Friday, November 4, 2011

High Food Prices = Riots

The New England Complex Systems Institute generated a recent report "The Food Crises and Political Instability in North Africa and the Middle East" that shows a solid correlation between rising food prices in 2008 and 2011 and global riots. Here is a striking graphic from that report (click on image for larger version):
The black line shows the rising price of food over time. The red lines are when riots broke out around the world marked by the country (and in parentheses the related deaths). The blue line is when the institute reported their finding to the US government.

Source: Lagi, Bertrand, Bar-Yam, "The Food Crises and Political Instability in North Africa and the Middle East", New England Complex Systems Institute,, viewed Sept. 26, 2011 

Friday, October 8, 2010

The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP

The USDA just released a study of the impact of stimulus funds spending on economic activity involving the Supplemental Nutrition Assistance Program (SNAP).

From USDA's webpage for The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP:
USDA’s Economic Research Service uses the Food Assistance National Input-Output Multiplier (FANIOM) model to represent and measure linkages between USDA’s domestic food assistance programs, agriculture, and the U.S. economy.

From the report summary:
IOM and macroeconomic models have been used for assessing the multiplier effects from government expenditures authorized under the American Recovery and Reinvestment Act of 2009 (ARRA), a Federal response to the recession that began in 2008.

What did they find?
The FANIOM analysis of SNAP benefits as a fiscal stimulus finds that:
  • An increase of $1 billion in SNAP expenditures is estimated to increase economic activity (GDP) by $1.79 billion. In other words, every $5 in new SNAP benefits generates as much as $9 of economic activity. This multiplier estimate replaces a similar but older estimate of $1.84 billion reported in Hanson and Golan (2002).
  • The jobs impact estimates from FANIOM range from 8,900 to 17,900 full-time-equivalent jobs plus self-employed for a $1-billion increase in SNAP benefits. The preferred jobs impact estimates are the 8,900 full-time equivalent jobs plus self-employed or the 9,800 full-time and part-time jobs plus self-employed from $1 billion of SNAP benefits (type I multiplier).
  • Imports reduce the impact of the multiplier effects on the domestic economy by about 12 percent.
Source:, viewed Oct 8, 2010

Wednesday, July 28, 2010

Farm Aid makes the Economic Case

Farm Aid just released a report, Rebuilding America’s Economy with Family Farm-Centered Food Systems, that works to make the economic case for family farming. The report holds it's own set of extensive references and endnotes.

From the report comes this quick story:

The state of Michigan has ranked poorly in economic and public health indicators for decades. Importantly, much of the $1.9 billion worth of fresh fruits and vegetables consumed by Michigan residents comes from outside the state, despite the fact that state farmers produce the second-widest variety of farm products nationwide, just behind California. The authors estimate that Michigan farmers could generate almost 2,000 new jobs and $200 million in new income if they sell up to three times more fresh produce via in-state direct and wholesale markets. This scenario assumes no necessary shift in production, just the impact of re-localizing food dollars by utilizing Michigan’s existing cornucopia to meet consumer demand for fresh produce. In a state with many economic woes, a more localized and sustainable food system can play a critical role in establishing a stable economic future.

FarmAid Report: " Rebuilding America’s Economy with Family Farm-Centered Food Systems",, viewed July 28, 2010

Example story from Cantrell, Conner, Erickcek, & Hamm, " Eat Fresh and Grow Jobs, Michigan", Beulah, Michigan, Michigan Land Use Institute, C.S. Mott Group. September 2006,, viewed July 28, 2010

Tuesday, July 20, 2010

Economic Impact of Organic Production Systems

From the National Research Council recent report Toward Sustainable Agricultural Systems in the 21st Century come these factoids related to the economic impact of organic productions systems:

... Production costs per acre for the organic system were lower. Total labor for the organic system was higher, but because it was spread more equally through the growing season, the organic system had fewer off-farm hired workers.
- p. 228

