or who a given with minimal cost and effort. have stronger opinions about the event issue being surveyed are at risk occurs or When using non-random sampling of being oversampled and thus response is techniques such as those overrepresented, while farmers given; these described above, you must be and other working professionals methods careful to ensure that you obtain are often reluctant to participate commonly use a breadth of viewpoints and avoid in time-consuming surveys or surveys in which obvious biases in your sample. To interviews. Therefore, it is useful to subjects choose answers best maximize the diverse composition compare the key attributes of the corresponding to their experience. of population samples obtained sample against the distribution of Often, statistical analysis can be through non-random means, some attributes in the entire population, performed, comparing frequencies researchers choose to administer so that you know how well the and finding relationships among intercept surveys at markets or two groups resemble each other responses. Qualitative methods stores on a variety of shopping and can identify areas of potential tend to collect a large amount days and times. Similarly, email oversampling or under sampling. of information about a relatively links can be sent to list serves Additionally, when you have a small number of subjects (depth), of various types of farms or non-random sample, for some while quantitative methods gather businesses. You may also want to questions it will not make sense a small amount of information adopt the practice of triangulating to report an average. Reporting about a large number of people your findings – i.e., asking the ranges of responses, medians, (breadth). Both are very powerful questions from different sources to and response categories may be and important methods that often see if you come up with the same more useful. complement each other. One or similar results. For example, you well-established practice is to use might decide that for any specific qualitative methods to familiarize response to rise to the level of a oneself with an area, and get an significant observation, the same Data Collection idea of what the major issues or response must be raised by at themes are, then use quantitative least 3 (or 5, or 10…) respondents There are two main types of methods to count and correlate independently in the course of data collection: qualitative and the prevalence and depth of these your surveys/interviews. While quantitative. Qualitative research themes in a larger population. this technique will not give you a collects data detailing the quality In general, unless your research random sample, it may well give of someone’s experiences, usually questions are fairly straightforward you excellent insights about which the subject’s account of events in and simple (e.g., “how much issues are considered important their own words, very often in the money was spent on…”, “how by individuals in your sample. form of interviews. Qualitative data many people attended….”), These opinions may not always be deals with descriptions and data beginning with a qualitative study correct, but they are likely to be that cannot be measured using is a good idea. valuable in giving you information numbers. Quantitative research, about how stakeholders – or at on the other hand, deals with least a segment of stakeholders – view their food system. 46 47 Case Study: Four Main Types of Survey Variables
• Nominal: These variables are categories that have no hierarchy (e.g., high/low, good/bad.). Examples of these include the city/State where you live or were born, occupation, race or ethnicity, type of car you own or transport you use, types of foods you eat or prefer. • Ordinal: These variables contain some degree of hierarchical order. A very common question type that yields an ordinal variable is called a Likert-scale. An example of a Likert-scale is shown in table 3.1. These scales are used to measure agreement with a statement, likelihood of a behavior, quality of a product or service, frequency, importance, and other viewpoints. Often a five-point scale is used, with one equal to strongly disagree, very unlikely, very poor, never, etc. and five equal to strongly agree, very likely, excellent, always, etc. Likert scales typically feature odd numbers of choice options so that the list of ordinal variables includes a “neutral,” “no opinion,” or “does not apply.” It is important to note two key features of these scales. First, they are internally true (my “strongly agree” is stronger than my “somewhat agree”), but your “strongly agree” may be stronger than mine. Also, it is not possible to know the distance between each point of the scale.21 Nonetheless, these scales are very commonly used in research and yield useful measures of respondents’ attitudes, beliefs and intended behaviors.
Table 3.1: Example Likert Scale Strongly Neither Agree Disagree Agree Strongly Agree Disagree or Disagree 1 2 3 4 5
• Interval and Ratio. In contrast to ordinal variables, the distance between responses of two other types of variables — interval and ratio — can be measured both internally (for a given person) and externally (between people). Interval variables have no true zero (like year of birth and degrees Fahrenheit), so 40 degrees F is not twice as warm as 20 degrees F. Most numerical variables do have a true zero (e.g., age, income, revenue, profit, expenditure, height, weight), so the ratio makes sense: someone who spent $40 at a market did spend twice as much as someone who spent $20.
21 For more options on Likert scales, see:http://www.gifted.uconn. edu/siegle/research/instrument%20reliability%20and%20validity/ likert.html
48 49 Qualitative Methods Figure 3.1: Questions from the Pueblo County Food Assessment Youth Focus Groups Two common qualitative methods are observations and interviews. Observations involve going to an unfamiliar setting (e.g., places of business like a farm, food hub, distributor, manufacturer, or market), then watching and observing what unfolds. There is a broad array of things to look for, such as: • Participants (who is there, how many, what are their demographic attributes) • Behaviors (what do they do, for how long) • Interactions (with whom do they talk, with whom do they work, what is the non-verbal communication happening) • Physical environment (sights, sounds, climate, location) • Outcomes (what happens Source: Pueblo County Food System Assessment: Public Health & Food Access Report as a result).
Observations are a good starting Interviews involve asking people a information on certain themes, or point for learning about an series of questions on the topic at to amend the order or content of unfamiliar subject so that you are hand. They may take the form of questions as new topics emerge. better prepared to ask informed one-on-one discussions, or a group Questions should generally be questions. You can focus like a discussion (a focus group). The open-ended, allowing the subject journalist would on the five W’s: purpose of conducting interviews to answer in his or her own words. Who is present? Where are they? – either with an individual or What are they doing? When does with a group – is to help discover As part of a Pueblo County, CO, this happen? Why does it happen? the interconnections of ideas food assessment, several focus You can also pay attention to what and behaviors that make sense groups were conducted to learn you learn from your senses: What from the perspective of those we more about youth perspectives on do I see? Hear? It is useful to write interview. It is good to assemble local foods22. A set of questions down your immediate perceptions a formal questionnaire and follow asked of that group are shown in first and to analyze them it as a general guide to ensure figure 3.1. separately, to reduce the chance key topics are covered, but it may that you will only notice what you be necessary to ask additional want to see. probing questions to get deeper
22 Moschetti, Hopewell, Sullins, Colpaart and Thilmany. Pueblo County Food Assessment. September 2013. Available at: http:// county.pueblo.org/government/county/department/city-county-health-department/pueblo-county-food-system-assessment
48 49 At the same time, asking people • Safest to riskiest. It is best customary to put demographic to offer solid details is critical. to open with a safe question questions (age, race, gender, Often, asking people to tell a story to put the subject at ease education) at the end of about a “time when” a particular and in a talkative mood, and the survey. experience happened will leave controversial or risky evoke more detailed and candid questions for later in the Having clear, straightforward responses than formal questions. interview process in case instructions is critical when If an interview subject is not highly the risky question causes administering surveys. To increase verbal (often true with farmers), the subject to terminate the the clarity of the information it can be useful to bring photos or interview or become submitted, it may be useful to other artifacts that help prompt less open. word the survey questions so that more detailed answers, as long as the respondent is only allowed one your choice of these items does It is important at the very least answer (i.e., the instruction might not telegraph that you are looking to take copious notes during say “choose one” rather than for a certain set of answers, or interviews; in fact, professional “choose all that apply”). discourage your subject from researchers often record and replying with his/her honest transcribe their notes for future It is always good protocol to opinion. analysis or hire a transcription pilot test the survey with 5-10 service. If you are considering this volunteers to make sure that In general, the order of questions path, however, please be aware the survey captures the type of should follow these guidelines: that it can consume a great deal data you are looking for without of time and resources to record creating an excessive burden for • General to specific. This and transcribe interview notes. the respondent. You will want to order helps to avoid biasing Therefore, if your budget is limited, ask your volunteers to: later responses. For example, you may wish to pare down your if you first ask about what plan for documentation. • Take the survey; foods consumers like to buy at farmers markets, then ask • Record how long it takes them where they shop or what Quantitative Methods to complete it; they buy in general, they may Surveys are the most common • Note any spelling or format already be thinking about method of gathering quantitative errors; and farmers markets and answer data. They involve asking subjects in those terms, thus skipping • Identify any questions that a common set of questions, over potentially important were difficult to understand generally with short or close- information about other or answer. ended answers (the respondent venues. chooses from a set of pre- In general, any survey that determined options). As a general • Most to least important. takes longer than 15 minutes to rule of thumb, the order of Some respondents may have complete runs the risk of turning questions in the survey instrument time constraints or become off or discouraging potential should mirror the order used for bored with the interview respondents and/or suffering from interviews; e.g., general and end it early. accuracy problems as interest to specific, most to least It is best to get often wanes in survey taking. important, and safest important Longer surveys are generally to riskiest. It is also answers first. possible only with highly engaged respondents who are motivated and interested in the results. Ask yourself how you will use each question in your assessment. If it is unclear, consider leaving the question out. Spend the time up-front to make sure your 50 51 survey instrument provides clear Figure 3.3: Dot Poster Survey Example instructions, is easy to complete, and is short enough to maintain respondents’ interest. Note that once the survey is sent out, it is impractical to change it because meaningful comparison between the first survey and the “changed” survey is not possible.
Considering Options for Administering Surveys
Figure 3.2: Dot Poster Surveys23
Source: Ragland, Lakins, and Coleman, 2011.
many advantages. These surveys visitors, it may introduce bias are very simple to administer, into the results.24, 25 Figure 3.3 responses are easily tallied, and it illustrates an example Dot Poster is possible to get a large number Survey used at a farmers market. of responses in a short period of time. Respondents report that To use this method, your team this method is faster to complete, writes relatively simple, closed- more fun, and less intrusive than ended questions (with responses written surveys or face-to-face in columns) on large flip charts interviews. The drawbacks are the placed on easels. Respondents are limited number (usually four or given a strip of colored dots (one Source: Lev, Brewer, and Stephenson, (2008). five) and type of questions (simple dot per question) to place on the and closed-ended) that can be corresponding answer. Examples of asked in this format, and the questions asked are: Dot Poster Surveys, also known inability to correlate individuals’ as Rapid Market Assessments, responses (to look for patterns in • How much did you spend at were developed by Larry Lev how each given person answers a the farmers market today? and Garry Stephenson at Oregon series of questions). In addition, State University (figure 3.2) to • Was the farmers market your since all subsequent respondents gather information from farmers primary reason for coming will see the “votes” of previous market patrons, and they have downtown this morning?
23 Lev, Brewer, and Stephenson. (2008). “Tools for Rapid Market Assessments.” Oregon State University Special Report 1088-E. http://smallfarms.oregonstate.edu/sites/default/files/small-farms-tech-report/eesc_1088-e.pdf 24 For more information, see “Dot Posters: A Practical Alternative to Written Questions and Oral interviews,” Journal of Extension. (October 1999). http://www.joe.org/joe/1999october/tt1.html or Analyzing Three Farmers Markets in Corvallis and Albany, Oregon, Oregon State University Small Farms Technical Report Number 2. (October 1998). http://smallfarms.oregonstate.edu/sites/default/ files/publications/techreports/TechReport2.pdf 25 An example of results obtained from this method include: Ragland, Edward, Velma Lakins, and Carlos Coleman. Results of Dot Survey: USDA Outdoor Farmers Market, Washington, DC. U.S. Department of Agriculture, Agricultural Marketing Service. http://apps. ams.usda.gov/MarketingPublicationSearch/Reports/stelprdc5093878.pdf 50 51 • Have you or do you plan to not utilize these markets. Another opinions than non-respondents. eat at a nearby restaurant or challenge is that it is difficult to For some purposes, it is better do additional shopping at a collect sensitive information – to aim for a smaller sample but nearby business either before such as total farm sales – through invest in a good response rate, or after this market visit? an online survey. Online surveys for example, by offering $10 for work the best when this type of a returned questionnaire, or • On average, if a specific item information is not required. entering a drawing for a prize. costs $1.00 in the grocery store, how much would you be willing to pay in the Written Surveys Telephone Surveys farmers market for a similar Paper surveys are either Telephone surveys have many product produced locally? administered in person or by of the pros and cons of mailed mail. Each has its drawbacks. In- surveys. Exclusive reliance on Internet Surveys person surveys generally sample phone books and land lines may the most convenient group create a bias in the sample toward Internet surveys are becoming (convenience sampling) and may older people, as many younger increasingly popular, supported be biased (i.e., those who shop at people exclusively use cell phones. by advances in software and a certain place at a certain time, Relative advantages of phone and popular sites like SurveyMonkey®. and enjoy taking surveys). In- mail surveys are detailed below.27 Internet-based surveys have the person surveys also run the risk following advantages: relative ease of annoying people who came Phone Survey Advantages of response, cheaper to administer, to shop, not take surveys. Mail no need to pay for travel to specific surveys can be designed to return sites to conduct surveys, and the a representative sample, but tend • Ability to sample selectively to ability for subjects to respond to have very low response rates. reach sample quotas (a given when they wish. Additionally, The Dillman Method, consisting percentage of females, for many survey platforms compile of an introductory letter, survey example) responses into a spreadsheet for with addressed stamped return you, and this can save a great deal • Quicker to complete and have envelope, and reminder postcards, available data of time compared to entering the is commonly used in mail surveys. data by hand after all responses Acceptable response rates vary • Survey caller can explain have been collected. It is worth greatly by population.26 Surveys complex questions noting that all platforms are not of employees or key stakeholders created equal. It may be worth should be well over 50 percent, Mailed Survey Advantages paying up-front for a site that while surveys of customers may supports robust backend features be in the 20-40 percent range. that facilitate data analysis. When administering surveys to • Lower cost the general public, single digit However, there are several • Ability to add visual graphics response rates are not uncommon. or longer questions disadvantages, including the Lower response rates are more potential for a biased sample acceptable with larger sample • Individuals can answer at towards Internet users and frames as they result in more their convenience and speed difficulties limiting respondents. overall responses. Be aware that of consideration rather than You may be interested in learning a low response rate can lead to meeting the timeline possible about sales information for bias if people who are interested with an intercept survey farmers market vendors, and may enough to respond have different get responses from farmers that do
26 For more information, see:http://faculty.washington.edu/jelmore/articles_online/Dillman-Des%26Admin_Ma.pdf . Here are design guidelines for written and on-line surveys:https://www.une.edu/sites/default/files/Microsoft-Word-Guiding-Principles-for- Mail-and-Internet-Surveys_8-3.pdf 27 Peter Dominowski and Al Bartholet. 1997. The Listener Survey Toolkit. Available at: http://www.wksu.org/Toolkit/chapter4/ section1.html 52 53 outcomes, and many types of farms too small to have adequate Data Analysis interaction that produce successful quantity of product and product outcomes, so expect variation. mix). Dividing responses between the three codes makes comparing Qualitative Analysis Methods Coding qualitative responses easier, and The goal in analyzing responses To make sense of your data, you can facilitate the identification of to qualitative questions is to will need to develop a coding trends among respondents. understand how the respondent scheme. The coding scheme you sees the situation, what they use should help you to group Drawing Relationships think is important and why, similar answers and enable you to Understanding trends in your data and what general trends and draw conclusions from the data is very important. Many people themes resonate among the as a whole. Some of the codes use what is called a mind map to entire population or sub-sample will be pre-set based on interview help them see these connections. of respondents. Qualitative data questions, while others will emerge Write the recurring concepts and analysis is generally comprised from the analysis. For example, key themes identified through of four steps: documentation, suppose you asked farmers market your research on a blank piece of coding, finding relationships, and managers an open-ended question paper. Then, by drawing arrows corroborating. about why they believed they had to connect related themes, you difficulty with vendor retention. often find strong relationships. Documentation Each response will be different, Note that drawing mind maps by Documentation refers to the but perhaps you can identify some hand is appropriate in many cases, overall process of identifying overarching themes that you can but there are also a plethora of recurring and important themes then code. In this hypothetical software tools and applications from your observations and example, potential codes may available. Do not fear that these interviews. The process begins include: market factors (e.g., not relationships are subjective; they with taking field notes during enough customer traffic), vendor are real, and respecting them is interviews and possibly having factors (e.g., too much vendor very important. Figure 3.4 gives an those interviews recorded and competition given the clientele), example of a mind map. transcribed. and individual farm factors (e.g.,
By reading through your notes and Figure 3.4: Example Mindmap28 transcripts, as available, you will begin to note preliminary themes, ideas, and significant connections. What you are looking to track and identify are interactions between people, between people and ideas, and between people and places. You should also be looking for evidence of drivers: why people have made the choices they have and why they have become convinced that what they are doing is what they should be doing. Keep in mind that people are different; there are many paths to particular
Source: Tony Buzan
28 Buzan, Tony. (1974). Use Your Head. London: BBC Books. London School of Economics. 52 53 You may also choose to more Case Study: Making Small Farms into Big Business29 formally create a data matrix (with codes in columns and respondents South Carolina’s 2013 Making Small Farms into Big Business provides in rows) to determine connections a good example of a study that sets the stage using secondary data, and correlations among variables before filling in information gaps with primary data collection. To (types of interaction or quality create an overview of the economic conditions in the State, the team of relationship, for instance). For compiled a variety of data from secondary sources including: the example, do those who commonly USDA Economic Research Service, the Bureau of Labor Statistics, the have a high rating on one variable Census of Agriculture, County Business Patterns, Centers for Disease also have a high or low rating Control and Prevention, the National Center for Education Statistics, on another? the South Carolina Department of Natural Resources, and the National Hydrography dataset. Corroborating Since these data do not offer a comprehensive view of local Results should be triangulated or conditions, the team also conducted key informant interviews corroborated with other findings. with over 150 practitioners across the State. Questions focused If, for example, you find a trend in on emergent local foods activity, the State’s role in shaping food responses from farmers market systems, infrastructure requirements, regulatory barriers to local managers that does not appear in food trade, and availability of credit. To collect further primary your farm responses, you need to data, the team conducted a survey of specialty crop farmers. This consider alternative interpretations contained a variety of questions useful for both qualitative and or explanations. Do the farmers quantitative analysis: multiple choice, check-all-that-apply, open- market managers represent the ended questions requiring text answers, and 5-point Likert scales. By same markets as the farmers? corroborating these secondary and primary data, the team came up Do market managers have with a strategic approach that addresses all levels of the State’s food access to different information system (see figure 7). The result was a $9.85 million investment plan than farmers? Do you have for local foods, announced by State officials in December 2013, which representative samples of both focused on strengthening networks of food businesses. groups? Essentially, if the different sources of information that you have do not corroborate each other, your team needs to do some The first step in analyzing of responses provided for deep digging and investigation into quantitative data is to calculate each question. Frequencies why this is the case. and report the descriptive are most typically expressed statistics. You can do this in a in a table that indicates the Quantitative Analysis Methods spreadsheet program like Excel number and percentage of or one of the database software responses. For example, Quantitative data will need to management programs mentioned we collected data from 100 be coded into a spreadsheet or above. Below are some useful farmers, 46 percent of which database software management tips for generating descriptive identified fruit and vegetable program (such as SAS, STATA, statistics by variable type, so that production as their primary or SPSS) with the respondents the statistical reports are easy commodity. in rows and the variables in to review and yield meaningful columns. It is good to give the information: • For interval or ratio variables variables descriptive names, like where differences between “Education” or “Sales Revenue,” • For nominal variables, where individual responses can be rather than non-descriptive labels there is no rank order among measured, you will most like “Question 4.” This will make responses, you will probably likely want to calculate the it easier and faster for you to find it most useful to calculate mean and median in order interpret results. frequencies or the volume to detect whether there are
29 For more information, visit www.crcworks.org/scfood.pdf. 54 55 any extreme outliers in the Bivariate Analysis • It is often useful to break sample. For example, if the Bivariate analyses are most often a complex concept into its variable is income and one used to answer questions about dimensions and indicators, household earns one million differences in responses among then to develop variables dollars per year, but five various segments of the survey to measure the presence or households each earn $20,000 population. By way of illustration, strength of the indicators. per year, the mean household bivariate analysis could be used to These variables form the basis income in this sample of six compare the means or frequencies of your data collection. households would be about of responses by men and women $183,000. Citing the mean when asked “how much did you • While representative samples statistic in this case would not spend at this farmers market?” may permit generalizing provide a very meaningful or a comparison of responses results to a larger population, measure of “average” among members of different convenience samples often household income in this racial or ethnic groups when provide useful information group. Reporting the range asked “how welcome did you from knowledgeable (highest and lowest values) as feel at this farmers market?” In stakeholders at a smaller cost well as the median might also general, you will want to compare in time and effort. be of interest. means when conducting bivariate • Qualitative methods, including analyses of ratio/interval variables, • For ordinal variables, where observations and interviews, and compare frequencies when provide a rich narrative of there is rank order among conducting bivariate analyses choice options, it is most a subject’s experiences and of ordinal or nominal variables. are often used to develop common to report either the Please note that many statistical frequency or mean. Reporting deeper understanding of an programs will calculate the unfamiliar topic. out both the frequency and statistical significance of the mean statistics can be helpful, difference in group responses • Quantitative methods often because neither format – i.e., whether the difference in use survey results and provide alone may fully uncover the group responses is due to true an account of prevalence existence of extreme outliers. variation in the data or is an and correlation of important accident of the sample. attributes in a larger sample. If you have research findings that can be coded geographically, you • Mixed method approaches, may wish to bring your dataset using both qualitative and to a Geographic Information Takeaways quantitative methods, System (GIS) specialist for complement each other well mapping purposes. Examining and can provide both depth your quantitative data against a • You may need to collect and breadth of understanding. geographic landscape can reveal primary data collection if connections between population no secondary data exist density, economic indicators, to answer your research and spatial characteristics question(s). Data collection that are otherwise difficult to and analysis require expertise discern, but can be very useful and can be in guiding programmatic and costly in time, policy decisions. A section of money, and module 4 shows some strong effort. examples of how geographic information can better inform your assessment.
