Research Shows Organic Agriculture Boosts Local Economies

Staff Writer
From foodtank.com, by Lani Furbank
Research Shows Organic Agriculture Boosts Local Economies

The organic industry is one of the fastest-growing sectors of the United States food industry. Organic food sales grew 11 percent to almost US$40 billion in 2015, according to the Organic Trade Association (OTA), while the food market as a whole had a 3 percent growth rate.

This growth is partly because organic crops command a premium price over conventional crops—as demand for organic food rises, so does the interest in organic production from farmers and producers.

For the first time, there is now evidence linking organic agriculture and economic health. Today, OTA released new research finding that organic agriculture boosts local economies and that organic production creates long-lasting regional economic opportunities.  

The white paper, titled “U.S. Organic Hotspots and their Benefit to Local Economies,” was compiled for the OTA by Dr. Edward Jaenicke, an Agricultural Economist at Pennsylvania State University. It finds that organic hotspots—defined as counties with high levels of agricultural activity whose neighboring counties also have high organic activity—boost median household incomes by an average of US$2,000. They also reduce poverty levels by an average of 1.3 percent. Organic hotspots exist across the country, but a few examples include Monterey County in California, Huron County in Michigan, Clayton County in Iowa, and Carroll County in Maryland.

In addition, the report finds that organic agriculture has a greater beneficial economic effect than general agriculture. It also has a more positive impact than some anti-poverty programs.   

The research shows that organic agriculture can also be used as an economic development tool for policymakers. As a result, the white paper made five policy recommendations, which included promoting organic agriculture at the federal, state, and local level; focusing on rural development, organic transition, capital structures, and barriers to investment; and targeting specific geographic areas for development.

Read the full report here.