PHOTO: Vegan Photo/Flickr
Lisa Munniksma
June 7, 2016

If you read HobbyFarms.com regularly, you’re probably on board with the idea that organic farming is a good choice for an area’s environmental health. Penn State University ag economist Edward Jaenicke has found it’s good also for an area’s economic health.

He chose 225 counties in the U.S. to examine as “organic hotspots.” These are counties with a high concentration of organic operations surrounded by counties that also have a high concentration of organic operations. (Find out if you live in an organic hotspot.)

Jaenicke’s findings are encouraging for the future of organic agriculture’s role in rural development:

  • On average, the hotspots’ poverty rates are 1.3 percentage points lower than the average national poverty rate of 16 percent. Organic-production hotspots have a slightly larger decline in poverty rate over organic-handling hotspots. Researchers point out that these numbers can be compared to some major antipoverty programs, including the Supplemental Nutrition Assistant Program, and that these numbers reflect a much larger difference than other antipoverty programs, like the Special Supplemental Nutrition Program of Women, Infants and Children.
  • Median household incomes in organic hotspots are an average of $2,000 higher. Organic-handling hotspots saw an even larger increase in the average household income ($2,588) than organic-production hotspots ($1,089).
  • Organic hotspots also had lower unemployment rates and higher county-level per-capita income. This is contrasted by general-agriculture hotspots, which actually have a slight increase in unemployment and a $1,076 lower average per-capita income than the general population.

Organic Rural Development

The Organic Trade Association asked Jaenicke to compile his findings into a white paper for their use. In an OTA press release, CEO and executive director Laura Batcha said:

“Organic agriculture can be used as an effective economic development tool, especially in our rural areas. The findings of this research … provides policymakers with an economic and sound reason to support organic agriculture and to create more economy-stimulating organic hotspots throughout the country.”

OTA points out that organic is one of the fastest-growing sectors of the U.S. food industry, climbing 11 percent in 2015, as compared to the overall food market’s 3 percent growth. It’s worth $40 million.

This economic growth finding complements Penn State news from 2014 that says farms engaging in community-focused agriculture—direct-to-consumer sales and agritourism—boost local economic growth.

“We found that for every $1 increase in agricultural sales, personal income rose by 22 cents over the course of five years,” says Stephan Goetz, professor of Agricultural and Regional Economics at Penn State and the director of The Northeast Regional Center for Rural Development.

And the USDA recently reported that farms that sell direct-to-consumer—think farmers markets, roadside stands and CSAs—may stay in business longer. The number of these farms increased 24 percent between 2002 and 2012. From 2007 to 2012, 61 percent of farms with direct-to-consumer sales were still in business under the same operator, compared with 55 percent of farms that did not have these direct sales.

All around, economists are coming up with good news for small-scale, organic farm businesses!



Next Up