54 55 56 57 Module 4 - Engaging Your Community Process with Data
Module 4 provides guidance reflect on the data gathered; • Letting the data speak: framing on how to reflect on the data characterize trends, changes, analysis that leverages key gathered, characterize trends and and sectors that warrant further findings, supporting improved changes, and determine sectors attention and exploration; and set prioritization, interventions, that warrant further attention. This the stage to analyze and interpret and outcomes; and module will help to set the stage results by engaging your project to analyze and interpret the more team and community on what they • Using implementation and in-depth results discussed in the hope to learn and act upon. feedback mechanisms for remaining modules. In this module more focused analysis. you will learn: The content of this module is appropriate at the stage of your • The key discussion points project when your team has: and data interpretation Developing a strategies to consider when • Defined its scope, specific Shared Project Team you reconvene the leadership goals and objectives, Mission Centered on team to discuss initial findings; timeframe, available resources, and regional Key Data Findings • Three common methods boundaries (module 1); to reduce your data into thematic findings of interest • Collected requisite primary Once you complete initial data to general audiences; and/or secondary data collection work in your community (module 2 for secondary data or project, it is an appropriate • How to engage your broader and module 3 for primary opportunity to re-engage and, community for assistance in data) ; and possibly, redirect your team’s identifying key food system efforts. It may be effective at trends and understanding • Progressed to examining, this juncture to reconvene the basic food system dynamics analyzing, and discussing leadership team of the project to based on initial data and those data findings that will peruse initial data and findings and findings; best help your community/ revisit these discussion points: region, illuminate the • Different avenues and condition and structure of • What have we learned so approaches for presenting its current food system, far? How do we interpret the your key findings to your and subsequently equip data we collected? This may community; and community members to include bringing in knowledge outside of the specific • Quick tips for enhancing the make well-informed, positive interventions. datasets (e.g., the collected substance of your project data shows evidence that results and anticipated This module will cover the select public health indicators economic impacts your have improved in a county project might have without following strategic approaches to data interpretation and analysis: and a team member knows undertaking the full scope about a specific initiative that of an economic impact • Developing a shared project anecdotally has been working analysis (as discussed in the team mission centered on key in the same area). How should subsequent modules). data findings; we begin to craft a story of the findings and prioritize Now that your team has • Engaging public support action steps? gathered the requisite primary through unique community and secondary data for your trends and indicators; assessment, you are ready to
56 57 • What have we discovered in the community that recommending, steps that will that we still don’t know or underscore the importance often require funding from understand? These can be of local food system change government and private funders. called information gaps, or and demonstrate that Having solid baseline data in data needs – places where both the assessment work hand allows your leadership team additional information corresponds with broader to identify: can help to tell a story and community interests and prioritize action steps also has immediate practical • How money flows through implications. your community; • To which ongoing activities may this study give • Which assets you have that The most important use of your need to be protected; momentum? These are data is to help your internal team activities starting up or understand what’s happening • Where additional investment occurring in the community in your community, particularly might provide the biggest that demonstrate the if your community exhibits any bang for the buck (in terms of importance of a transitioning exceptional characteristics (e.g., job creation, improved farm food system. Is it too late well above-average dollars spent viability, etc); to directly integrate those on food away from home, high innovations in the study? share of land in specialty crops). • The key issues your community confronts; and • From which ongoing It will help you craft a narrative activities can this study that includes hard numbers and • Which actions can be expected gather momentum? These provides sound justifications to make a lasting difference? are activities occurring for the action steps you are Research findings may also help you identify places where the prevailing wisdom is inadequate. Often, groups of people make decisions based on what all can agree upon quickly, since time is such a valuable and precious commodity. In such cases, it is tempting for groups to take action based on assumptions, thinking habits, or an overly simplistic assessment of the issue just to get things moving. For example, a community may believe that investment in a local slaughterhouse would improve the viability of the local beef industry. By putting numbers on paper and gathering information about the number of local animals available for slaughter, the community may realize that the scale of a facility that could be supported Cafeteria staff prepare new school lunch menu by current farm production items at the Yorkshire would result in high processing Elementary School in costs that a local market could Manassas, VA. not cover. Pursuing this type
58 59 of intervention could actually implementation of your project discussions of next steps and worsen the cost-competitiveness proceeds, your team members can directions for the food system. For of the region. Similarly, your reflect together over time on how instance, the discovery that the community might believe that conditions are changing in your share of land in food production adding a farmers market will food system, if at all, and whether for your county has declined by 20 increase farm viability, but after these changes indicate that percent, and that zoning prohibits looking at a USDA AMS study progress has been made toward direct agricultural sales on lands in which competition zones for the changes you envisioned. zoned as farms, may trigger a customers and vendors at farmers discussion about allowing more markets are mapped,30 you may economic activities on farm land. realize there is already too much Or, once a community sees the competition in your region. This Data Analysis and positive change in health outcomes may trigger a discussion of how to Interpretation: Letting for a community that adopted increase the attendance or vendor the Data Speak Farm-to-School programs, they capacity at existing markets. By may choose to invest more broadly introducing solid economic data in such programs. or trends, the team may think As you can see from modules more critically and test their 2 and 3, data are increasingly Three common methods to reduce assumptions. available everywhere, so figuring data into thematic findings of out how to prioritize the data and interest to general audiences Critically examining your findings you collected and craft include: assumptions and biases against them into a meaningful story is available data can help you see: not easy. Community meetings 1. Trends in food industry where preliminary findings are indicators such as land use, • Whether the relationships presented can be an ideal place consumer buying habits, diet- or conditions you perceive to solicit feedback on particular related health indicators, and really exist. Quantitative areas of interest or importance. market channel sales. data can form the basis for a This step can save time and further a. Secondary data can be very potential explanation, but the investigation can be minimized useful for these exercises qualitative data will help to if findings on some issues are of since many of those determine how well it holds minimal interest to community sources have been available up given your community’s stakeholders. Sharing of data for decades. perceptions and experiences; is another strategy to keep key influential partners engaged in • Reason(s) behind existing data b. Although two points in the work and show your team is relationships; and time may be of interest, a making progress. It provides an graphic showing change • Emerging conditions and/or opportunity to keep people at over many years may new trends. the table until you are ready to spur more discussions of implement programs or policies. important milestones. As your group works together more effectively, you will gain Once you prioritize a focus on 2. Comparative analysis showing increasingly potent insights on data, there will likely be requests how the community or region local conditions and the types for tables, graphics, and analysis of interest compares to of interventions that are likely that can be quickly and easily adjacent regions, the State, or to yield positive community interpreted by the broader the U.S. as a whole. benefits. By regularly collecting community. These tools will feedback and follow-up data as the allow them to catalyze further
30 Lohr, L.; Diamond, A.; Dicken, C. and Marquardt, D. 2011. Mapping Competition Zones for Vendors and Customers in U.S. Farmers Markets. USDA Agricultural Marketing Service. http://apps.ams.usda.gov/MarketingPublicationSearch/Reports/stelprdc5094336.pdf 58 59 Case Study: Strengthening Buffalo’s Food System31 This colorful synthesis of data displayed in figure 4.1, prepared by the University of Buffalo’s Food Systems Planning and Healthy Communities Lab (2013), provides a visually appealing display of several important pieces of information.32
Figure 4.1: Healthy Food Access in Buffalo33
Source: University of Buffalo
By overlaying a Geographical Information Systems (GIS) map displaying the percent of households with no vehicles and the location of healthy food retail stores (including a ¼ mile access area), the communities without easy access to healthy product become readily apparent. This indicator also helps to measure progress on an indicator identified by an external source, the U.S. Department of Health and Human Services’ Healthy People 2020 goal of increasing the proportion of people with access to a food retail outlet that sells foods included in “Dietary Guidelines for Americans.” Further, this report does an excellent job in making the data definitions, data source, baseline, and goals easily available and understood across a wide variety of indicators. By presenting information in this easy-to-access approach, it builds community support for specific interventions, getting stakeholders quickly onto the same page.
31 For more information, visit http://foodsystemsplanning.ap.buffalo.edu/. 32 Delgado, Cristina, Travis Norton, and Samina Raja. 2013. Indicators for a Healthy Food and Built Environment in the City of Buffalo. Healthy Kids-Healthy Communities-Buffalo partnership and the Food Systems Planning and Healthy Communities Lab, University at Buffalo. 20 p. 33 “Indicators for a Healthy Food and Built Environment in the City of Buffalo: Where We Are and Where We Need To Go. Policy Brief #8.” Indicator Toolkit. October 2013. Food Systems Planning and Healthy Communities Lab. University of Buffalo. See http:// foodsystemsplanning.ap.buffalo.edu/wp-content/uploads/2013/10/1.HKHCPolicyBrief8__FINAL10-8-13WEB1.pdf (p. 15) 60 61 a. This serves as almost discussions, especially if long- places or points in time by a benchmark for the held beliefs are not verified using bold fonts, superscripts, community and leadership with statistics. For example, or other designations. That team, and may lead to perhaps the data will show will also help key findings discussions of other regions that farmers market sales in a stand out among tables and/ to emulate as a goal. county have increased at the or pages of many numbers same time that expenditures that may otherwise seem b. Simple column graphs on dairy products and tedious the audience. may be the most visually fruits and vegetables have striking way to present increased. Showing those Some of the data-related issues data because they show trends at two points in time that you may wish to reflect on whether the region of on the same graph may draw with your leadership team before interest is higher or lower interest from those interested writing up a report, determining in an indicator of interest, in both those issues. action steps, and presenting any and, for the broader findings to the community are: public, shows the degree of difference more clearly • Did your data results – or the than a list of numbers in Some Words of distribution of your data — a table. Caution at This Stage reveal any particular strengths or weaknesses in your c. Compare your community of Your Process: methodological approach? If to other communities the data do not seem realistic using cluster mapping, a or appropriate, it may be due technique in which you • Work with your research to the collection methods you map regional concentration advisers to make sure that used. In future endeavors, you of related industries in a you interpret your findings can adapt your methods to particular location. More carefully. One common collect better data, but details can be found in the mistake is to confuse for now, you may have to next section. correlation with causality: just adjust your data analysis to because two developments d. Demonstrate your focus on the most reliable happened within a similar pieces collected. comparative advantage time frame does not mean using a location quotient, a that one caused the other. • Can you identify the potential technique used to compare for increased linkages across the industrial activity levels Not every difference in the resources, infrastructure, among different areas measurement represents and segments of your food of the country. More a significant difference – system? details can be found in the i.e., a difference between next section. two groups that cannot be • What opportunities or threats explained by chance alone. in your local food system did 3. After a bit of brainstorming you uncover as the results of on relationships of interest For example, is it really significant to your community your initial research? Does across the food system, it that warrant redirecting your may be valuable to do some that 23 percent of the population is food insecure initial plans for more in-depth cross-theme analysis to begin analysis? Community action? showing linkages. Beginning (compared to 24 percent at to share these linkages (that the state level)? It may be may be beliefs but not yet most effective to highlight evaluated with data) should those findings that are catalyze some interesting significantly different (using statistical tests) from different
60 61 U.S. Cluster Mapping Website34 Cluster Mapping and One of the best sources for data on clusters is the U.S. Cluster Location Quotients Mapping website, a national initiative of the U.S. Economic Development Administration and Harvard Business School that Cluster mapping and location provides open data on regional clusters and economies to support quotients are two techniques U.S. businesses, innovation, and policy. The website distinguishes often used to compare economic between two types of clusters: traded clusters, groups of related characteristics of regions. A industries that serve markets beyond the region in which they are cluster is a concentration of located, and local clusters, which consist of industries that serve related industries in a particluar local markets. The former would include key base industries like area, and includes the companies agricultural production, fishing, environmental services, and food in the industry as well as those processing, while the latter includes local food and beverage and who support the industry, such retail activities. as suppliers, service providers, and government agencies. Two In figures 4.2 and 4.3 that follow, you can see the example of a sectors that may be the most economic area cluster map for food processing (from the traded visually interesting to map are food cluster) and food and beverage (from the local cluster), illustrating processing and manufacturing and establishment growth rates in these clusters. The differentiated agricultural inputs and services. colors, explained in the legend at the top right of each map, are In conducting a cluster mapping representative of how relatively well or poorly the cluster is doing for exercise, your team is looking to establishment growth relative to peer regional clusters. Note, there see if there are large groupings or are numerous indicators that can be mapped across these clusters. agglomerations of a certain type of So an assessment could focus on geographic comparisons of the food enterprise. Agglomerations of region compared to the U.S., compare how one of the agricultural organic and natural foods, seed or and food sectors compares to another cluster industry, or evaluate feed, and processing plants, how different indicators (jobs vs. firms vs. wage growth) compare in for example, would suggest a the regional cluster itself. clear opportunity to further leverage growth in that industry through policy or business incentive programs.
Location quotients are ratios that allow your team to compare the concentration of a resource or activity specified in your study to that of a larger area, such as your State or Nation as a whole. A comparison of location quotients can help to identify industry sectors of opportunity to deepen the contributions of the food system to the broader economy. It is a common goal of local food initiatives to increase the location quotient for food industry sectors. Returning to the example of organic and natural foods above, a goal for a region may be to 34 For more information, visit http://www. increase their location quotient by clustermapping.us/.
62 63 Figure 4.2 Establishments Growth Rate in Food Cluster by Economic Area, 1998-201235
Source: U.S. Cluster Mapping Project
Figure 4.3: Establishments Growth Rate in Local Food and Beverage Cluster by Economic Area, 1998-201236
Source: U.S. Cluster Mapping Project
35 For more information, visit http://www.clustermapping.us/. 36 Ibid. 62 63 connecting local grain growers with assistance of community members findings that community organic feed suppliers or organic in identifying the key trends and members find surprising, non- bakeries to assure that local inputs understanding the basic dynamics credible, or curious enough to and ingredients are used whenever of the local community. These inspire debate. possible, and that any coordination community-based discussions that may be needed to spur – and community members’ Most civic leaders and engaged those business relationships is a challenges to what you share – can community members are priority. The U.S. Department of help you understand which efforts motivated by a good concise Labor’s Bureau of Labor Statistics are likely to be more practical, and story with emotional impact. (BLS) provides a easy-to-use which might encounter greater The combination of data and a location quotient calculator that resistance. To facilitate that good story line is very persuasive. can be used to benchmark your discussion, it may be appropriate Therefore, it is highly useful to community to a national average to share the following results look for ways of having a visceral (or other regions you have chosen from the earlier phases of the impact on your audience in an to compare against.37) assessment: honest manner, simplifying the elements of the story enough • Summarize what was learned to communicate major points through the initial data with ease, but making sure to Engaging Public Support gathering process, including accurately portray (perhaps with Through Unique those findings that were visual aids) the actual complexity unexpected or unique to the Community Trends of food system and supply chain community (compared to the relationships as well as the and Indicators rest of the State or nation) conditions on the ground. • Demonstrate the relevance Perhaps the “anchor” activity of of local food system issues One way to accomplish this goal is the assessment discussion at this to the community by to showcase the most important stage will be the point where data, showcasing relevant activities takeaway observations from trends, maps, case studies, and and programs and showing your research and analysis— emerging efforts in the community how they relate to already- for example, one to five really are analyzed, shared, and identified stakeholder and important things that you learned. discussed. Module 1 highlighted community priorities. This Use these lessons as the focal several ways to organize this will help to engage local point of your story, beginning with discovery (through elements stakeholders who see their your original research goals and of the food system, network “interests” represented in initial expectations, the research relationships, key issues areas, early phases of the work methods you used, the results etc.), but in most cases, it will of your data analysis, and finally, quickly become evident through • Identify those pieces of the apparent implications of your group discussion where various information about the local research results. Walk the reader activities and issues overlap and food system that are clearly through the process with enough bridge to and from one another. important, but were unable to detail so they understand – and be gathered during previous could largely imitate –the study Nevertheless, the results of efforts, and see if community you conducted. Emphasize the your data will seldom point to members can help contribute key lessons and how you will use specific targets, action steps, and more data; and them, putting less emphasis on information (questions, methods, outcomes without integrating a • Identify short-term actions you broader group of motivated local and results) that did not really could take to strengthen the yield any useful information. Be stakeholders. At this stage, it is accuracy of the assessment often helpful to directly engage the positive and optimistic, yet careful going forward if there are to be truthful about limitations.
