Consumers often cite supporting the local economy as a reason why they purchase locally produced foods. To find out whether there is such an impact, a University of California Cooperative Extension team interviewed producers engaged in direct marketing to measure the economic impact of local food marketing in the Sacramento Region Their key findings indicate that, for every dollar of sales, local direct marketers are generating twice as much economic activity within the region, as compared to producers who are not involved in direct marketing. Here are the highlights of their findings:
- Sacramento Region direct market producers averaged $164,631 in sales per producer, ranging from $2,141 to $4,620,000.
- Of the direct market producers’ total revenues, 44 percent were generated through direct channels.
- The direct market producers’ annual production and marketing expenses averaged $155,235 in 2013.
- Eighty-nine percent of the inputs used by the region’s direct marketers were purchased within the region.
- The regional output multiplier for the direct marketers is 1.86, compared to 1.42 for the region’s producers who were not involved in direct marketing. This means that the direct marketers generate $0.44 additional output within the Sacramento Region for every dollar of production, when compared with producers not engaged in direct marketing. The greater economic impact of direct market producers is primarily attributable to the much larger percentage of their inputs being purchased within the region (89 percent versus 45 percent). The direct marketers’ indirect effect is .41, compared to only .09 for the producers not engaged in direct marketing.
- The Sacramento Region direct marketers have a job effect of 31.8, compared to 10.5 for the producers who were not involved in direct marketing. This means, that for every $1 million of output they produce, the direct marketers are generating a total of 31.8 jobs within the Sacramento Region, while producers not engaged in direct marketing only generate 10.5 jobs.
For the full report, see: Economic Impact of Local Food.
NOTE: Nationally, less than 1% of agricultural products are sold directly from farmer to consumer. In the Pioneer Valley of western Massachusetts, that figure is closer to 10%! While is is good, it also means that 90% of the people in the region do not buy local!
If we want to encourage economic prosperity in our own region, we need to buy more local food!
The Sustainable Food and Farming major at UMass Amherst helps prepare people to build a local and sustainable food system.