Organic hotspots boost median household incomes

Organic hotspots boost median household incomes

Organic Trade Association White Paper contains five policy recommendations.

The recently completed White Paper, titled “U.S. Organic Hotspots and their Benefit to Local Economies,” finds organic hotspots–counties with high levels of organic agricultural activity whose neighboring counties also have high organic activity–boost median household incomes by an average of $2,000 and reduce poverty levels by an average of 1.3 percentage points. The White Paper was prepared for the Organic Trade Association (OTA) by Penn State Agricultural Economist Dr. Edward Jaenicke.

Related: Number of organic operations grows by 12%

Study finds organic hotspots boost median household incomes by an average of $2,000 and reduce poverty levels by an average of 1.3 percentage points. (Photo: Ljupco/Thinkstock)

“Organic agriculture can be used as an effective economic development tool, especially in our rural areas,” said Laura Batcha, CEO and executive director of OTA. “The findings of this research show organic certifiers and the transfer of knowledge and information play a critical role in developing organic. And it provides policymakers with an economic and sound reason to support organic agriculture and to create more economy-stimulating organic hotspots throughout the country.”

Organic is one of the fastest-growing sectors of the U.S. food industry. Organic food sales jumped by 11% to almost $40 billion in 2015. Organic crops command a price premium over conventionally grown crops. As a result, interest in organic at the production level has grown as the demand for organic has risen. More farmers are transitioning to organic production, more organic businesses are sprouting.

Related: Organic industry sales grew by nearly 11%

But what does all this interest in organic and organic activity mean for local economies?

“This research systematically investigates the economic impacts of organic agriculture,” noted Jaenicke. “Its important findings show that organic contributes to the economic health of local economies. The growing market interest in organic agriculture can be leveraged into effective policy for economic development.”

Findings, implications

The White Paper summarizes and discusses three research papers that investigate organic agriculture hotspots in the U.S. and systematically assesses the impact of organic agriculture on local economies. It identifies 225 counties across the United States as organic hotspots, then looks at how these organic hotspots impact two key county-level economic indicators: the county poverty rate and median household income.

Organic hotspots are as diversified as the organic industry, and represent the various kinds of organic agricultural activity and accompanying businesses: crop production, livestock production, organic processors.  Organic hotspots are found throughout the country, but specific examples of organic hotspots include Monterey County in California, Huron County in Michigan, Clayton County in Iowa, and Carroll County in Maryland.

The White Paper also identifies what factors create organic hotspots, how the effect of organic agricultural hotspots compare with those of general agriculture (combined organic and conventional agriculture), and recommends specific policies to foster more organic economic hotspots throughout the nation.

The research contained five policy recommendations:

-Promote organic agriculture at the federal, state and local level.

-Focus on rural development, organic transition, capital structures and barriers to investment.

-Expand outreach efforts and facilitate network effects.

-Target specific geographic areas for development.

-Build broader coalitions to help promote organic agriculture.

Related: Money available to make organic certification more affordable

Source: Organic Trade Association

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