37 Location Quotient Calculator, Bureau of Labor Statistics http://www.bls.gov/cew/cewlq.htm. 64 65 Case Study: Northern Colorado Regional Food Systems Assessment38 In a recent Northern Colorado food assessment, one key graphic combined some data from different elements of the food system to create a compelling story around interventions, as well as compare counties in the region to illustrate regional dynamics39. This was particularly interesting because LiveWell Colorado, a significant public health nonprofit that collaborated in the assessment, had previously invested in one county with troubling health indicators (Weld).
Since the assessment took place mid-way through their Weld County initiative, the Figure 4.4: Percent of Individuals Who Ate 5 or More team had the ideas to cross-analyze specific Servings of Fruits and Vegetables findings related to consumers’ stated eating behavior and public health indicators in the region. As depicted in figure 4.4, significant differences in consumption patterns were seen across the counties being targeted in the study. Yet no county’s share of individuals who ate five or more servings of fruit and vegetables was above 50%. This finding was surprising to the community members of the assessment team, given that Colorado is considered a relatively healthy State, ranking 8th in the Nation in terms of overall health measures and lowest in terms of obesity prevalence.40 Despite having the lowest average share of residents reporting consumption of five or more servings of fruit
and vegetables/day, Weld County was the Source: Northern Colorado Food Assessment only county in the targeted region that saw a consistent and significant increase in the share of individuals who consumed five or more servings per day of fruit and vegetables.
Table 4.1: Comparing Health Metrics from the Northern CO Food System Assessment* Overweight, BMI* Diagnosed with Diabetes Obese, BMI* > 30 25.0 to 29.9 Change from Change from Change from 2007-2008 2003-2004 to 2007-2008 2003-2004 to 2007-2008 2003-2004 to 2007-2008 2007-2008 2007-2008 Boulder 3.0% -0.7% 35.1% 7.3% 14.4% 3.4% Colorado 5.3% 0.8% 36.3% 0.2% 19.4% 2.8% Larimer 4.6% 1.3% 35.2% -0.5% 17.1% 5.0% Weld 5.5% 1.3% 36.5% -5.2% 24.0% -0.3% Source: Northern Colorado Food Assessment *Note: Body Mass Index (BMI) is defined as weight in kilograms divided by height in meters squared (w/h**2).
38 For more information, visit http://www.larimer.org/foodassessment/. 39 Ibid. 40 For more information, visit http://www.americashealthrankings.org/CO. 64 65 After discussion with community stakeholders, there was • A local database is a long- interest in exploring whether investments by LiveWell Colorado term commitment, and if to increase access to produce (one reason there may have been not maintained, may reflect this reported increase) also had some health outcomes. Table poorly on your project once 4.1 shows diabetes rates across the same three counties were the “age” of the data (if not stable or increasing, but that Weld County showed improvement updated) becomes a concern. in a more short-run indicator of moderate obesity. Although extreme obesity was still significantly greater than the region and • The expense and maintenance Colorado, even its rate of growth had flattened. The discussions of these dissemination focused on how the region could proceed to develop market platforms can be substantial, relationships and programs that assured that those increased particularly if there is not a servings of fruits and vegetables were more likely to be sourced clear institutional home or from the many producers growing and redirecting to regional community partner. markets in Weld and surrounding counties. Implementation and Feedback Mechanisms for More Focused Analysis Steps
with community members by Even if your resources do not Presenting your posting your database or blog allow you to hire an independent on an electronic portal, inviting consultant to perform an economic Findings to Community comments and feedback, and impact assessment, you still have Stakeholders responding to posted comments the option of generating some from the general public. Depending broad estimates of economic impact that may help persuade For a broader public audience, on the issue and the interests of your audience, these resources municipal officials to invest in many assessment teams compile implementing some of your a four-page summary of key may consist of lists of farms and food businesses, more detailed team’s recommendations. Posted findings with compelling photos below are some quick tips for and graphics, and hand it out to statistical tables, or additional tailored fact sheets about a specific enhancing the substance of your constituents. Here, an attractive communication to the public about format is essential. topic. Computerized databases have the additional benefit of project results and anticipated becoming the “go to” place to economic impacts your project In addition, you may also want to might have. publish issue-specific summaries turn for a solid understanding of that run from 5 to 20 pages. These local conditions. One example may be visually appealing, or of such an effort is the Maryland A Simple Revenue Calculation they may focus on tables of data, Food System map housed at One very simple calculation that depending on the issue and the Johns Hopkins (see module 2 for many previous local food system audience. One example would be a additional information about this assessments have used involves fact sheet for local decision-makers case study). This visualization determining how much local farm illustrating the potential benefits of a region can give your food revenue would increase if every and drawbacks of investing in a initiative considerable power. The local resident purchased more produce aggregation business. concise and accurate analysis of local conditions, reinforced by locally produced food. These studies make the assumption that In addition to the publicity time series data, can help you gain if every household in the study methods discussed above, greater presence because of your area increased its purchases of you can also seek broader and analytical strength. However, we locally grown farm products by more interactive engagement offer a couple of words of caution: $5/week, it would generate an additional x amount in local farm revenue.
66 67 However, this type of simple Analyzing social networks also The construction of these network revenue calculation suffers from provides local practitioners a charts, typically with the aid of a a number of deficiencies and very visceral way of viewing the computer, allows researchers to should be employed with caution. interactions between diverse determine network structure. The Perhaps most importantly, this sectors of the food system — number of connections a node type of simple calculation does not which are not as separate as any has and the types and/or qualities take into account the concept of diagram indicates, and, in fact, of those connections largely opportunity cost – i.e., the cost of coordinate with each other daily. determine this structure. Initial an alternative that must be forgone One Massachusetts community work on commercial networks due to the additional purchases of food processing facility, for suggests that there are three main locally grown food. For example, if example, works with school forms of commercial collaboration consumers now spend less money districts and chefs to create that might best lend themselves at grocery stores and more money quick-frozen, processed, and to measurement: information at the farm gate, there may be ready-to-heat produce items that sharing, economic exchanges, and positive farm-level impacts, but make it easier to bring local food lending advice and support. negative impacts to local grocers onto school menus.41 Similarly, a – also important local businesses/ restaurant or food manufacturer To illustrate, researchers at the employers. The following module, might feature a certain food on the University of Vermont used module 6, is devoted to a more menu because several farms grow Ucinet, a social network analysis in-depth discussion of how to the required product nearby, and software,43 to collect and analyze employ economic multipliers and this food might become a regional the information exchange structure opportunity cost concepts in your specialty over time. As another within local food networks in local food assessment. example, Jeni’s, an Ohio ice cream Vermont. Their goal was to maker, coordinates with several support improved coordination Social and Commercial farms to create a buttermilk, sweet among these organizations by corn, and blueberry ice cream understanding how information- Network Analysis made largely with local products.42 sharing occurs. A major benefit Another useful tool for data of social network analysis is that analysis and interpretation is Network analysis is one way to it focuses on the patterning of social and commercial network represent how such connections relationships among actors in the analysis. Only through commercial have been formed, and how strong network, unlike a multivariate and social connections can the connections are. The primary analysis that focuses on a single money recycle within a given components of network analysis actor (either an individual community. For example, only if are linkages and nodes, where or organization). Through local shoppers are committed to nodes represent individual people understanding communication purchasing locally — especially or entities (such as a business or among networks, relevant if local prices should rise higher a web site), and linkages are the organizations can coordinate with than broader market prices — will relationships between any two each other more efficiently, and local farms and food businesses nodes. Focusing on nodes, how management or organization earn sustained revenue through they are connected to each other, leadership can use their time and changing economic conditions. and the relative strength of those resources more efficiently.44 connections gives rise to network charts where points represent nodes, and lines represent linkages.
41 For more information, visit http://www.fccdc.org/about-the-center/21-food-processing/44-farm-to-institution-project. 42 For more information, visit https://jenis.com/. 43 Analytic Technologies, Social Network Analysis Software. Available for free download: www.analytictech.com/ 44 For more information, see: Sun, T., & Kolodinsky, J. (2013). “Information exchange network of local food promoters in Vermont: A social network analysis.” Proceedings of Shanghai International Conference on Social Sciences. July, 2013. ISBN: 978-986-87417-2-0; ISSN: 2304-2540. 66 67 Though beyond the scope of This stage may be a key • As you build greater public this Toolkit, which is focused on phase to frame programming, awareness of your local shorter term economic impact investments, and projects food assessment work, you assessments, analyzing these that are focused enough will likely attract greater social networks can provide to warrant more rigorous attention and support from insight into longer term economic assessment. key stakeholders in your impacts that may result from community or region. This local and regional food system • Presentation materials should phase of your assessment may activity. For example, improved be attractive and easily be the first time you want to exchange of information and ideas understood. It may even help consider how the planning may facilitate opportunities for to “brand” the assessment process and community entrepreneurship (for example, effort on all handouts, posters, discussions will continue collaboration on a food hub and other materials. To be beyond the assessment stage. – a local foods aggregation or most effective in engaging distribution business that works the community, use multiple to support multiple local food communication channels, farms/businesses) or improved including a webpage, social businesses efficiency. media, public meetings, open houses, and presentations at The main limitation of network food system-related venues analysis appears to be that and events. compiling such a network analysis requires a great deal of trust in the researcher and exceptional transparency, because these data represent a fairly potent view of local foods activity and could be used for other purposes than intended by someone who violates the public trust.
Takeaways
• One of the primary benefits of conducting a food system assessment is the engagement and awareness that may emerge as the study is framed, data are compiled, and unique aspects of the region emerge from initial analysis. • “Reducing” the data into visually engaging figures, tables, and graphics, may help the project team and the broader community to better understand and connect how different elements of the system influence one another. 68 69 Module 5: Analyzing the Linkages and Contribution of Local Foods to Local Economies through Input-Output Analysis
Module 5 begins the more • Involved a technical expert Before we embark on discussing technical portion of this Toolkit, who has a thorough the development of economic and is meant for team members understanding of the multipliers in detail, we must with more advanced economic terminology and limitations clarify our use of common training. This module discusses of I-O models and advanced economic terms to ensure how to estimate the linkages and training on conducting an that we clearly understand the economic impacts of local and economic impact assessment. implications of our analysis. regional foods systems in local Economic impact studies are Often when we think about how economies through input-output complex, and expertise is local foods contribute to the (I-0) analysis. The module also a necessary component to local economy, three words are provides a brief background on obtain accurate results. used interchangeably: impact, economic impact concepts. In this growth and development. For module you will learn: The challenge of quantifying example, the promotion of local the potential value of local foods is said to have a positive • How to conceptualize the foods production to a regional impact on the local economy, or changes that may be occurring economy occurs mainly because stimulate economic growth, or in your study area; of the complexity of linkages that foster economic development. • Basic community economics typically exist in a community or Within the discipline of community development concepts; regionally based food system. economic development, however, Aside from the multitude of these three words have very • The basic terminology and supply chain relationships that different and unique meanings, uses of I-O models; exist between food producers requiring different methods of and consumers, there are a host analysis. The tendency to use • The content and definitions of of additional linkages that exist them interchangeably can lead to industrial multipliers; between food producers and other confusion and erroneous policy • The limits to I-O analysis. sectors of the local economy. For insights. Consequently, we begin example, local grain farmers may this discussion with a definition The content of this module is sell their output to local livestock of each term and its particular appropriate at the stage of your producers for use as animal feed, meaning with a community project when your team has: or local produce farmers may sell planning context. their merchandise to small-scale • Defined its scope, specific food processors, who, in turn sell Growth is generally regarded goals and objectives, their value-added food products as a dynamic concept that timeframe, available in local markets. Fortunately, we looks at change over a period resources, and regional are able to measure the extent of time. Growth is synonymous boundaries (module 1); of these complex intra-regional with expansion; for example, linkages using I-O analysis to more jobs, more people, more • Collected requisite primary generate economic multipliers. businesses, or more income. and/or secondary data An economic multiplier is a In contrast, development is (module 2 for secondary data single number that captures the related to improvement relative and module 3 for primary economy-wide circulation of to some starting condition; in data); activity from an initial financial other words, sustained progress • Begun to examine, analyze, transaction. toward a particular goal. This and discuss those preliminary could be movement toward findings with your community a more sustainable use of (module 4); and resources, enhancing the quality
68 69 of life within the community, or creating an environment that is conducive to entrepreneurial activity. Growth is relatively easy to measure, whereas development is more nebulous, not only as a concept, but when attempting to document it. Accordingly, there is an unfortunate tendency to substitute economic growth measures as sufficient indicators of desirable regional development without considering how the community at large shares the benefits of growth, identifying potential winners and losers, and subsequently, evaluating whether the benefits accrued by winners offset or are acceptable given implications or welfare losses expected for some stakeholders in a region. Commercial shared-use kitchen located at Basil Doc’s Pizza in In contrast, the term “impact” Denver, CO, October 2015. tends to be associated with a specific event or change in behavior and can either be static or in terms of dynamic in nature. In this Toolkit, event or change what they and in the majority of economic in behavior. This is measure, and how impact models, we are considering often referred to as a they subsequently an event or change in behavior shock. The difference in influence programs and that is static in nature – meaning economic activity that occurred policy. For example, you might that it takes place once, at a given prior to and after the event or ask if promoting local foods and point in time. To model a dynamic change in behavior is referred to as the institutions that support activity, one that is characterized the economic impact. For example, local foods, a development by constant change, necessitates a business within the community concept, might better position a much more complex model that makes a major investment and the community to grow and is outside the scope of this Toolkit. hires 50 new workers, or the prosper. Please note that this Similarly, we are not providing the Federal government provides is a far different question than tools here to evaluate potential a grant to encourage the asking what the impact on the ancillary benefits of local food development of economy would be if residents systems, which may include a food hub. That event or change shifted their spending away from generating local entrepreneurs and will have an impact on the agricultural goods imported into local social capital and reducing local community and impact the community toward agricultural local obesity rates. assessment is aimed at quantifying goods that are produced in that change. the community. This change in Impact assessment is generally behavior might reflect a shift defined as comparing and Within the context of studying the in consumer spending from a contrasting what a community local or regional food economy, the “conventional” (i.e., likely very (usually its economy) looks like terms “growth”, “development”, little local sourcing) grocery store before and after a particular and “impact” are quite distinct
70 71 to a farmers market – a shift that Import substitution policies are has a specific and measurable Local Foods and Economic attractive to local food system impact on the local economy. Impact Assessment advocates based on the belief Documenting “success” or that the creation of stronger “impact” is fairly straightforward community food linkages will when it involves evaluating the One way to think about and support the broader development results of a single firm moving document the impact of local food of allied manufacturing and into a community (e.g., x number system expansion is within the business service sectors. As of jobs were created), whereas framework of import substitution. with many “new” economic documenting the success or impact By promoting the purchase and ideas, the notion of focusing on of building stronger networks that consumption of local foods, import substitution as a strategy enhance collaborative activity is we are, in one way, trying to for promoting growth in local more challenging because the substitute local food production economic activity is not a new measurable impact is more subtle. for foods that are imported into concept. Indeed, the “Buy Oregon” the community from other parts of and “Buy Chicago” and other “buy Consider, for example, the difficulty the U.S. or the world. Substituting local” programs date back to the of measuring the impact of such locally produced commodities for 1920s, and although likely focused local food system interventions as: imported items forges stronger on a broader set of consumable regional linkages. In a food import goods, suggest some economic • Helping an existing community situation, the commodity purchase development professionals supported agriculture (CSA) compensates the grocer, and view loyal denizens as one business avoid bankruptcy; perhaps a regional distributor, potential opportunity to maintain before the bulk of that dollar exits • Forming a private-public community based businesses. In the local economy to pay the partnership to facilitate the the current local foods context, original producers. opening of a permanent there is evidence that this civic food market site for multiple pride expands to include buyer In contrast, as some of the asset vendors; interest in land use, maintaining mapping exercises or community family farms, quality, and public • Building networks that are discussions guided by earlier health dimensions.45 vital to facilitating meaningful modules may discover, a local local food agglomerations foods purchase might allow a Our purpose in drafting a module (sometimes called clusters); or greater number of local supply focused on illustrating methods chain participants to benefit for analyzing the economic • Promoting better access to financially from the transaction. impact of local food systems fresh vegetables as a means Not only are intermediate sellers is to help you and your team of improving public health in the local community (such as a adequately account for the standards. grocer or a farm market vendor) impacts of local foods expansion compensated, but a much larger and promotion. As our earlier Since more localized, typically fraction of the purchase price is examples demonstrate, if local smaller-scale initiatives do not typically available to compensate foods production and consumption lend themselves to generating a local producer and, possibly, increase, there are economy- immediate job growth or large other locally based distributors wide consequences. Therefore, sales gains, we are left with the or processors. In this manner, best-practice measurement of question: how does one best stronger linkages are forged within those consequences can help document the success or impact the local economy, reducing inform local producers, local of these efforts on the local the volume of consumer food policymakers, area consumers, community? This is the primary expenditures that leak out of the and other interested parties about issue we will explore throughout local economy. the rest of this module.
45 For more detail on such efforts, see Persky, J., D. Ranney and W. Wiewel. 1993. “Import Substitution and Local Economic Development,” Economic Development Quarterly, 7(1): 18-29. 70 71 the potential economic gains in Figure 5.1: Simple Multiplier Illustration a region from local and regional food system initiatives or policy changes.
