Quantifying the Multiplier Effect: What Sustainable Local Food Systems can Mean to Local Communities

2013 Annual Report for LS12-248

Project Type: Research and Education
Funds awarded in 2012: $211,000.00
Projected End Date: 12/31/2016
Region: Southern
State: North Carolina
Principal Investigator:

Quantifying the Multiplier Effect: What Sustainable Local Food Systems can Mean to Local Communities


How to cost effectivly and equitable encourage economic development in both urban and rural areas is a question facing the majority of the United States.  Local Agriculture, where the final sale of an agricultural commodity or its derivative occurs within a predefined boundary relative to where that item was produced, has become a more commonly discussed tool for furthering economic development.  Recent research (Brown et al, 2013) has indicated that changes in farm sales within a couny has historically been linked with changes in county wellbeing (measured using per capita income).  However, prospective studies hoping to predict the “economic impact” of future changes, both in terms of absolute sales as well as changes in way these products are brought to market (such as through direct to consumer marketing channels), have not been able to make reliable predictions on a regional level.  Within the southern region, there exists limited data that quantifies the potential economic impact of such changes in agriculture in different climactic/socio-economic conditions across the region. The current research is collecting the economic information necessary to evaluate the holistic economic impact of Local Agriculture today in North Carolina and more broadly across the Southern Region.

Objectives/Performance Targets

• Objective 1: Develop Indicators Using Input from Advisory Group
• Objective 2: Develop Comprehensive Database of Farmers in Relevant Counties
• Objective 3: Gather Relevant Data from Survey Participants
• Objective 4: Creation of Economic Database to Supplement Those Used for Economic Impact Assessment
• Objective 5: Using Gathered Data to Complete Nuanced Econometric Analyses
• Objective 6: Implement Outreach and Dissemination


In order to properly conduct prospective analyses of the impact of changes in the “Local Agriculture” subsector to the local economy (for the purposes of this study local is defined as being within the state of NC) it is important to have data that reflects the nuances of agriculture across the state.  The vast majority of economic impact studies conducted today, both for agriculture as well as most other industries, make use of the IMPLAN database because of it’s disaggregation of relevant data down to the county level.  However, because of the relatively low spatial resolution in the sampling frame used to derive this database and others there is reason to suspect that the economic benefits that accrue due to close spatial proximity between buyer and seller (i.e. economic multiplier effects) are being systematically undervalued; this is because their effects would have essentially been smoothed over through the sparseness of the sample relative to the population. In order to remedy this shortcoming of available databases with regards to the agricultural economy, this project details a research program to collect the necessary information to amend currently available data so that economic analyses interested in studying the differential impacts had by different subsectors of the agricultural economy stratified both along geographic regions and relative socioeconomic conditions may be carried out.

To be able to ensure that the database used to conduct economic impact assessments accurately reflects the economy today, we have derived a represenative sampling frame that seeks to collect data stratified both along geographic region (North Carolina can be divided into three predominant geographic regions along an East-West axis: Mountains/West, Piedmont/Central, and Coastal Plain/East) and economic tier status (a measure of the long term forecast for economic growth in the county as defined by the North Carolina Department of Commerce). At random a county corresponding to each pair of traits. These counties are: Yancey (I – Mountain), Transylvania (II – Mountains), Henderson (III – Mountains), Anson (I – Piedmont), Rowan (II – Piedmont), Chatham (III – Piedmont), Robeson (I – Coastal Plain), Wayne (II – Coastal Plain), Carteret (III – Coastal Plain). While these counties were in no way selected based upon their relative agronomic output, they represent a diverse sampling of counties from across the state.  The sampling frame for each county was defined using contact lists mainted by the North Carolina Cooperative Extension Service, relevant non-profit organizations, and the partcipation lists of the Present Use Value Taxation Defferment Program (North Carolina landowners may have a portion of their property taxes deferred for 3 years at which time the value is forgiven if the land is used in some type of agricultural/horticultural/forestland production program and other minimum requirements are met). While approximately 10% of each county’s sampling frame is being surveyed, the percentage of farmers that represents within each county varies tremendously.  In certain counties extensive followup surveying has been required due to a high percentage of the farmland being held by non-farmers or outside organizations.  

It should be noted that this and all other relevant methodologies used in this research will be included in outreach activities organized through the Center for Environmental Farming Systems (CEFS), a tripartite collaboration between the North Carolina Department of Agriculture, North Carolina State University, and North Carolina Agricultural and Technical State University, including published material and presentations at stakeholder meetings in the coming years.  All materials with the project have secured approval from North Carolina State University’s Institutional Review Board. Data collection using the approved instrument is currently in progress. The findings from the data collection and this synthesis have been and will continue to be incorporated into outreach activities being conducted by CEFS as well as its parent institutions. The outreach activities that this information has been included within have included talks given by the directors of CEFS both within the state and nationally, annual presentations by the project coordinator at events/seminars including those organized by the NC Sustainable Foods Advisory Council and the NC Cooperative Extension Service, as well as community meetings with stakeholders across the state. Further the resultant SAM database will be made publically available, having removed all identifying and proprietary information previously.

Impacts and Contributions/Outcomes

In North Carolina today there is a great deal of debate at the local, county and state levels as to the most cost effective ways to encourage economic development in every corner of the state. These debates are focused upon the issue of the expected marginal return to each public dollar that is used to subsidize some industry regardless of the exact form that subsidization takes. Because of the suspected undervaluation of the economic benefits of local agriculture that are thought to accrue based on the closer spatial proximity of buyer and seller any evaluation that is presently done to determine which industries are expected to be the greatest drivers of economic growth in the long run are biased against agriculture broadly and certain subsectors of agriculture more specifically. The focus of this research is to first collect data of an adequate resolution to be able to conduct such analysis as those described above and then to use this information in a series of econometric analysis to determine the current economic impact of different subsectors of the agricultural economy across North Carolina and forecast plausible scenarios for growth down the road. The findings from this study will be used to inform decision makers in the state as to what industries and subsectors within should be candidates for public investment because they have been demonstrated to be drivers of economic growth using information from today’s economy. North Carolina has a strong tradition of agriculture and the inherent spatial proximity necessary for many of its workings makes agriculture a logical candidate for consideration as a tool by which to achieve economic development in portions of the state that are not currently being targeted for investment by other industries.


Drew Marticorena

[email protected]
Box 7609
North Carolina State University
Raleigh, NC 27695
Office Phone: 9497359500
John O'Sullivan

[email protected]
PO Box 21928
Greenesboro, NC 27420
Office Phone: 3362854683
Nancy Creamer

[email protected]
North Carolina State University
Box 7609
North Carolina State University
Raleigh, NC 27695
Office Phone: 9195159447