... despite the lower yields of organic crops compared to conventional crops, organic systems can still be more profitable than conventional systems because of lower input costs and organic price premiums. When organic premiums were not included, conventional systems were generally more profitable.
- p. 229

... Organic practices tend to be more labor intensive (Klepper et al., 1977; Pimental et al., 2005) and often need more intensive management time (Porter et al., 2003) than conventional agriculture. In general, unpaid family members provide a larger proportion of the overall farm labor (Tegegne et al., 2001; Macombe, 2007; MacRae et al., 2007). As a result, the economic performance of organic farming systems can depend heavily on the input costs attributed to unpaid family labor (Hanson et al., 1997; Brumfield et al., 2000).
- p. 229

So, to push forward some discussion points:
  • Organic production systems may create year round jobs better than conventional systems, thereby assisting the stability and growth of rural communities.
  • Some organic producers may be profitable because they receive free labor.
  • Organic needs a price premium in order to achieve profitability, to cover the additional labor costs (and other costs?). A price premium of 10% may be the magic number, but this is determined by the market pricing.
  • Hiring people is always seen as a drain on the bottom line; however what we need is job creation.
Can we consider that hiring and paying people to work is good business?

Regional Food Economic Impact Research Highlights

A quick compilation of factoids from around the country related to the economic impact of regional production for regional consumption:

King County
“A shift of 20% of our food dollars into locally directed spending would result in a nearly half billion dollar annual income increase in King County alone and double that in the Central Puget Sound region.”
Source: Viki Sonntag, “Why Local Linkages Matter: Findings from the Local Food Economy Study,” Sustainable Seattle, April 2008,

“ For every food dollar spent locally by the two school districts, an additional 87 cents was spent in Oregon, generating a multiplier of 1.87 for farm to school spending.”
“Dollars spent in Oregon agriculture reverberated into 401 of 409 of the state’s economic sectors.”
Source: Ecotrust, " Farm to School Investment Yields a Healthy Return into State Coffers", March 18, 2009,, viewed March 19, 2009

“ If Iowans purchased a quarter of their produce from Iowa farmers, it would create $139.9 million in new economic output and more than 2,000 jobs for the state.”
Source: Sarah DeWeerdt, "Local Food: The Economics", Worldwatch Magazine, Worldwatch Institute, July/August 2009

“ Iowa State University research showed that if that region’s consumers ate five locally-grown fruits and vegetables each day for only the three months when they are in season, it would create $6.3 million of labor income, and 475 new jobs within the locale.”
Secondary Source: Ken Meter, "Local Food as Economic Development" Crossroads Resource Center October, 2008,
Primary Source: Swenson, David, “Economic Impact Summaries” covering Black Hawk County region. March. University of Northern Iowa Center for Energy and Environmental Education, 2008

“A 20 percent increase in local production, processing, and purchasing will generate $20 to $30 billion of new economic activity annually within the state’s borders. Thousands of new jobs will be created for farmers and farm-related businesses.”
Source: Illinois Local and Organic Food and Farm Task Force, " Local Food, Farms & Jobs: Growing the Illinois Economy: A Report to the Illinois General Assembly By The Illinois Local and Organic Food and Farm Task Force", March 2009, , viewed May 14, 2009

“Just in the city of Detroit, shifting twenty percent of food spending would increase annual output by nearly half a billion dollars. More than 4,700 jobs would be created, paying $125 million more in earnings. The city would receive nearly $20 million more in business taxes each year.”
Source: Michael Shuman, “Economic Impact of Localizing Detroit’s Food System”, Fair Food Foundation, , viewed May 18, 2009

New Jersey Fresh
“The study showed that each dollar spent on the Jersey Fresh program increased farm revenues by $31.54 … and $54.49 of increased economic output in the State. With a current budget for Jersey Fresh being about $800,000, this means an increase in farm revenues of $25.2 million, and a total increase in economic output for the state of $43.6 million.”
Source: New Jersey Dept. of Agriculture, 2004 Annual Report: Agricultural Statistics,