Linkages, Leakages, and Multipliers
Let’s assume there is an additional dollar of local food sales. This additional dollar could result from a local resident electing to purchase local foods, a tourist buying food at the local farmers market, or a local farmer supplying goods to a farmers market outside their own community. At its core, that increased dollar in local food sales volume represents additional money going to the How much the retailer retains utility company pays 24 cents to farmer, which, in turn, represents is tied to the margin or mark-up companies outside the community the direct impact component of the retailer places on the piece that produce the electricity. This I-O modeling. What happens to of equipment. Let’s assume that payment represents a leakage of this additional dollar of sales is a retailer marked up an item by 24 cents. illustrated in figure 5.1 entitled 40 percent, which means that 60 “A Simple Multiplier Illustration.” percent of that dollar leaves the Suppose further that the utility area and goes to the manufacturer company uses the remaining 16 The farmer has many options of that input or piece of equipment cents to pay some of their labor about what to do with that if it is not sourced from a local costs, referred to as induced additional dollar of new local food business. That represents a impacts in I-O modeling. These sales. Suppose that the farmer leakage of 60 cents per dollar (as 16 cents now represent income elects to use that dollar to buy shown in the above figure). The to utility company workers who, some additional equipment from question that remains is, “what in turn, may elect to spend it in a local retailer. What happens to will the retailer do with the 40 the local economy. Let’s assume that additional dollar which is now cents that is retained in the local that the utility worker spends that in the hands of the equipment economy?” Suppose, again for 16 cents at a local movie theater, retailer? In reality, the retailer the sake of discussion, that the which constitutes 16 cents of cannot hold onto the entire dollar retailer uses those 40 cents to pay revenue going to the movie house, because he/she must pay to the electric bill. Those 40 cents and that 10 cents of that 16 cents replace his/her inventory (inputs, now represent sales or revenue goes to pay movie rental fees, feed, and equipment) that the to the local electric company. The and is sent to Hollywood. This farmer just purchased, also called utility company must, in turn, transaction would then represent indirect impacts in the context of pay for electricity coming from a leakage of 10 cents out of the I-O modeling. the grid. In this example, the economy. This process of re-
72 73 spending and leakages continues growth or development. Rather, until that entire initial dollar of it is aimed at assessing economic Producing Reliable Local sales to the local farmer leaks out impact; i.e., this is what the Foods Impact Estimates of the economy.46 economy looks like before the event or policy change, and this is The value of the multiplier in what the economy looks like after Most analysts use some type this example is 1.66, calculated the event or policy change. of I-O model to generate sets as the direct + the indirect + the of economic multipliers to be induced effects. In other words, One of the challenges in using applied to local foods production, the multiplier includes the value multiplier analysis to examine processing, distribution, and of the initial $1 going to the the impact of a change in local sales. There are several types of farmer plus the sum total of local foods activity is determining multiplier-generating services or expenditures that resulted from what the value of the multiplier systems, but the lion’s share of the initial transaction; i.e., the 40 is, or, more directly, obtaining analysts rely upon an economic cents retained by the retailer, the an appropriate multiplier. As will impact modeling software called 16 cents retained by the utility be discussed in greater detail in IMPact Analysis for PLANning company, the 6 cents by the movie module 7, there is no “local foods” (IMPLAN) because of its ease theater, and so on. For every dollar sector in I-O modeling software. of operation as well as the fact of new local food sales revenue On the contrary, the data feature that its industrial accounts and earned by the farmer, the total large industrial categories that assumptions are easily modified.47 impact on the local economy is aggregate production by related It is also possible for analysts estimated to be $1.66, i.e., the commodity type such as grain to use multipliers or services initial $1 expenditure and an crops, oilseed crops, vegetable generated by the U.S. Bureau of additional 66 cents based on the and melon crops, fruit farming, Economic Analysis (BEA) through calculated economic multiplier and different major categories of its RIMS II services, or from other effect within the local supply animal production. Consequently, I-O program or service vendors chain sectors. the default multipliers in the such as Economic Modeling modeling software reflect Specialists, Inc. (EMSI). Using the notion of the the averages for the region of economic multiplier, we can analysis, whether it is a county better understand how building or a State, which means the local supply chains or networks resulting multipliers are reflective The Structure of Input- constitute a form of import of the average farm within those Output Models substitution. Re-localizing categories. However, producers agricultural transactions and of locally marketed foods are I-O models track the flow of reinforcing local food supply chains likely to have very different supply transactions between local and networks leads to a reduction chain relationships, than, say, a industries, sales by industries to in the volume of money that leaks local, industrial-scale vegetable households, and sales to other out of the local economy, and producer selling directly to food “final users” of goods or services, thereby enhances the impact of manufacturers. Accordingly, one including regional exports new or redirected local food sales has to modify modeling systems to (domestic and international). I-O on the local economy. Note that more adequately convey models also track industries’ uses this analytic framework is not the economic worth of local of labor and capital inputs and of really directly related to economic food enterprises. regional imports (once again, both
46 Normally I-O analysis considers the full array of transactions between the farmer, suppliers and employees, not just the single examples illustrated here for the purpose of clarity. 47 A more complete description of IMPLAN is contained in the next subsection.
72 73 Case Study: I-O Models Broadly, I-O models are built around a complete table of industrial and other transactions in an economy of scrutiny. This table, called a social accounting matrix (SAM), documents the buying and selling amounts among industries, households, and the rest or the world. I-O models allow analysts to understand the critical components of production in specific industrial types, and, once processed econometrically, they produce tables of multipliers for all industries that are contained in the model. As one example of a three-sector model for Wisconsin local foods48 shown in table 5.1, the I-O model was first generally represented as a way to show connections between supply chain sales, purchases, and total outlays:
Table 5.1: Numerical SAM for a three-sector economy Industry Purchases Consumption Exports Output A B C (C) (I+G+E) A 1 2 1 5 10 19 Industry B 2 1 2 3 14 22 Sales C 1 1 1 6 7 16
Income 7 9 5 2 23 Imports 8 9 7 9 33 Outlays 19 22 16 23 33 57 Source: Watson et al. (2015).
As this example shows, I-O models are not just “impact” tools. They provide a useful framework for understanding regional industrial structures, mutual linkages and inter-dependencies, and the overall nature of regional productivity. I-O models, however, have limits to their use and interpretation. For example, these are fixed price models that assume perfectly elastic labor and commodity supplies; this is not, in the longer run, how many economies perform since agents are constantly revisiting management choices. domestic and international). The The multipliers for each industry region, so too will its demand for current version of the IMPLAN are generated with the assumption regionally supplied inputs into food modeling system contains 536 that there is a constant, or fixed, production. This is a reasonable industrial sectors, including 14 relationship among industries such assumption for small changes in agricultural sectors. Every industry that if production in one industry output, but might be harder to in the modeling system can have doubles, so too will its demands defend as changes become larger. a transactional relationship with for inputs. Accordingly, if local One of the challenges is that in every other industry. foods production doubles in a general, as businesses become
48 Philip Watson, David Kay, Gregory Alward, Stephen Cooke and Alfonso Morales. 2015. “Evaluating the Extent and Economic Contributions of a Local Food System through an Import Substitution Framework.” Working draft of report for Wisconsin Department of Agriculture.
74 75 larger, they require a different mix Table 5.2: Expanded SAM of inputs to produce outputs. In many cases, this is due to the fact that they are trading a reliance on labor for technology (e.g., automated irrigation systems). I-O models would not capture these technological changes without modifications. Additionally, price changes are not captured within I-O models. I-O models of this type are called fixed-price models. These are two of the major shortcoming of I-O models, but as long as the change being modeled is small relative to the economy as a whole, this assumption can Source: Shaffer, Deller & Marcouiler (2004). be justified.
Fixed price models of the economy Table 5.3: Multiplier matrix for a three-sector economy can be thought of as a snapshot of the economy at any given Industry Purchases time. They capture the flow of dollars among buyers (demand) A B C and sellers (supply) within the A 1.25 0.29 0.25 0.37 Industry economy. Expanding on the I-O B 0.26 1.21 0.27 0.29 example shared above, we expand Sales on the matrix where buyers are C 0.26 0.27 1.26 0.42 located along the columns of the Income 0.65 0.68 0.60 1.39 spreadsheet and sellers are located Type II Output 1.77 1.76 1.78 1.08 along the rows and each individual Multiplier cell of the spreadsheet represents the dollar flow between any Source: Watson et al. (2015). particular buyer and seller (table 5.2). Since supply equals demand, The condition of supply/demand the column totals must equal the equality is important because it Basic I-O Modeling row totals. allows us to track how changes in one part of the economy ripple Structure Now think of the spreadsheet as throughout the whole of the a proxy for business transactions economy. These ripples constitute If we reference the multiplier in the agricultural industry that the multiplier effect. Revisiting figure above, we can see the includes purchases of products the example from Wisconsin, the impact of the multiplier effect from the economy (expenditures multipliers can be derived from within the I-O “spreadsheet of across columns) and sales of the original I-O model to look like the economy.” In this scenario, products to the economy (sources table 5.3. there was a change in the demand of revenue across rows). Again, (sales) for local foods. In order since supply equals demand in to produce additional output to our scenario, total revenues of meet that change in demand, the agriculture (row total) must equal total expenditures (column total).
74 75 farmer had to increase production, of indicators that are useful for the “local” or regional economy which in turn required the farmer decision-makers and planners. you intend to study. Determining to purchase additional inputs. In The most important “impact” what constitutes local can have our example, the farmer purchased outcomes are the total jobs a decisive impact on the results: additional equipment from a and the total labor income it is nearly always true that the local retailer. This represented an that are generated from a larger the definition of local, increase in demand or sales for production change scenario. In the more inter-industry linkages the retailer, who must order new addition, transparent models exist, and the larger the economic inventory to meet the new level like IMPLAN allow us to itemize multiplier effect of a given change of sales. The visual depiction of and tailor the amount and types in the demand for local goods and the simple multiplier illustrated of inter-industrial activity that services. To isolate the effects of in figure 5.1 shows us how the accumulates to other industries in an impact, it is desirable to create change in sales (demand) for the study region. as small a study area as possible, farmers generates ripple effects while still including the areas throughout the entire economy. necessary to capture all of the important effects. I-O models help us to generate Properly Specifying useful insights and conclusions the Study Area When defining a study area, about industrial change in a study you will want to consider the area. They help us anticipate the The first step in conducting availability of secondary data magnitude and extent of regional economic impact assessments is for your region, as described linkages due to production or to define the appropriate study in module 1 of this Toolkit. other changes across a range area – i.e., the boundaries of The methodology described in this section of the report uses secondary data available from the IMPLAN Group, LLC. (IMPLAN), available by zip code, congressional district, county, and State. IMPLAN’s functionality allows researchers to easily develop multiple county- or state- based models. Though data are available at a sub-county level, regional scientists and the IMPLAN organization recommend using the concept of a functional economic area to guide decisions about study area boundaries. A functional economic area is basically a semi self-sufficient economic unit (and is therefore ideal for this type of analysis). It includes the places where people live, work, and shop, and can sometimes be identified by physical or other characteristics. The more closely the study Identifying exactly what can be classified area resembles a functional as “local” can have an economic area, the more robust impact on results. and credible the analysis is likely to be. It is rare that a sub-county
76 77 area has the characteristics Figure 5.2: Illustration of Factors that Drive the Size of an Economic of a functional economic Multiplier area. Accordingly, it is usually recommended that a county should be the smallest unit of analysis.
It is sometimes tempting to assume that local foods have a statewide impact and, therefore, one should choose to use a statewide model for estimating impacts. However, using a larger geographic region as the basis of your analysis will ultimately inflate and exaggerate your impact results owing to the greater likelihood of input purchases. Furthermore, the impact results will be less reflective of the actual economic activity occurring in the primary location of the study. A good rule of thumb is that a study territory should encompass the geography where Another approach you may wish to as the promotion of local foods, to the majority of the assessment consider is to conduct the analysis use the largest multiplier possible team members live. Additionally, for multiple study areas, each to build support for their position. we recommend considering your relying on differing assumptions. There are generally two things that target audience when determining This strategy provides those drive the size of the multiplier: (1) appropriate geographic boundaries reading the study a better the level of inter-industry linkages for your I-O model. If your project understanding of the range of (i.e., imports or leakages); and is funded by a State agency, potential impacts across a broader (2) the size of the economy being defining local food by State geographic territory without examined. As illustrated in figure boundaries may make sense. Or, if compromising the integrity of 5.2, smaller economies (e.g., the initiative you are assessing is the results. small rural communities) that funded by a county, or facilitated have limited local linkages will through a Cooperative Extension have small multipliers, whereas agent who is funded through larger economies (e.g., large a county, then county borders Other Considerations: metropolitan areas or a State) that may be the more appropriate Reasonable Size of have stronger industry linkages will definition. Alternatively, perhaps have larger multipliers. you are trying to assess what the Multipliers impact of an initiative or policy is While these two characteristics to participating producers. If this One of the biggest challenges in often move together, they are is the case, then defining your assessing the reasonableness of an uniquely defined in that you could study area based on the locations economic impact assessment is the have weak economic linkages in and distribution patterns of the relative size of the multipliers. It is a small economy, you just will participating farms might be most not uncommon for advocates of never have a large multiplier in appropriate. You will also need a particular policy or action, such a small area, even if linkages are to keep in mind the residential very strong, because the number location of the labor force, as their of businesses in any one area to spending patterns are important to your study results. 76 77 Case Study: Colorado Farm to School49 In situations where one is unsure of “the best” assumption to make, conducting your analysis using a scenario approach can make sense, particularly in that it processes a range of results. Gunter and Thilmany used a scenario approach to analyze how the definitional choice for “local” affected the outcome of their economic impact assessment of a farm-to-school program in Colorado. In Colorado, the majority of the population lives along the Front Range (see figure 5.3) and some direct- market oriented vegetable producers can operate in this region. Yet, based on the State’s climate, almost all of the tree fruit production (which is a high demand good) occurs on the West Slope (about 250 miles from the Front Range). Given uncertainty about how to define the geographic scope of the program’s impact, this team decided to define two different regions. To get a sense of the hyper-local impact, the first region includes only Larimer and Weld counties surrounding the school district. Then, to look at a more regional impact, the second region added the five counties with the highest dollar value of direct sales (Mesa, Delta, Adams, Morgan, and Weld). By including these counties, fruit sales of the West Slope producers were captured while at the same time relying only on the counties that already have the infrastructure and distribution capabilities for intermediated sales from producers.
Figure 5.3: Map of Direct Farm Sales in Colorado, 200750
Source: Food Environment Atlas, Economic Research Service, U.S. Department of Agriculture
Utilizing these two regions, scenarios (outlined in figure 5.4) were developed to determine outcomes based on differing assumptions. The first scenario includes Larimer and Weld counties and assumes that all purchases made by Weld are all new demand (no money was taken away from any other sector in the region). Scenario two is exactly the same, but also includes the larger six county region. However, given the larger region and possibility of competing wholesale activities occurring in the region, sales to producers is most likely shifting sales away from wholesalers in the region. We explore this issue further in module 7.
49 For more information, visit http://coloradofarmtoschool.org/colorado-farm-to-school-task-force/. 50 For more information, visit http://www.ers.usda.gov/data-products/food-environment-atlas.aspx.
78 79 Figure 5.4: Scenario Map for Economic Impact Assessment of Farm-to-School Programming in Colorado51
Source: Gunter & Thilmany McFadden (2012).
As expected, this study found that the more expansive parameters used to define the boundaries of the targeted local food region, the greater the estimated economic impact of local food activities. This is due to the fact that in a larger economy (as defined by space and/or potential buying dollars), there will be more inter-industry linkages.
have commercial relationships of a local foods initiative using to note that researchers typically with will be limited. Subsequently, multipliers specific to a local use multipliers that are less than for smaller regions, the ability county, the impacts will be smaller 2.0, with multipliers for smaller to retain dollars locally tends to than if the same initiative is rural areas hovering closer to 1.3 be weaker, thus driving the size examined using multipliers for and those for larger, more urban of the multiplier down. For a the State. areas hovering closer to 1.9. larger region, dollars will tend to This rule of thumb is based on remain in the region longer, thus Which approach is “correct”? estimates from rigorous academic pushing the size of the multiplier Both are “correct,” but the point assessments done over several upward, but such linkages can of reference (county vs. State) is decades. However, there are still be made stronger with different. While there are no hard always unique situations involving intentional community planning and fast rules about multipliers regional economies and industries and networking. If a community because each industry and that are capable of yielding larger analyzes the potential impact community is unique, it is useful multipliers.
51 For more information, see: Gunter, A., and D. Thilmany McFadden. May 2012. “Economic Implications of Farm to School for a Rural, Colorado Community.” Rural Connections: 13-16.
