Record cash receipts over the past couple of years attest to the growth of Kentucky’s agriculture economy, with its overall impact to the state’s wider economy following suit.
Now a new study from the University of Kentucky that takes a broad look at the ag industry is offering some interesting insights.
The Community and Economic Development Initiative of Kentucky (CEDIK) study found agriculture’s total impact on Kentucky’s economy equaled $45.6 billion in 2013, an 8.3 percent increase over 2007’s figures, according to information released by UK.
The report is based on three agricultural activities, including on-farm production, processing and agricultural inputs.
CEDIK Executive Director Alison Davis, an associate professor at the UK College of Agriculture, Food and Environment’s Department of Agricultural Economics, co-authored the report. She said the purpose of the study was to look at agriculture in a more comprehensive way and not just look at on-farm employment.
“There can be a miscomprehension that, because there is not a significantly large number of on-farm workers, agriculture is an insignificant contribution to the state’s economy,” she said. “Agriculture has a broader scope than just on-farm employment, and this study illustrates that.”
The report found the entire agriculture industry accounts for nearly 8 percent of Kentucky’s economy and employed about 136,000 workers, or 5.6 percent of employment in state industries.
The report also found that market value of farm products and farm-related incomes rose between 2007 and 2012, even as the number of Kentucky farms fell by 9 percent and acreage used in production dropped by 6.7 percent.
In fact, the latest census by U.S. Department of Agriculture showed that Kentucky led the nation, percentage-wise, in the decrease of farms during that same period. However, the census numbers also showed an increase in the size of farms, from an average of 153 acres in 1997 to 169 acres in 2012.
“For every job within the agricultural inputs sector, an area that includes such things as fertilizer, feed and pesticides, 2.71 other jobs were created,” the study says. “Within the production sector, $8.09 was generated for every dollar spent to grow vegetable and melon crops, while cattle ranching generated an additional 43 cents and oilseed and grain crops generated an additional 44 cents from every dollar spent.”
While this study shows that agriculture may not be the biggest industry in the state, it is still an important one. “Though it’s only 8 percent of the state’s total economy; that’s not a trivial amount,” Davis said. “It’s important that Kentucky focuses on a diverse economy, and agriculture has an important part to play in that.”
The last economic impact study was conducted in 2007. To see the entire study, go online at http://cedik.ca.uky.edu/fi les/REPORT_Importance_ of_Ag_KY_2015.pdf.