78 79 important to understand the built-in limits of I-O. As with any economic modeling technique, some simplifying assumptions about the structure of the economy must be made to allow the modeling process to move forward. However, for the purpose of guiding policy development and economic decision-making, the most important limitations to the use of I-O models – or the data Source: 2014 Retail Shop Topic, Jones Lang LaSalle, September 2014, available from http:// www.us.jll.com/united-states/en-us/Research/JLL-ShopTopic-Grocery-share.pdf?aa79b615-6518- generated from those models – 4080-af03-e6104ea59d91 can be classified as follows: • Feasibility and return on elects to buy produce from a investment issues. Other Considerations: farmers market and not at a chain retail grocery store, this means • Understanding employment Reasonable Scenario there has been a gain in farmers impacts. Development market sales, but a loss of sales • Impacts on existing activity to the grocery store. The net and current residents. Next to identifying the appropriate impact of this change in spending multiplier, the most important patterns hinges on the linkages • Consequences for local step in conducting an impact of locally sourced food purchased governments and service assessment is accurately at a farmers market compared provision. describing the scenario under to the linkages of non-local food consideration. For local food, this purchased at a grocery store. (Additional considerations for can be complicated because the Feasibility and Return promotion of local foods typically scenario development are involves a shift in the allocation of covered in the following section, on Investment consumer food dollars. Expanded module 6.) demand for local foods is too I-O models are not structured often treated as “new spending,” to address the overall feasibility which is factually incorrect and Understanding Input- (profitability) of a scenario or can lead to faulty analysis. For to predict expected returns on example, if a household elects to Output Analysis Limits investment. Feasibility studies purchase additional quantities of are separate from an economic locally-sourced food, that generally While there are a number of impact evaluation, though the means there has been a shift useful applications in which I-O data from such studies are away from traditional sources models can be used to analyze useful in developing impact of food. Similarly, if a household the impacts of local food, it is also 80 81 analysis scenarios. At its most from grocery stores to a local regional labor force in fact contains basic level, a feasibility analysis farmers market. A change in jobs those skills. To assume, however, measures whether a concern can is assumed to lead to changes that building a specific type of generate sales to be profitable in in area households, which in industrial capacity in rural areas a conventional sense. I-O studies turn boosts regional consumer will be able to take advantage of would then use this information spending on local products. an adequate supply of skilled labor to project potential regional There are, however, intervening is imprudent. economic outcomes from a new conditions that interfere with (and supposedly) successful these tidy assumptions. New jobs venture. Proponents and could go to existing unemployed, policymakers need to understand under-employed, or local residents Impacts on Existing that an I-O analysis cannot inform who currently commute to jobs Commercial Activity investors or taxpayers as to the in nearby regions. Further, a potential financial success of a new job could actually go to an There is one underlying venture. This may be confusing to individual who starts commuting assumption to most economic some people because the results from a nearby community. In impact methods that can cause of I-O based impact assessments essence, while I-O can provide difficulties in truly understanding are periodically used to assert an estimate of the number of the impact of any given that a region is realizing gains jobs resulting from the scenario scenario: supply responses are across several categories (like under consideration, it cannot unconstrained. This means that total industrial sales, revenue, or inform us as to who is taking – or potential supply is unlimited and personal income) that exceeds the losing – those jobs. There are that price does not play a role in amount of public subsidy. Hence, other important considerations the outcome of the model. We there is a declared public return in terms of job change. Local know, however, that in the real on investment. These assertions foods production tends to be world, there are constraints to are made by either naïve or seasonal and cyclical. Therefore, supply and prices can rise or fall unscrupulous practitioners of the numbers of jobs created that depending on the scenario under economic impact analysis and are are full-time or part-time must consideration. In much of the U.S., used inappropriately to influence be enumerated. Additionally, nearly all arable land is already in policymakers and citizens into per-job earnings, a surrogate production, or the supply of land believing regional economic and for job quality, will also need to is limited. Any expansion of local fiscal accounts are flourishing as be highlighted. All jobs are not foods production, therefore, will a result of a particular initiative. equal, and overall job worth is an tend to result in land use shifting I-O models cannot yield the important consideration when away from one type of cropping information that is necessary to drawing conclusions about an to another. These countervailing assess the rate of return on an economic change. Last, there are offsets are discussed at length in investment or support a cost- issues associated with labor supply module 6. In addition, we could benefit type of analysis related to and labor skill diversity. An I-O see the price of farm land change the use of public funds. model tells us the number of jobs as its uses are altered. This is a required for a particular scenario. scenario that most I-O models It does not tell us, however, if cannot address. Alternatively, the skill sets required to satisfy Employment Impacts increased success at marketing those jobs are available in the local food directly to consumers community. Skilled I-O modelers will often displace sales made I-O models can compute how can affix an industry by occupation by area grocers. These are just many new jobs are required in matrix to their modeling system to two examples, but I-O scenarios the regional economy given a produce findings about the kinds that assume local food expansion scenario of change, such as a of skills required for a scenario must be tempered with I-O shift in consumer spending away to be realized and whether the analyses of the consequences of
80 81 potential differences in land use • Off-setting consequences that and marketing channel choice. are part of their scenarios or You must be careful to consider all policy prospects aspects of the suggested economic scenario, and the ways in which • That the assumptions that the these factors might influence the modeler makes when using interpretation of impact results.52 IMPLAN should be made transparent in whatever report the person conducting the study provides to your Takeaways team. These assumptions could be about the data used Community development in the region, consumption analysis is a complicated process rates of fruits and vegetables, that involves the incorporation etc. Assumptions need to of development theory with be transparent appropriate measurement tools. for other We use I-O models as our primary researchers to mechanism for measuring regional critique those economic gains associated with assumptions local food systems. When you use as sound or these tools, however, you need to unsound. be mindful of several things: • The structure and logic of I-O modeling systems • The limits of I-O models • That the region of scrutiny should match the economic activity being evaluated • That the scenarios of analysis should be well-developed and realistic
52 Note that a properly developed I-O model focused on the economic impact of local food system change should generally include a fiscal (tax revenue) component associated with labor force, household, and income changes. Most local foods analysis scenarios do not yield large localized gains in employment or area incomes. Nonetheless, there may be positive consequences associated with job creation due to specialized production, aggregation and distribution requirements. If so, it may be prudent to attach fiscal impact evaluations of local foods projects to any I-O study of local food systems so that their influence on job creation and tax receipts may be evaluated in proper context. In recent years, advocates for local foods and/or other non-conventional agricultural crops, like organic production, have lobbied local governments for tax-based incentives to help stimulate interest and investment. In these cases, local governments are forgoing immediate tax receipts in favor of regional economic enhancement. These governments hope that in the long term, resulting growth will generate other tax revenues that more than offset the cost of meeting the growth in all local government service demands associated with the initiative (or net positive fiscal impacts result). I-O models do not produce estimates of net fiscal gains or losses, but information derived from the analysis, like job and income gains, can be entered into properly specified impact models to further complement the regional economic impact evaluation.
82 83 Module 6: Addressing Opportunity Costs in the Analysis of Economic Impacts across Local Food Systems
Module 6 focuses on • Involved a technical expert water, and any other resources understanding two key who has a thorough that are requisite to the growth assumptions of I-O models (I-O), understanding of the of locally produced foods are the “no resource constraints” terminology and limitations of plentiful. Hence, it is assumed that assumption and the “no I-O models, advanced training the expansion of locally produced opportunity cost of spending” on conducting an economic foods does not take land, water assumption. These assumptions impact assessment, and or resources away from other are fundamental in properly knowledge of its limitations productive activity. Incorporating estimating and interpreting the (module 5). countervailing effects means economic impact of local and that as more specialty crops, for regional food systems. In this As discussed in module 5, example, are put into production module you will learn: economic impact assessments of to meet growing demand for local and regional food systems local fruits and vegetables, more • What the no resource are typically done with I-O (I-O) arable land is unlikely to become constraint assumption means models. Economists often focus available. Accordingly, increases and how you can think about on several aspects of such models in specialty crop production likely it in terms of your local that are fundamental in properly mean land diverted away from economy. estimating and interpreting the other uses such as corn or • What the “no opportunity economic impact of increases soy production. cost of spending” assumption in local food sales on local (or means and how it is typically regional) economies. Two key, The “no opportunity cost of considered when modeling usually implicit, assumptions spending” assumption means that economic impacts of local with regard to the use of such while farmers directly marketing foods. models include the “no resource their crops constitute a positive constraints” assumption on local economic impact, there • How your team can correctly the supply side and the “no may also be negative impacts of incorporate these two key opportunity cost of spending” that same spending due to the concepts into your I-O model. assumption on the demand side. opportunity cost of lost direct sales activity in other food-handling The content of this module is The “no resource constraints” sectors of the economy (typically appropriate at the stage of your assumption assumes that gross the wholesale and retail sectors). project when your team has: gains in local food production Opportunity cost, a key concept must be balanced against the fact in economics, has often been • Defined its scope, specific that these shifts (referred to as described as expressing the basic goals and objectives, countervailing effects) will usually relationship between scarcity and timeframe, available come in the form of a direct, acre- choice. Opportunity cost should be resources, and regional by-acre reallocation of existing considered from the demand side; boundaries (module 1); uses of agricultural land. A growth it reflects the assumption that a • Collected requisite primary scenario, such as the growth of region does not fundamentally and/or secondary data the local food system, is often change the amount of money (module 2 for secondary data constructed by policymakers under spent in the food sector based on and module 3 for primary the implicit assumption of “no the availability of locally grown data); and resource constraints;” that is, land, food. Rather, it is more likely
82 83 that customers shift purchases characteristics, or impact land Case Study: Supply from one source of foodstuffs use. This information is generally and Demand Size to another. This concept is also unavailable from secondary Constraints – Incorporating a key discussion point for any sources, and involves additional Opportunity Cost and economic assessment of a food primary market information Countervailing Effects54 system, innovation, change, or and/or assumptions. new action plan. For instance, if a region’s food buying dollars When opportunity costs related to Two studies that provide are shifted as a result of a “Buy demand changes or countervailing useful examples about ways Local” promotional campaign, effects related to resource to incorporate opportunity or investments in a new local constraints are not incorporated cost and countervailing effects food initiative can be expected to into an economic impact into your local and regional displace some food distribution analysis, the analysis is likely to food system assessment are activity previously conducted by overestimate regional economic Evaluating the Economic a less locally oriented firm, then gains from a shift to more local Impact of Farmers Markets the opportunity costs of making purchases and/or consumption. Using an Opportunity Cost this purchasing change need to be Since economic impact numbers Framework, a study that considered in any credible analysis will be smaller when opportunity evaluated the economic impact of economic impact. costs and countervailing effects of West Virginia’s farmers are included, this approach can markets, and The Regional In this module, we discuss be challenging from a political Economic Development the limitations of analyses standpoint, where larger numbers Potential and Constraints to that proceed under these “no help to ‘sell’ projects, even though Local Foods Developed in the resource constraints” and “no the results are less defensible.53 Midwest, which focused on opportunity cost of spending” Therefore, when embarking on the potential economic impact assumption, and how analyses can an economic impact analysis, we of expanded local fruit and be formulated to more accurately believe it is a valuable practice vegetable production in several represent market responses – to adopt more standardized Midwestern States. measuring net rather than gross approaches, offer good examples impact. Measuring opportunity of how these adjustments can In Evaluating the Economic cost and countervailing effects be incorporated, and learn from Impact of Farmers Markets are not straightforward, and previous rigorous examples Using an Opportunity Cost require information about to support your modeling Framework the authors use the extent to which increased refinements (we have included primary data collected from consumer purchases of locally several throughout this module). producers who participate in grown food affect other types of Instructions on how to follow these West Virginia farmers markets food purchases, change market recommendations are provided in to inform an IMPLAN-based prices and/or supply chain the remainder of this module. I-O study. They account for the opportunity cost by assuming the positive impacts associated with money spent at farmers markets results in decreased spending at local grocery stores, as well as building material and garden supply stores (due to ornamental 53 For more information, see: Hughes, D.W., C. Brown, S. Miller, and T. McConnell. sales at farmers markets). 2008. “Evaluating the Economic Impact of Farmers Markets Using an Opportunity Cost The study found that while Framework.” Journal of Agricultural and Applied Economics. 40(1):253-265. farmers markets would result 54 Hughes, D.W., C. Brown, S. Miller, and T. McConnell. 2008. “Evaluating the Economic Impact of Farmers Markets Using an Opportunity Cost Framework.” Journal of in a net positive impact on the Agricultural and Applied Economics. 40(1):253-265. State economy, accounting for
84 85 the opportunity cost of spending reduced the economic impact of the markets from 119 jobs (69 full-time equivalent jobs) and $2.389 million in output including $1.48 million in gross state product to 82 jobs (43 full-time equivalent jobs), $1.075 million in output, and $0.653 million in gross state product. Figures 6.1 and 6.2 illustrate the expected net job impacts to selected industry sectors affected by estimated changes in consumer purchasing patterns (e.g., increased spending at farmers markets results in decreased spending at local grocery stores and building material and garden supply stores).
Figure 6.1: Selected West VA Sectors Experience Job Gains and Losses due to Expanded Farmers Market Sales55
Source: Hughes, Brown, Miller & McConnell (2008).
Figure 6.2: New Job Impacts due to Expanded Farmers Market Sales in West Virginia56
Source: Hughes, Brown, Miller & McConnell (2008).
55 Source: Hughes, D.W., C. Brown, S. Miller, and T. McConnell. 2008. “Evaluating the Economic Impact of Farmers Markets Using an Opportunity Cost Framework.” Journal of Agricultural and Applied Economics. 40(1):253-265. 56 Ibid.
84 85 In The Regional Economic Development Potential and Constraints to Local Foods Developed in the Midwest, the author addresses the countervailing effects of increased fruit and vegetable production (figures 6.3 and 6.4). Using secondary data, the author demonstrates that the land, water, and other resources required for the growth of local foods production must come from existing commodity crop production. The study estimated county-level fresh fruit and vegetable production potential (supply side) for Minnesota, Wisconsin, Illinois, Michigan, Indiana, and Iowa, as well as expected sales of fresh fruit and vegetables based on current population (the demand side).
Figure 6.3: Expected Acres Needed to Satisfy Figure 6.4: Expected Sales from Demand for Local Demand for Local Fruits and Vegetables Within the Fruits and Vegetables Within the 6 State Region.58 6 State Region.57
Source for both maps: Swenson, D. (2011).
In total, the study estimates the 195,669 acres of fruits and vegetables would be need to satisfy local demand for fruits and vegetables in the 6 State region, with a farm value of $635,441,980. Though these numbers may seem large, the study found that there would be fewer than 250 acres of production in 53 percent of the counties, and only 10.5 percent had the potential of 1,000 acres or more. Over 57 percent of the counties would have gross farm-level sales under $1 million, and only 3.2 percent would exceed $5 million. In total, the study finds the gross total output impact from the increased demand for fruit and vegetables would be $1,027,657,939, generating 6,694 jobs. However, Swenson shows that the land in this region suitable for fruit and vegetable production is likely already planted in corn and soybeans. He therefore calculates the net impacts that would occur from shifts away from corn and soy to fruit and vegetable production. Results indicate that the overall net impacts would be a gain of 4,802 jobs and a regional total output impact of $709,803,348. This, the study demonstrates the importance of incorporating countervailing effects in a local foods economic impact assessment.59
57 Source: Swenson, D. 2011. The Regional Economic Development Potential and Constraints to Local Foods Development in the Midwest. Leopold Center for Sustainable Agriculture. Iowa State University. Available at: https://www.econ.iastate.edu/sites/default/ files/publications/papers/p12697-2011-03-30.pdf [Accessed 27 May 2015]. 58 Ibid. 59 Ibid.
86 87 farmed temporarily or land that is brought into production or Resource Constraints idle for reasons other than its crop- reclaimed, making it more difficult and Local Food producing potential. However, in to properly assign opportunity impact analysis, these are atypical costs. For example, if prevailing Systems: Supply Side cases. The norm is that farmland area use values reflect systematic Countervailing Effects for local foods must come from the disinvestment or widespread existing supply of utilized farmland. blight, land utilization costs might simply reflect the costs of Using properly specified I-O Such a one-to-one land acquisition and readying the land models, local food market analysis opportunity cost assumption is for production. The same can be can help communities, regions, even more salient in an era of said for abandoned or fallowed and States project growth in comparatively robust returns rural land that has production jobs, income, and value-added to conventional cropland uses potential or is otherwise being production based on assumptions like corn, soybean, and wheat used sub-optimally. It is generally about levels of fruit, vegetable, production. Higher commodity the case that the current use of or animal production, and prices have resulted in expansions the land represents the assumptions about satisfying in crop acres over the past 5 years, opportunity cost, but it certainly unmet regional demand for locally- reductions in Conservation Reserve should be remembered that grown crops or locally raised or Program acres, and reductions in the current use of the land also processed animals. While it may be hay land and pasture land.60 For provides a strong signal as to the tempting to think that incremental example, estimated U.S. planted land’s production potential. gains in local food production field crop acres in 2014 were represent pure gains in regional nearly 5 percent greater than in economic output, as evidenced by 2011, according to the USDA’s increases in the number of factors National Agricultural Statistics involved in local food production, Service (NASS). Robust crop prices these gross gains in local food have also driven agricultural production must be balanced land prices upward. In Iowa, for against the fact that these shifts example, 2013 State average will usually come at the direct, agricultural land prices were acre-by-acre expense of existing $8,716 per acre, a 72-percent uses of agricultural land since very increase from 2010. Crop- high percentages of arable land producing land has high value and in the U.S. are already devoted to tends to be maximally utilized. crop production or are officially idled in set-aside programs like the Conservation Reserve While there may be other supply- Program (CRP). It is therefore side resource constraints, such as prudent for local foods impact access to water, properly offsetting analysts to assume there is a direct land demands is usually the most relationship between local food important factor to consider when production gains and declines in developing an I-O analysis based other regional crop production. on expanding local and regional There are of course exceptions, food production. The process is such as reclaimed land in and admittedly less straightforward around urban areas that may be when under-utilized land is
60 The Conservation Reserve Program (CRP) is administered by the Farm Service Agency (FSA) of the USDA. Farmers enroll in the program and receive rent payments by agreeing to remove environmentally sensitive land from agricultural production. The CRP enrollments are 10-15 years in length. CRP’s main objective is to re-establish valuable land cover to help improve water quality, prevent soil erosion, and reduce loss of wildlife habitat. 86 87 Case Study: Local Food Land Requirements Two studies conducted in the Midwest demonstrate the economic impacts of the small amount of land required for expanded local foods production. The first study helps us understand how much land is required to supply a comparatively large population of consumers. It was based on production and consumption estimates for 28 types of fruit, melon, and vegetables across 7 States in the upper Midwest. After adjusting for existing consumption patterns, duration of growing season, the storage life of the crops, and land productivity, the study determined it would take 195,669 acres to grow 100 percent of the seasonal produce demanded by 35.6 million persons residing in the Midwestern metropolitan market targets. To put that increase in local foods acreage into perspective, 195,669 acres represented less than 1 percent of all cropland in Iowa, just one of the seven Midwestern States evaluated in the study.61 The second study examined the economic impact value of land resource constraints for Kane County, IL.62 This example makes clear the process of netting out countervailing effects in compiling economic impacts; it is a more localized example of an exurban area producing for existing regional and nearby dense urban demand. Kane County sits in the western portion of the greater Chicago-Naperville-Joliet consolidated metropolitan region. With current and projected growth in urban development raising concerns about the loss of farmland within the region, regional planners requested an evaluation of the economic and farmland preservation potential of local foods development. Like the broader Upper Midwest study discussed above, this research considered regional demand for fresh fruits and vegetables as well as regional production potential. It considered existing fresh fruit and vegetable production in the county along with feasible growth in the demand for locally produced food by residents. The research also evaluated demand from potential consumers in surrounding metropolitan areas in terms of their distance from Kane County. Area planners and Extension professionals agreed on a bundle of 24 fresh fruits and vegetables that they felt could be competitively marketed regionally. Yields per acre were initially estimated with the Iowa Fruit and Vegetable Market Planner decision tool.63 These values were then adjusted to land productivity differences between an Iowa baseline county and Kane County. Subsequently, shifts in cropland acreage required to meet local (seasonally adjusted) demand were derived from regional population and yield forecasts. Table 6.1 lists the initial output and land requirements. The study determined that to serve a regional population of 445,328 people, 2,157 acres of fruit and vegetable production would be required (with a wholesale value of $9.45 million). As the county already had 1,252 acres in vegetable and orchard production, only 905 additional acres of production would be needed to satisfy total regional demand during the produce harvest season (assuming the production from the 2,157 acres would only be sold regionally).
61 Swenson, David. Selected Measures of the Economic Values of Increased Fruit and Vegetable Production and Consumption in the Upper Midwest. Leopold Center for Sustainable Agriculture, Iowa State University, 2010. Found at: http://www.leopold.iastate.edu/ sites/default/files/pubs-and-papers/2010-03-selected-measures-economic-values-increased-fruit-and-vegetable-production-and- consumption-upper-mid.pdf. 62 Swenson, David. The Economic Contribution Potential of Local Foods Production in Kane County, Illinois. Department of Economics Report, Iowa State University, 2013, see: http://www.econ.iastate.edu/sites/default/files/publications/papers/p18114-2013-05-19. pdf. 63 This tool allows for “what-if” planning for crop production by commodity based on place-specific, empirically determined yield estimates and area consumption expectations, see:http://www.intrans.iastate.edu/marketplanner /.
88 89 Table 6.1: Kane County Fruit and Vegetable Market Potential and Production Factors
Competitively served regional population 445,328
Acres required to meet seasonal fresh fruit and vegetable demand 2,157
Farm value in $2011 $ 9,452,705
Source: Swenson (2013).
For convenience in modeling, the 905 acres needed for this expanded production transition were rounded up to 1,000 acres of new vegetable and orchard production, representing just a 0.7 percent greater share of the nearly 149,000 acres of total cropland in the county. Using a county-specific I-O model adjusted for expected fruit and vegetable production costs for Kane County farmers, total fruit and vegetable production economic impacts were compiled, as were the offsetting opportunity costs of shifting production away from conventional cropping. Existing county production statistics indicated that 62 percent of the removed land would be in corn production and the remaining 38 percent in soybean production. Subtracting the economic impact of gain in vegetable acres by the economic impact of the loss in corn and soybean acres (i.e., evaluating the shift of the use of 1,000 acres) yielded estimates of net economic gains to the regional economy. Table 6.2 shows the results. New fruit and vegetable production on 1,000 new fruit and vegetable acres would have generated $6.88 million in total output once all direct, indirect, and induced activities were included. Of this amount, $3.14 million consisted of value added, and $2.1 million consisted of increased labor income for a total of 48 workers. However, the simultaneous contraction in conventional commodity farming output would lead to a direct, indirect, and induced reduction in economic activity of $1.58 million. Value added would decline by $708,257, and 13 total jobs ($338,500 in income) would be eliminated. Taking these countervailing effects into consideration, the 1,000 acre shift into produce acreage could still be expected to yield a $5.3 million net increase in total industrial output, a $2.43 million net increase in value-added, and a $1.8 million net increase in labor income based on 35 new (net) jobs in the county.
Table 6.2: Opportunity Costs Per 1,000 acres of Conventional Kane County Crop Land Converted to Fruit and Vegetable Production
Corn and Fruit & Vegetable Net Soybean Production Difference Production Output $ -1,576,895 6,883,822 5,306,927 Value added $ -708,257 3,141,300 2,433,043 Labor income $ -338,500 2,101,708 1,763,208 Jobs -13 48 35 Source: Swenson (2013).
88 89 Local foods production can offset Figure 6.5: Fruit and Vegetable Production Acres foods production demand for fruits and vegetables by State, 2012 and consumption produced in areas with production must be measured advantages that have evolved so that a as dominant national suppliers regional baseline established their supply chains. is declared. Even though two-thirds of the Economic impacts Nation’s fruits and vegetables States must reflect net are currently grown in California, regional gains Florida, Washington, Idaho, and in local foods Texas, as illustrated in figure productivity, 6.5, a meaningful shift to locally rather than the grown fruits and vegetables in gross numbers other areas could affect those and commonly shared other regional export-oriented in studies. Next, agricultural economies.64 realistic growth scenarios must be This raises the “beggar-thy- established. These neighbor” dilemma where scenarios must localized gains come at the consider realistic expense of other regions. capacities to both In classical economic terms, produce and to everyone becomes worse off Source: Boys & Hughes (2013). consume. As if this behavior is carried to its such, reasonable extreme because the benefits of growth scenarios comparative advantage in trade Nonetheless, the degree to which must not discount climatic are thwarted when everyone local production replaces imported limitations, economics, available acts only to maximize local goods from other regions of the infrastructure, and consumer production. That is an issue to country has been used as a major preferences in determining be acknowledged in the grand economic development selling production potential. National scheme, but local foods production point to justify policy and program annual yield averages, for example, in the U.S. is governed by highly creation at the local, State, do not apply to the Midwest variable levels of local demand. and Federal levels. Producing given their overall growing season As price is a key component to locally – that is, substituting local and other natural constraints, local demand, there are limits to production for historical imports notwithstanding their abundance how effectively local producers from other States or countries – of superior soils. Additionally, land can compete with regions with generates multiplier-based net productivity is much lower in many clear production advantages even gains in regional economic output. temperate areas of the U.S. than if premiums for locally sourced While local foods production in areas that currently specialize food exist. Additionally, in an era in the short run will often yield in fruit and vegetable production of unpredictable water availability, net new jobs and incomes, the because the temperate areas maximizing local production in actual or potential regional gains have poorer soil qualities and are certain parts of the country may must be measured reliably and subject to pest infestations. There not be realistic or optimal. realistically. First, existing local are also large areas of the U.S.
64 See, for example, Boys, K. A. and D. W. Hughes. “A Regional Economics Based Research Agenda for Local Food Systems.” Journal of Agriculture, Food Systems, and Community Development 3(4):1-6. Also, when one region’s actions are detrimental to another’s, as is the case with local foods production, there is the potential for retaliatory actions from exporting regions, though none have been evidenced as yet.
90 91 where low population densities as when producers directly grocery store by a local household. simply cannot support the demand market their crops to household When we examine that one dollar needed for profitable local or consumers and alter demand of spending, we see that it includes regional food markets. Finally, it for retail, wholesale, and other portions that go to transportation, is necessary to initially establish distribution services. When wholesale, and retail services and local food demand potential from farmers directly market a portion to the actual produce growers. existing evidence of what residents or all of their crops, additional We can assign various parts of actually eat, not what researchers offsets to regional growth must this retail dollar to each of these or advocates think they should be factored into conclusions activities. In our example, we can eat. All of these considerations about regional economic gains for assume $0.40 goes to the grower, need to be factored into credible accuracy’s sake. $0.20 to transportation, $0.10 studies. Once a region’s growth to wholesale, and $0.30 to retail potential has been determined, Let us consider a simple example (grocery stores are obviously then economic impacts can be regarding how to evaluate the an important component of calculated with properly specified opportunity cost of a local food food retail).65 I-O models that reflect the system using purchases from production costs of the local foods a farmers market and making sectors and the expected gross specific assumptions changes to the regional economy. regarding the local opportunity cost of such purchases. Local Opportunity We will use Cost of Direct Farm $1 dollar of Marketing Channels spending on locally grown produce as our In the scenarios previously example. To model discussed in this module, the I-O the impact of that modeling process focused on spending, we will conceptually changes in the size of local food multiply the $1 dollar through the acreage. However, these studies I-O based multiplier table, showing stopped at the farm gate, with no the resulting change in economic attention to other stakeholders in activity throughout the local the food supply chain who might economy. lose or gain. Net gains were simply measured on the assumption To fully understand this scenario, that farmers in the scenario sold we must first understand the their merchandise directly to concept of margining in I-O models wholesalers. In the next segment (see sidebar). To examine the of the module, we attempt to concept of margining as it applies more closely mirror real-world to local food systems, we will look conditions by considering other at $1 dollar’s worth of spending important regional offsets, such on produce purchased at a local
65 In the current version of IMPLAN, the margin sectors are 319 wholesale trade businesses, various retail trade sectors 320- 331 including retail trade food and beverage 324 (grocery stores mostly), and various transportation sectors 332-335. Of course, the actual impact scenarios are also somewhat more complicated than what is presented here. For more detail see: Hughes, D. W., Brown, C., Miller, S., & McConnell, T. (2008). “Evaluating the economic impact of farmers markets using an opportunity cost framework.” Journal of Agricultural and Applied Economics, 40(1), 253-265. http://purl.umn.edu/45523. 90 91 Case Study: What Is Margining? Within an I-O framework, the Bureau of Economic Analysis defines the margin or margin costs as the value of the wholesale and retail trade services provided in delivering commodities from the producer to the purchaser. The margin is calculated as sales receipts less the cost of goods sold, and consists of the trade margin plus sales taxes and excise taxes collected by the trade establishment. Margining in I-O models is required because commodities (goods) physically and functionally move or are sold through a set of marketing channels, specifically transportation, wholesale, and retail marketing channels. In fact, for most goods, the interface with the final consumer (buyer) is completely at the retail level. For example, we purchase gas for our car, and that gas is based on a whole series of transformations and movement of petroleum from the mining, processing, transportation, wholesale, and retail sectors. As consumers, we never interact directly with oil producers in a physical sense, but purchase the gas from a retail business. In fact, many, if not most, goods are bought and sold in this manner (i.e., with the final transaction occurring via the retail sector, as opposed to market transactions between buyer and the actual product maker.) Margining expenditures at the retail – or the final consumer – level allows the I-O model to represent the true functional relationship between producers and consumers. In this manner, consumers are characterized as purchasing goods directly (in a functional sense) from sectors such as manufacturing and agriculture. But in applying the concept, we also allocate certain portions of the retail dollar to appropriate “margin” sectors.
Now think of the same $1 of to represent changed shares of of the food retail dollar in such spending on produce as occurring expenditures. In fact, one of the systems than in conventional at the local farmers market. In primary motivations for promoting food marketing channels where this case the marketing functions local food systems is that farmers local produce is sold directly to a (transportation, wholesale, and receive a much greater share wholesaler (see figure 6.7).66 retail) are all part of the farmer’s distribution costs. That is, the Figure 6.6: Breakdown of $1 Spending on Produce, Farmers Market vs. farmer provides all or most of Grocery Store these marketing functions (figure 6.6 portrays a hypothetical situation in which the farmer provides all marketing functions). A small portion of the total spending could be allocated to the farmers market manager/operator. Given these changes in farmer responsibility (i.e., assuming additional supply chain functions), changes in the farm sector model coefficients may also be required
66 Source: Diamond, Adam, Debra Tropp, James Barham, Michelle Frain Muldoon, Stacia Kiraly, and Patty Cantrell. Food Value Chains: Creating Shared Value to Enhance Marketing Success. U.S. Dept. of Agriculture, Agricultural Marketing Service, May 2014. Web.
92 93 Figure 6.7: Farm Share of the Retail Dollar in Conventional Food How does this hypothetical Marketing Channels Compared to Select Local Food Channels spending pattern relate to the opportunity cost of local food systems? To see this relationship, we now reexamine our graph in terms of where such activities occur (see figure 6.8). We assume, for now, that the produce grower is not local and that a non-local set of businesses provides the transportation. But we also assume that the wholesale sector is entirely local and, obviously, the retail portion is local (since the purchase is from a local grocery store).67 Based on our scenario, the $1 dollar in spending has an opportunity cost in the local
Source: Diamond et al. (2014). economy of $0.10 in reduced sales for wholesale activity and $0.30 in reduced sales in retail activity. The local direct impacts are shown in figure 6.8 for both the farmers Figure 6.8: Division of $1 Spending on Produce, Farmers Markets vs. market and the grocery store. Grocery Store How do we appropriately evaluate the economic impact in our local economy? Figure 6.9 shows the spending by the farmers market as a direct impact on the local farm sector. The graph below illustrates the hypothetical difference in the direct impacts from $1 of spending at a farmers market compared to at a grocery store. Recall that this is important as the final (total output) impact is calculated as the direct + indirect + induced impact, and is based on the strength of local linkages throughout the local economy.
67 The store does not have to be locally owned; rather, the goods in question just have to be locally provided (meaning the store would use locally-provided inputs, including local workers.)
92 93 Finally, the net impact of the One of the many advantages of farmers market purchases on the using I-O models to calculate the Case Study: Evaluating local economy is illustrated in the net economic impact of local the Economic Impact graph below and constitutes the food activities is the level of detail of Food Hubs including positive local economic impact concerning the local economy Opportunity Cost of increased farmers market that such models are able to purchases plus the negative impact contain. For example, an IMPLAN- of that same spending due to the based model of a local economy opportunity cost of lost direct can contain up to 536 economic activity in the wholesale and retail sectors on the supply side. We sectors (we add these figures can examine the “winners” and together rather than subtracting “losers” associated with various the opportunity cost portion local and regional food system because the opportunity cost is initiatives or policies when we already reported as a negative account for opportunity costs. value). Note that the net economic Through awareness of the policy impact of increased farmers “winners” and “losers”, economic Regional Access Picking up Beef from Maple Avenue Farm, Earlville, NY. market activity is still positive, developers and policymakers but is reduced from the level that can work to craft incentives that Schmit et al. (2013)68 existed before opportunity costs minimize losers and maximize conducted a very interesting were taken into account. winners, depending policy goal. extension of this concept in examining the opportunity cost of a food hub’s sales Figure 6.9: Difference in the direct impacts from $1 of spending at a through traditional wholesale farmers market compared to at a grocery store firms. They estimated the degree to which a food hub could take demand away from other components of the food system in general through reduced purchases by grocery stores and other business buyers. Their analysis indicates that half of the food hub’s customers diverted purchases from other sources due to the availability of food hub products. Accordingly, they calculated the opportunity cost to be 11 percent of the original food hub economic impact.
68 Schmit, T.M., B.B.R. Jablonski, and D. Kay. 2013. Assessing the Economic Impacts of Regional Food Hubs: the Case of Regional Access. Cornell University.
94 95 • Local food system impact Takeaways studies that account for opportunity cost from the Local, State, and Federal demand side or countervailing policymakers are increasingly being effects from the supply side asked to support the development can point out possible winners of infrastructure or consider and losers as such systems changes in policies with regard develop. This provides to local food systems. Advocates information concerning why are, of course, pushing for such certain sectors could oppose changes. We can glean a number the growth of local food of lessons for local food system initiatives, or, if the advocates and local policymakers impact is small, such to use in evaluating the potential information might economic impact of a given local be used to alleviate food system project. fears with respect to opportunity costs. • Opportunity costs are This may also present important. Too often, an opportunity to bring economic impact studies of together representatives local food systems fail to take from different sectors into account countervailing to craft policies that effects or opportunity costs. minimize “losers.” However, researchers and members of local food system assessment teams should always keep those concepts in mind when evaluating the results of such studies. The bottom line is that actual benefits may be smaller than projected benefits. • Remember the assumptions upon which I-O models are based; in particular, the fixed price and lockstep production assumptions discussed here and in module 5. Lockstep production assumptions imply that changes in input use correspond perfectly with changes in output; i.e., if output increases by 50 percent, for example, the use of inputs will also increase by that amount. Such assumptions mean that model results should be evaluated with care because they may not always represent economic reality. 94 95 96 97 Module 7: Advanced IMPLAN Analysis to Understand the Economic Impact of Local Food System Initiatives
Module 7 is the most technical • Involved a technical expert • Distinguishing between gross module and is recommended for who has a thorough economic effects and net users with expertise in the field understanding of the effects in your evaluation. of economic I-O modeling (I-O), terminology and limitations of or who have recruited a partner I-O models, advanced training Although these steps can be with such expertise to their team. on conducting an economic challenging and time-consuming, This module provides technical impact assessment, and they are necessary to create a and detailed information on how knowledge of its limitations depiction of your community or to adjust the default settings and (module 5) region informed by your initial create a modeling environment community-based conversation that is more directly reflective of • Considered how to carefully and planning efforts (as discussed conditions in your community reflect opportunity costs and in module 1). or region using the software countervailing effects into program IMPLAN. In this module your modeling efforts The purpose of this module is you will learn: (module 6). to provide guidance on how to conduct more advanced analyses • Why your team might want The proper use of I-O models is with IMPLAN software, so that to modify IMPLAN for your key to performing rigorous analysis you can adjust the default economic impact study of local food system activities settings and create a modeling because they provide such a data • How to modify IMPLAN environment that is more directly rich starting point. Nevertheless, as reflective of conditions in your • The data you will need in order discussed in module 6, conducting community or region. The more to modify the model a careful and comprehensive local advanced the analysis, the more food system assessment usually careful you should be in selecting • Modeling approaches for your involves making several additional a team member or recruiting an impact assessment. adjustments to the default expert that has experience in modeling systems, such as: customization, understands the The content of this module is • Scrutinizing the default drawbacks and caveats of this appropriate at the stage of your work, and knows the importance project when your team has: baseline data that are contained in the model; of transparency in sharing • Defined its scope, specific assumptions and methodologies. goals and objectives, • Modifying existing data where Though there are other types of timeframe, available appropriate; software available for this type of analysis,69 IMPLAN is widely resources, and regional • Amending assumptions about boundaries (module 1) accepted among economists and relationships among sectors in other economic development • Collected requisite primary the model; professionals and is the most and/or secondary data • Manually introducing missing commonly used, in large part (module 2 for secondary data or new sectors into the because of the ease with which and module 3 for primary economy, if needed; and modifications can be made to the data) model. The content of this module assumes that you are familiar with
69 For example, RIMS II, available from the U.S. Department of Commerce, Bureau of Economic Analysis, as well as more advanced modeling tools (i.e., General Algebraic Modeling Systems, GAMS, which facilitates computable general equilibrium modeling – more advanced than I-O in that it allows for the endogenizing of prices) 96 97 Case Study: Positive net IMPLAN software and databases net (marginal) change in new economic impacts occur (for a basic overview of I-O models (or foregone) economic activity when the local economy and IMPLAN’s economic analysis associated with an industry, event, structure and capacities, please or policy change in an existing see module 5 or refer to IMPLAN’s regional economy.70 • Can rely on local production website, http://implan.com). to offset or substitute for commodities that must be The techniques presented in this fully or partially imported module incorporate additional Why Might We Need – economists refer to this data and information from primary as import substitution (see to Modify IMPLAN for and secondary sources. While Module 5 for additional Local Food System modules 2 and 3 introduced and explanation) explained the wide variety of Impact Assessments? • Can produce sufficiently more data that are available or can be than local demand requires collected, this module will illustrate To conduct a robust economic and can export how much richer your economic impact analysis, you need to the remainder analysis can be when those data have information about industry are brought to bear on important linkages both within and among • Increases its share of locally- community economic priorities. industrial sectors of an economy. controlled and governed While time-consuming to compile, Fortunately, IMPLAN provides food production enterprises the information can be used a considerable amount of this compared to non-local effectively to assess the impacts of information in its basic format. ownership, while the share food system activities; in particular, Using predominantly public data of economic activity already such additional data are useful from national sources to create associated with the local when computing the value of inter- a national table of accounts, food sector also grows (e.g., industry linkages within the local IMPLAN offers a comprehensive ownership income remains economy as a result of expanded set of balanced Social Accounting in the local community final demand for local goods Matrices (SAMs) for every county instead of flowing to distant and services. and State in the United States.71 shareholders). These SAMs illustrate a relatively Note that IMPLAN can be used to complete picture of the economy, In the absence of these factors, conduct both economic impact accounting for all expected inter- changes from one kind of assessments of food system industry transactions as well intra-local activity to another initiatives or activities, as well as transfers to and from intra-local activity (i.e., as to estimate the economic institutional sectors like purchases from a local contributions of local food systems households, capital, governments, distributor to purchases from to the local economy. There are imports, and exports. a local farmers market) do not important differences between produce net economic impacts the two. Contribution analysis IMPLAN’s SAM will account for in the near-term. measures the gross changes in a within-region transactions among region’s existing economy that can industries and households. be attributed to a given industry, When processed using standard event, or policy. In contrast, I-O protocols, the SAM yields impact analysis examines the multipliers that describe how
70 For more information of the distinctions between economic impact assessment and contribution analysis, please see: Watson, P., J. Wilson D. Thilmany, and S. Winter. 2007. “Determining Economic Contributions and Impacts: What is the difference and why do we care?” The Journal of Regional Analysis and Policy. 37:2. 71 IMPLAN data come largely from Federal sources, including: the U.S. Bureau of Economic Analysis’ Regional Economic Accounts, the U.S. Census Bureau’s County Business Patterns, National Household Personal Consumption Expenditures, the Annual Survey of Manufacturers, and the USDA’s National Agricultural Statistics Service (IMPLAN Group, LLC 2013).
98 99 the supplying sectors respond to • Dairy cattle and milk sum of all input coefficients plus industrial changes (the indirect production those for payments to value added effects or the type I multipliers) equals 1.0. Consequently, they and how the total economy, • Poultry and egg production can be interpreted to mean that including households, respond to • Animal production (excluding for each $1 of output change in industrial changes (the indirect cattle/poultry/eggs) vegetable and melon farming, that plus the household or induced sector required an additional $.051 effects yield type II multipliers). Each IMPLAN industrial sector is in agricultural support activities, The SAM contained within represented by a single, initially nearly $.018 in agricultural IMPLAN, then, approximates fixed expenditure pattern, which chemicals, and so on. both within-region industrial economists refer to as a production transactions and the relationship function, a mathematical To reiterate, the complete of the region to the rest of expression that relates the expenditure pattern reflects how, the world. quantity of inputs required to on average, each industry sector produce that industry’s resulting spends money on: As explained in more detail in 72 output. An example from IMPLAN • Other sectors in the local module 5, IMPLAN displays the is provided in figure 7.1, which entire U.S. economy in 536 sectors. economy (intermediate lists the top 10 intermediate purchases) The primary economic sectors outlay categories for vegetable that pertain to aspects of food and melon production in Iowa • Employee compensation, and agriculture in the default out of a possible 536 categories proprietor income such as settings include: of commodity requirements. The returns to business owners, • Oilseed farming and grain farming Figure 7.1: Sample Vegetable and Melon Farming Sector Production • Vegetable and melon farming Function • Fruit farming and tree nut farming • Greenhouse, nursery, and floriculture production • Tobacco farming, cotton farming, and sugarcane and sugar beet farming • All other crop farming • Cattle ranching and farming (meat)
Source: IMPLAN
72 For an in-depth discussion of how production functions are constructed within IMPLAN, see Lazarus, W., D. Platas, and G. Morse. 2002. “IMPLAN’s Weakest Link: Production Functions or Regional Purchase Coefficients.” The Journal of Regional Analysis & Policy. 32(1):33-49, and Liu, Z., and M. Warner. 2009. “Understanding Geographic Differences in Child Care Multiplers: Unpacking IMPLAN’s Modeling Methodology.” The Journal of Regional Analysis & Policy. 39(1):71-85.
98 99 other property type income an aggregate basis for an entire than is reflected by the relevant such as payments to investors, commodity- or industry sector, aggregated sector data available and indirect business taxes like which often limits the extent to from IMPLAN. For example, sales taxes (i.e., value added which local food system activities data from U.S. Department payments)73 can be accurately analyzed. of Agriculture’s Agricultural Unfortunately, much of the current Resource Management Survey • Other sectors outside of research literature attempts to demonstrate that the majority of the local economy (i.e., quantify the impact of local food farms participating in local and intermediate imports) systems using expenditure patterns regional food system markets are 75 • Other sources such as for aggregated sectors, such as small and mid-scale, and that institutional outlays (i.e., all vegetable and melon farming these producers have different payments to households, in the targeted region, thereby input requirements per output 76 capital, or governments). making the implicit assumption of production. Likewise, by that the purchasing and sales definition, many of the value- As you might imagine, this patterns of local food system adding businesses that have assembly of industry data participants (both farmers and emerged to meet the demand for constitutes a very rich starting other value-adding businesses in local food – i.e., food hubs, local point for analysis, even if you the region) are the same as those food aggregation and distribution need to modify the model to more in the aggregated commodity businesses – are likely to 74 accurately reflect the region of sectors. Yet, there is ample purchase a greater share of their interest. The challenge with using evidence that farmers and value- inputs locally, direct from farm- IMPLAN data derived from national added businesses participating suppliers, than is reflected in the 77 averages is that industry sector in local food systems interact applicable sectors. information is available only on differently with the local economy
73 Value added components together can be thought of conceptually and literally as representing the dollar value the business adds to the inputs of goods and services that it must purchase from other businesses in the process of producing its own output. As noted, value added is primarily distributed via the payments out of revenues that go to owners, workers, investors, and government. Value added by a business is measured in practice as the difference between the total value in the market (revenues received for product sales) and the payments to other businesses for the inputs it must purchase from them. 74 Note that there are a few studies that do disaggregate local food producer sectors. For example, Gunter and Thilmany (2012) utilized a combination of survey data and National Agricultural Statistics Service data to create a customized farm-to-school farm sector within IMPLAN, reflecting differential production function of farm-to-school producer participants. Schmit et al. (2013) collected detailed expenditure and sales data from farms in New York selling product to food hubs, and show that these farms have different spending patterns than depicted in the default agricultural sector data in IMPLAN, including more local purchases per unit of output. Swenson’s (2011) study is the only of its kind focused on local food system infrastructure. His research on the small-scale meat processing sector in Iowa demonstrates differences in expenditure patterns based on the scale of operation. 75 See: Low, S.A., and S. Vogel. 2011. Direct and Intermediated Marketing of Local Foods in the United States. ERR-128. Washington, D.C.: U.S. Department of Agriculture, Economic Research Service. Available at: http://www.ers.usda.gov/Publications/ERR128/ 76 Examples include: Boys, K.A. and D.W. Hughes. 2013. “A Regional Economics-Based Research Agenda for Local Food Systems.” Journal of Agriculture, Food Systems, and Community Development 3(4):145–150; Jablonski, B.B.R. and T.M. Schmit. 2014 ‘Local’ producers’ production functions and their importance in estimating economic impacts. Working Paper 14-15. Dyson School of Applied Economics and Management, Cornell University; King, R., M.S. Hand, G. DiGiacomo, K. Clancy, M.I. Gomez, S.D. Hardesty, L. Lev, and E.W. McLaughlin. 2010. Comparing the Structure, Size, and Performance of Local and Mainstream Food Supply Chains. ERR- 99. U.S. Department of Agriculture, Economic Research Service. 77 According to how these intermediaries are modeled within the IMPLAN framework, their inputs are actually only marginally different from other systems. This is due to the fact that when modeling wholesalers and retailers, we actually ignore the cost of goods sold and model the margins.
100 101 Case Study: Assessing the Economic Impacts of Local Food System Producers by Scale In a study of local food system producers in New York, researchers used primary data to modify IMPLAN in order to estimate the local economic impact of small- and medium-scale agricultural producers with direct farm sales compared to other agricultural producers. A team of researchers from Cornell University worked with extension agents from an 11-county region to collect expenditure and sales information from small and mid-scale producers that used direct to consumer marketing channels (labeled the SDA sector in table 7.1). The primary data demonstrated that small- and medium-scale direct agricultural producers have different expenditure patterns than other agricultural producers, both in terms of what they purchase and the percentage of purchases in the local economy. Using this data, the study created two agricultural sectors from the default agricultural sector in IMPLAN, one for small- and mid-scale farms that participate in direct marketing channels and one for all other producers. The different expenditure patterns of these two groups resulted in different economic impacts. The team found that whereas the SDA sector had higher associated employment and labor income multipliers compared to the non-small direct agriculture (NSDA) sector, the NSDA sector had larger total output and value added multipliers. The results underscore the importance of collecting appropriate data and modifying IMPLAN to outline the economic impacts of small- and medium-scale local food system participants on the local economy.78
Table 7.1: Multipliers for the Default Agriculture, Small Direct Agriculture (SDA), and Non-Small Direct Agriculture (NSDA) Sectors.79
Model 1 Model 2
Source: Schmit, Jablonski & Mansury (2013).
78 For more information, see: Schmit, T.M., B.B.R. Jablonski, and Y. Mansury. 2013. “Impacts of Local Food System Activities by Small Direct-to-Consumer Producers in a Regional Economy: A Case Study from Upstate NY.” Working Paper 13-16. Dyson School of Applied Economics and Management, Cornell University. 79 Capital District Region, New York State, 2010
100 101 elected to present a few average farms represented in examples of the ways in the default IMPLAN agricultural which researchers have sectors. Since the data in the successfully transformed default basic IMPLAN model represent IMPLAN modules for local food the weighted average values of research needs. production characteristics of From the examples the most common agricultural cited above, you can producers in a study area, the see how developing production functions may not a better understanding Customizing a “Local accurately reflect the structure of the purchasing and Food Farm” Sector of the local food supply chain. To sales practices of local food account for expected variations system participants is a vital step when focusing on local foods in quantifying their local economic Understanding how farmers who sell through local food markets producers and distributors, several impacts, as well as allocating these studies modify the default IMPLAN impacts properly across sectors. interact with other sectors of the economy is important in improving model by creating a new local food By augmenting the IMPLAN farm sector.80 Please note that such database with the data needed the precision of a local food system impact assessment. Since a modification is only a valuable to construct new sectors, and/or exercise if it accurately reflects modify existing sectors, you can local food system policies and interventions are often explicitly new economic flows not already more accurately reflect the local accounted for within the local economic impacts of local food designed to support the viability of local, smaller-scale farming, farm economy and the related system initiatives and participants. IMPLAN database. This will help local officials and many researchers, practitioners, community stakeholders design and policymakers are acutely targeted programs and policies interested in understanding the that accurately take local economic precise impacts resulting to this Data Needs for conditions and distribution effects industry sector. Sector Modification into account. Within IMPLAN, there are 14 The rest of this module outlines sectors related to agricultural You can easily add new sectors best practice approaches to production, as summarized above. to IMPLAN by finding one that is customizing IMPLAN and how In many cases, however, farms unpopulated in the local economy. to adjust the default features participating in local food systems In many parts of the U.S., for within the IMPLAN model to more are smaller, more diversified, example, there is no tobacco accurately reflect local food system and assume additional supply grown and thus the tobacco activity. Rather than providing chain functions – e.g., doing their farming sector can be used for a step-by-step guide, we have own marketing, processing, and this purpose. This sector can be distribution – compared to the renamed and populated with
80 See: Gunter, A. and D. Thilmany. 2012. “Economic implications of farm to school for a rural Colorado community.” Rural Connections: A Publication of the Western Rural Development Center, 6(2): 13-16 Haynes, M. 2010. Farm-to-School in Central Minnesota - Applied Economic Analysis. Minneapolis, MN: Center for Urban and Regional Affairs, University of Minnesota. Available at: http://www.cura.umn.edu/publications/catalog/cap-144; Schmit, T.M., B.B.R. Jablonski, and D. Kay. 2013. Quantifying the Economic Impacts of Food Hubs. Cornell University. http://dx.doi.org/10.9752/MS145.09-2013; Schmit, T.M., B.B.R. Jablonski, and Y. Mansury. 2013. “Impacts of Local Food System Activities by Small Direct-to-Consumer Producers in a Regional Economy: a Case Study from Upstate NY.” Working Paper 13-16. Dyson School of Applied Economics and Management, Cornell University.; and Swenson, D. 2006. The Economic Impacts of Increased Fruit and Vegetable Production and Consumption in Iowa: Phase II. Ames, IA: Iowa State University, Leopold Center for Sustainable Agriculture. Available at: http://www.leopold.iastate.edu/pubs-and-papers/2006-05-fruit- and-vegetable-production-phase-two
102 103 information to more accurately easy task to accomplish. Modifying Case Study: Imputing reflect the local food farm sector. the IMPLAN model based on Key Expenditure Items Given that this new sector starts data from non-generalizable into IMPLAN to out empty, it must be populated surveys or incomplete population Create Alternative with data. Those new data can enumerations may not yield Production Functions come from primary research (your results based on sound regional interviews of local producers, for industrial accounting. Therefore, In the absence of primary data example), secondary research, it is important to ensure that such on employee compensation or through creative modification surveys are as representative of expenditures for farms that of existing production functions the targeted local producer or participate in farm-to-school in the IMPLAN model altered to processor population as possible. programming in Colorado, represent production scenarios or Relying exclusively on convenient Gunter and Thilmany (2010)81 scales different than the default sources of data, such as a small used an average of the average values. The reality is that sample of program participants or percentage of employment sometimes key expenditures must advocates, will likely be inadequate from the food and beverage be imputed. in documenting operational costs retail sector and the vegetable, fully and can lead to economic melon, and fruit farming sector Although some data exist from distortions when those data are when they created a new secondary sources that you can run through I-O models. For more “farm-to-school producer” use to modify IMPLAN, in many information on primary data sector in IMPLAN. They made cases, you will need to augment collection and rigorous survey this decision based on the available data sources by collecting techniques, see module 3. assumption that the average additional information from the farm-to-school agricultural food system businesses you are producer likely grows and sells modeling (i.e., farmers, food hubs, his or her own products, and buyers). The goal of the primary Customizing IMPLAN thus they wanted to capture data collection is to come up the assumed marketing with an average local food farm This next section outlines the basic activities as a proxy for expenditure profile that can then information you need to know retained transaction costs. be increased by the total number in order to make appropriate Likewise, Hughes et al. (2008)82 of farms in the study area to create customized changes within modified the default value the local food farm sector within IMPLAN software.83 added components in the the IMPLAN model. We warn you relevant agricultural sectors at the outset that this is not an within IMPLAN to reflect that most farmers selling at West Virginia’s farmers markets were small and had a non- 81 http://coloradofarmtoschool.org/colorado-farm-to-school-task-force/. corporate structure. In their 82 Hughes, D.W., Brown, C., Miller, S., and McConnell, T., 2008. “Evaluating the economic impact assessment economic impact of farmers markets using an opportunity cost framework.” Journal of they increased payments Agricultural and Applied Economics, 40(1):253–265. 83 This section is only intended to provide a conceptual overview of how these to proprietor’s income and advanced modifications are done within the IMPLAN database. For a step-by-step reduced payments to other guide, including screen shots, of how to make these changes, we recommend you refer property type income. to Schmit, T.M., B.B.R. Jablonski, and D. Kay. 2015. A Practitioner’s Guide to Assessing the Impacts of Regional Food Hubs. U.S. Department of Agriculture, Agricultural Marketing Service. Though this guide refers to food hubs specifically, the principles can be applied to a wide variety of local food systems and enterprises.
102 103 Study Area Data84,85 and value-added) of the FBLF After customizing a new FBLF sector, but also its local inter- sector within the IMPLAN model, The proper specification of the industry linkages. These linkages the appropriate farm sectors (e.g., appropriate study region is help to measure net impacts fruit farming, vegetable and melon discussed in module 5. The study because they allow the model to farming, dairy farming) should area should contain the intended assess whether some economic be reduced by the corresponding population of producers and their activity that previously “leaked” determined amount. This is primary labor resources and the from the region is now captured important because the FBLF supply territory of their industrial due to the different business sector expenditures and sales are inputs. It should not be so large strategies and expenditure already accounted for within the as to over-describe primarily patterns associated with the farm IMPLAN database, and this will localized effects, and it should not enterprises participating in local ensure that you are not double be so small as to fail to capture food supply chains. counting. If, for example, you 86 key linkages. Properly specified are adding $1 million in output, study area data should provide There are three parts involved in along with all jobs and payments information about the total size of modifying the industry production to labor and proprietorships, to a the sector broken down into the values within IMPLAN: newly itemized “FBLF” vegetables following categories: production sector that you 1. Customizing the industry’s • Number of employees87 created based on your primary average expenditure patterns and secondary data collection, • Total output (value of (i.e., the gross absorption you should then subtract those production, usually measured coefficient for each industry exact values from the aggregated in gross sales) sector from which the farm vegetable and melons sector so sector purchases product); that the area of the economy • Value-added (employee producing those commodities is compensation, proprietor 2. Customizing the commodity production to ensure that the same as before the addition of income, other property the FBLF sector modifications. type income, and indirect it reflects the products production taxes). (commodities, in IMPLAN’s language) produced by the Customizing Other Sectors FBLF sector; and Industry Production Though the above description 3. Customizing the trade flows to focuses on modification to a FBLF Next, you need to modify the reflect the portion of products sector, you can follow the same expenditure pattern of the farm- (i.e., commodities) purchased type of approach to modify other based activity portion of the local by the FBLF sector from local industry sectors. Swenson, for food (FBLF) sector. In other words, sources (e.g., modifying the example, was interested in looking it is not just important to know the regional purchase coefficients, at the specific economic impact total size (employment, output, or the percentage of of small-scale meat processing total intermediate expenditures, expenditures by the sector firms in Iowa, compared to the procured locally).
84 All of the modifications can be done outside of the IMPLAN software by exporting the IMPLAN industry-by-industry database. However, this requires specialized training, and thus this protocol describes changes within the IMPLAN software itself. 85 Note that anything that gets added to your new sector should be subtracted from at least one existing sector. This is important, as the local food farm expenditures and sales are already accounted for with the IMPLAN database. 86 For more information about defining the local study area, and especially about the concept of a functional market area, see: Schmit, T.M., B.B.R. Jablonski, and D. Kay. 2015. A Practitioner’s Guide to Assessing the Impacts of Regional Food Hubs. U.S. Department of Agriculture, Agricultural Marketing Service. Functional market area definition begins on page 8. 87 Within IMPLAN, the number of employees or jobs refers to the number of positions in a sector, not the number of employed persons. As many people have more than one job, there are almost more jobs than employed people in the economy. In addition, there are significant qualitative differences among the different sectors; for example, jobs in manufacturing are much more likely to be full-season, full-time jobs, whereas many jobs in retail may be part-time or seasonal positions.
104 105 can simply shock that sector of IMPLAN by the number of jobs (or total value of employee compensation) in that sector to estimate the multiplied-through economic contribution of that sector to the regional economy. Please note that there are multiple dimensions to local foods analysis that have potential for informing policy and program development. For example, you may wish to Puget Sound Meat Producers Cooperative was founded because small livestock producers’ livelihoods were threatened by having to travel long distances to slaughterhouses. identify the specific activities The Washington based slaughter unit operates at three venues on a weekly or semi- that exist among producers, weekly schedule. distributors/ sellers, and different types of local consumers. larger, more dominant meat these plants were not as efficient Alternatively, you may wish to processors in the same State.88 and did not make as significant a analyze each component of local Based on Census of Employment contribution to the local economy foods production, distribution, or and County Business Patterns as one would imagine based on marketing transactions separately data, he discovered that small jobs created per animal units in order to isolate the relative processor operations were much harvested alone. economic contributions of local more labor intensive than larger foods development at different operations, and that returns stages of the supply chain. to labor were much lower. This necessitated compiling a “small Impact Assessment meat processing” sector that was fundamentally different than the Whether or not you use a Analysis-By-Parts default sector in IMPLAN, so that customized FBLF sector or a more the incremental gains or losses disaggregated one in your analysis For certain value-added businesses in that new sector would be you have a couple of choices about that have emerged to meet the properly reflective of that subset how to use IMPLAN appropriately demand for local food, it is not that of the industry. It is important to in order to analyze the local straightforward a task to define note that although the local meat economic impact that results from the appropriate industry sector(s) processing sector produced more local food system activity. If you and linkages with other industries. “jobs” per animal units harvested, use a customized FBLF sector, you For example, trying to create an
88 Swenson, D. 2011. Exploring Small-Scale Meat Processing Expansion in Iowa. Ames, IA: Iowa State University, Leopold Center for Sustainable Agriculture. Available at: http://www.iowameatprocessors.org/LeopoldExpan.pdf
104 105 entity similar to the food hubs commonly called a “bill of goods” • Payments to the value added industry sector within IMPLAN is approach. Under this approach, components91 complicated. While in some cases the analyst enters the expenditures a food hub’s expenditure pattern (inputs) for local foods producers • Other institutional purchases is similar to that of the “transit by or distributors into the modeling (such as payments to truck” sector (335), in many cases system sequentially, in lieu of households or government a food hub takes on additional entering an output change for purchases). supply chain functions that the overall sector. Conceptually, require a different mix of inputs the component expenditures of Total outlays should equal total (i.e., food hubs may also function ABPs represent the first round of outputs such that all sales by the as processors). The implication indirect inter-industry purchases business are distributed to the for an impact assessment is that and payments to value added three components above. additional information must be made by the food hub that trigger collected to develop a food hub additional indirect and induced Figure 7.2 demonstrates an ABP sector, or to describe the nature of effects. The initial change in final set-up, allocating $100,000 in all of its transactions. demand modeled for food hub hypothetical outlays by a regional products represents the direct producer. The first data column As described in detail effect; combining this with the contains the hypothetical market in their “Assessing estimated indirect and induced value of input purchases. The the Economic effects determines the total effect. second data column allocates the Impacts of relevant percentage of those input Regional Food Defining the scope of a value- expenditures to suppliers within Hubs: the Case added business to be modeled the regional economy (assuming of Regional using an ABP approach within that the remainder leaks outside of Access” report, IMPLAN requires detailed data on the region). If the ABP information Schmit et al.89, the enterprise’s annual outlays, contains data on within-region propose utilizing including: purchases, then the local purchase an analysis by parts percentages can be set to 100 (ABP)90 approach in • Purchases by the business percent. It is important, though, these situations. from each major industry in the absence of information This is also sector, along with the confirming such, that purchases proportions of those not be set to 100 percent unless expenditures that are the data support that conclusion purchased within the defined because that would artificially local economy inflate the impact summaries.
89 Schmit, T.; Jablonski, B.; and Kay, D. 2013. Assessing the Economic Impacts of Regional Food Hubs: The Case of Regional Access. Cornell University. Available from: https://www.ams.usda.gov/sites/default/files/media/Accessing%20the%20Economic%20 Impact%20of%20Regional%20Food%20Hubs%20The%20Case%20of%20Regional%20Access%20Presentation.pdf 90 See IMPLAN’s Case Study: Analysis-By-Parts for more information: http://implan.com/index.php?option=com_ content&view=article&id=730:case-study-analysis-by-parts&catid=264:KB43 91 IMPLAN allows payments to labor income or to households as separate items of analysis. It does not, however, accommodate other payments to value added, such as payments to investors or indirect tax payments as activities that are amenable to an APB framework.
106 107 Figure 7.2. Hypothetical Example of Analysis by Parts for $100,000 of Inputs
Source: IMPLAN
To complete the ABP, you also impacts of local food systems. To • Customizing a local foods need to produce a table of do so requires the substitution sector in lieu of broad payments to workers (earnings) of local knowledge, additional aggregations contained within as well as payments to the farmer research, or outright supposition. the modeling system to (proprietors’ incomes). The The value of the tool reflects include creating new sectors sum of the intermediate inputs the quality of our insights and that describe local foods- plus the payments to labor will conscientiousness in producing producing actors; constitute all indirect and induced our estimates. Accordingly, it is activity associated with your study imperative that our methods, • Procuring reliable and situation. You will then add the assumptions, and modifications defensible data to populate original direct data (farm sales, be transparent and grounded in your model; payments to workers and other reality, just like any other social • Developing a coherent value added components, and science research method. scenario of change, to include jobs) to the previously created considering all gross gains, summaries to round out the offsets, and net outcomes; economic analysis. Takeaways and • Using alternative approaches, This module emphasizes the like Analysis by Parts (ABP), to Conclusion importance of: compile participants’ regional economic linkages. Ultimately, the decision to go to • Competently manipulating an the extra trouble to customize a IMPLAN model to adequately Finally, this module suggests sector within IMPLAN is up to you, evaluate a local economic analysts should be very and depends on the goals of your activity to include evaluating transparent and open with their study, expertise, and available the adequacy of the baseline procedures and assumptions so resources. Perhaps the most data for your region of that methods can be replicated important thing to keep in mind assessment; and appropriately modified to suit is that IMPLAN is both a powerful • Distinguishing between local conditions, the scope of local and blunt tool. IMPLAN data and measuring regional economic food economic impact assessment software (and IO/SAM models effects or contributions versus work can be expanded, and the more generally) are used to measuring incremental gains quality and rigor of local foods produce reasonable and defensible to regional productivity; economic impact assessment can approximations of the economic be improved.
106 107 108 109 Glossary of Terms
Agglomeration Agglomeration is the idea that proximity to competitors and suppliers has become an increasingly important consideration for companies, especially newer firms, when deciding where to locate. Agglomeration can be described as industry clusters within a single geographic area. Examples of agglomeration include the computer technology industry in Silicon Valley, CA, or the wine industry in Napa Valley, CA.
Analysis by parts (ABP) Analysis by parts (ABP) is also called “bill of goods” analysis. It is a type of input- output analysis that specifies each individual intermediate input associated with a project rather than the total output change in the project.
Attributes Attributes are qualities or features regarded as a characteristic or inherent part of someone or something.
Backhaul Backhaul is the return trip of a vehicle transporting cargo or freight. To backhaul is to have cargo in both directions of the trip.
Beggar-thy-neighbor Beggar-thy-neighbor is a dilemma where localized gains come at the expense of other regions. In classical economic terms, everyone becomes worse off if this behavior is carried to its extreme because the benefits of comparative advantage in trade are thwarted when everyone acts only to maximize local production.
Bill of goods Bill of goods analysis is a type of input-output analysis that specifies each individual intermediate input associated with a project rather than the total change in the project.
Bivariate analyses Bivariate analysis is one of the simplest forms of analysis involving the analysis of two for the purpose of determining the empirical relationship between them. Bivariate analyses are most often used to answer questions about differences in responses among various segments of a survey population.
Buy local Buying locally is a form of import substitution. Higher incidences of within- region purchases prevent sales leakages for imports and therefore add income to a region.
Causality Causality is the relation between an event and a second event, where the first event is understood to be responsible for the second.
Census A census is an official count or survey of a population, typically recording various details of individuals.
Cluster A cluster is a concentration of related industries in a particular area, and includes the companies in the industry as well as those who support the industry, such as suppliers, service providers, and relevant government agencies.
108 109 Contribution analysis Contribution analysis is the gross changes in a region’s existing economy that can be attributed to a given industry, event, or policy.
Convenience sampling Convenience sampling is a technique that does not involve random sampling or other probability sampling methods. A convenience sample is made up of subjects that are the easiest to locate.
Countervailing effects Countervailing effects (offsets) refer to the idea that gross gains in production of one good must be balanced against the fact that these shifts will usually cause shifts away from production of other goods.
Development Development is investments, strategies, and policies that aim to improve prosperity, typically by creating and/or retaining jobs, supporting higher incomes, or growing tax base.
Dillman Method The Dillman Method is an approach to obtaining responses to surveys. This approach consists of using an introductory letter, a printed survey with an addressed stamped return envelope, and a series of reminder postcards. It is a commonly used method in mailed surveys.
Dimensions Dimensions are aspects or features of a situation, problem, or thing.
Direct impacts Direct impacts are those economic impacts associated initially with the economic change that is being measured, i.e., the output of a new enterprise, the labor incomes paid in that enterprise, the expected total value added, and the number of jobs (also see backward linkages). (See input-output analysis).
Economic contribution An economic contribution is a gross change in a region’s existing economy that can be attributed to a given industry, event, or policy
Economic impact An economic impact occurs when a measured scenario demonstrates net gains to a regional economy. An economic impact occurs when there are substitutions for previously imported goods (import substitution) or the region is able to export goods or services to external buyers.
Exports Exports are sales to buyers outside of a region. Exports can be to a neighboring region, the rest of the State, the rest of the country, or to other countries. Export sales reflect production that is in excess of local demand and is therefore available to the rest of the world. Export sales are the key manner in which regional economies expand. Final demand Final demand is the bundle of goods or services that are not sold as intermediate inputs and ultimately go to final users. The final users in input- output analysis include sales to households, governments, capital, and exports. For input-output accounting purposes, final demand does not add more value added to a commodity within the region of analysis.
110 111 Firmographic A firmographic is a compiled set of characteristics of organizations or business firms that describes the qualities of these entities. This is a correlate of demographic data that helps to portray the characteristics of a population of people.
Fiscal impact A fiscal impact, positive or negative, occurs when industrial activity levels change in an area. When there is new production, and by extension new labor demands, capital investment, and higher levels of inter-industrial transactions, there will be tax and service use consequences for local and for State government. If a project produces a net economic impact for a region such that there are gains in regional production, that project will also generate positive fiscal consequences provided it and the labor created by the project generate tax payments in excess of their collective demands for local or State government services.
Fixed-price models Fixed-price models assume that all interrelationships between industries and other economic institutions (households, governments, capital) are fixed, and that all coefficients into production, such as inputs, capital, and labor, are static. For every industry represented in the model, the input and labor requirements per dollar of output do not change even if there are price changes in the economy, such as would be the case with, for example, an energy price shock or a shortage of a particular agricultural commodity caused by drought.
Functional economic area A functional economic area is a semi self-sufficient economic unit. It includes the places where people live, work, and shop. It can sometimes be identified by physical or other characteristics.
Gross absorption coefficient The gross absorption coefficient is the total amount of any commodity or service required for the production of the selected industry’s products before netting out the share procured locally versus those purchased elsewhere.
Growth Growth is an increase in the market value of goods and services sold, or of the capacity to produce them, over a period of time.
Impact assessment/analysis An impact assessment is the process of identifying the anticipated or actual impacts of a given change on those social, economic, and/or environmental factors which the change affects.
Import substitution Import substitution is a key justification for local foods initiatives as it isa strategy that has the potential to both retain dollars within a region, and create a multiplier effect from new production. In classical economics, all import purchases result in a reduction in regional incomes. When local goods are substituted for imported goods, regional incomes grow.
Indirect impacts Indirect impacts reflect the multiplied-through estimate of intermediate inputs required to satisfy the original project scenario. (See input-output analysis)
110 111 Induced impacts Induced impacts accumulate when all workers in the scenario (the direct workers and the indirect workers, initially) convert their labor incomes into household spending on local goods and services, thereby inducing another round of regional economic activity. (See input-output analysis)
Input coefficients Input coefficients are the dollar value of a commodity an industry requires directly to produce a dollar of output. It is also referred to as the direct requirement coefficient.
Input-output model Input-output models process regional, State, or national tables of inter- industrial transactions (linkages) to generate industry- specific multipliers. They are used to project region-specific economic consequences of industrial expansion, contraction, or changes in household incomes.
Intercept surveys/sampling Intercept survey/sampling is a form of surveying that occurs when a selection of people is interrupted during their normal activities to collect their responses to questions.
Intermediate inputs Intermediate input are all goods or services that are used as inputs in the production of a commodity. All businesses have supply requirements that are met in part by regional suppliers and in part by external suppliers. The magnitude of within-region purchases of intermediate goods partly determines the size of multipliers that industries will have in a regional economy. That is, all else equal, the more that local businesses buy locally, the larger the multiplier will be.
Intermediate purchases Intermediate purchases are purchases of goods and that are used for the production of other goods and services rather than for final consumption. These inputs are sometimes referred to as current-account expenditures. They do not include any capital-account purchases nor do they include inputs from the primary factors of production (labor and capital) that are components of value added.
Key informants Key informants are those who have substantial knowledge about your subject of interest.
Labor income Labor income in input-output models is composed of wages, salaries, and employer-supplied benefits (social insurance contributions, health care, and retirement). Labor income also includes the salaries proprietors pay themselves for managing their businesses.
Leakage Leakage is the outflow of income, resources, or capital from a given economy.
Likert scale The Likert scale is a method of ascribing quantitative value to qualitative data, in order to make it amenable to statistical analysis. A numerical value is assigned to each potential choice.
112 113 Linkage Linkage refers to the degree to which one industry depends on commodity, capital, and service inputs from other regional industries.
Location quotient A location quotient is a technique used to compare the industrial activity levels among different areas of the country. Location quotients are ratios that allow you to compare the concentrations of a resource or specified activity to that of a larger area such as a State or the Nation as a whole. A comparison of location quotients can help to identify sectors of opportunity that may serve to deepen the contributions of the food system to the broader economy.
Margining Margining is the process of applying margins. Margins are the value of the wholesale and retail trade services provided in delivering commodities from producers’ establishments to purchasers. Margin is calculated as sales receipts less the cost of goods sold. It consists of the trade margin plus sales taxes and excise taxes that are collected by the trade establishment
Mind map A mind map is a visual representation of hierarchical information that includes a central idea surrounded by connected branches of associated topics.
Multiplier A key component of input-output analysis is the production of multipliers that indicate the extent of linked economic activity within a study region resulting from a change in production in a sector of the economy. These multipliers are produced using the Leontief Inverse procedure for processing an original social accounts matrix (SAM). The Leontief Inverse is, in turn, based on the strength of internal industry linkages (see intermediate demand and household demand). In the input-output modeling process, multipliers are created for industrial output, and all of the elements of value added (labor income, returns to proprietors, investment income, and indirect tax payments). Job multipliers are econometrically estimated separately and added to the model. Output models are usually reported per one dollar of industry sales or output; i.e., a $1 increase in sales by industry A will lead to a $1.50 increase in sales or output throughout the local economy.
Non-random sample A non-random sample is any sampling method where some elements of the population have no chance of selection, or where the probability of selection cannot be accurately determined.
Opportunity cost In general economic terms, opportunity cost represents the next best alternative or the opportunity foregone when making a specific choice. For example, if a farmer decides to convert conventional commodity crop acres for soybeans into vegetable production, the opportunity cost of that choice would be the value of using that land for soybean production.
Output Output is the value of production for an industry over the course of a year. Output is usually measured in producer prices, and the value of all inputs into production equals the value of all outputs in an input-output model. For most simple scenarios, output is more or less gross expenditures over the course of a year, including all value added payments (profits are part of value added payments).
112 113 Primary data Primary data are those data that are collected firsthand by a researcher making direct contact with a given population.
Production function Production function is an equation that expresses the relationship between the quantities of productive factors (such as labor and capital) used and the amount of product obtained. It states the amount of product that can be obtained from every combination of factors, assuming that the most efficient available methods of production are used.
Qualitative Qualitative data are differences in essential qualities between two objects or samples that cannot be expressed as a number.
Quantitative Quantitative data are data that can be expressed as a number or a quantity.
Quota sampling Quota sampling is a non-probability sampling technique wherethe assembled sample has the same proportions of individuals as the entire population with respect to known characteristics, traits or focused phenomenon.
Random sampling Random sampling is any method of sampling that selects its subjects based on the probability that they were chosen randomly rather than as a result of bias. In order to have a random selection method, a process or procedure must be developed that assures that the different units in the population have equal probabilities of being chosen, so that neither a limited data set, nor the viewpoint of the researcher, dictates what or who is selected for sampling.
Rapid market assessments Rapid market assessments (also known as dot poster surveys) were developed at Oregon State University to gather information from farmers market patrons. To use this relatively simple method, closed-ended questions are written on large flip charts. Respondents are given a strip of colored dots to place on the corresponding answer. Regional purchase coefficients A regional purchase coefficient (RPC) is the proportion of the total demand for a commodity by all users in the study area that is supplied by producers located within the study area. For example, if the RPC for the commodity is 0.8, then 80 percent of the demand by local fish processors, fish wholesalers, and other fish consumers are met by local fish producers. Conversely, 20percent (1.0-RPC) of the demand for fish is satisfied by imports.
Resource constraints Resource constraints are a limit or restriction on the amount of resource available.
Return on investment Return on investment (ROI) refers to the generation of earnings on an investment such that all costs of production are covered, including a normal return to investors. ROI is expressed as an annualized value. Input-output models do not produce information that informs ROI calculations.
114 115 Scenario The scenario reflects the conditions under which an economic change is purported to occur in input-output analysis. It could involve the introduction of a new industry, an expansion or contraction in production of a commodity, or a set of inter-related activities associated with a policy or project proposal. Proper specification of the scenario is a key step in analysis.
Secondary data Secondary data are primary data that are summarized for reporting purposes.
Shock A shock is an event that affects an economy, either positively or negatively.
Significant difference A significant difference (statistical significance) is a difference between two groups that cannot be explained away by chance alone.
Snowball sampling Snowball sampling is a non-probability sampling technique where existing study subjects recruit future subjects from their acquaintances.
Social Accounting Matrix In IMPLAN language, a social accounting matrix (SAM) is the primary table used in an input-output model. It is a comprehensive accounting of the sales and purchases made by industries, households, and other critical institutions in an economy.
Social network analysis Social (commercial) network analysis is a mapping and measuring of relationships and flows between people, groups, organizations, and business entities. The nodes in the network represent some form of “active” relationship (commercial, project, programming). This visual and mathematical analysis of human and business relationships can help researchers conceptualize the breadth and depth of networks.
Spillover Spillover effects are economic events that occur in one context because of another external event.
Study area Study areas reflect the area in which the primary economic activity is taking place. The study area should be no larger than the territory within which the majority of direct value added payments accumulate.
Type I multiplier A type I multiplier measures the direct and indirect effects of a change in economic activity. It captures the inter-industry effects only, i.e., industries buying from local industries.
Type II multiplier A type II multiplier captures the direct and indirect effects. In addition to the inter-industry effects, the Type II also takes into account the income and expenditures of households. The household income and the household expenditures are treated as industries. This internalizes (endogenizes) the household sector, including the induced or household spending effects.
114 115 Value Added Value added in input-output analysis is made up of labor incomes paid to workers, income paid to capital investment or profits (e.g., payments to proprietors for their management, payments to investors), and indirect tax payments (that is, taxes that are included in the purchase price, such as sale or excise taxes and property taxes) that are part of the production process.
Variable A variable is a quantity capable of assuming any of a set of values.
116 117 Photo Credits
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