Food Systems and Regional Economic Development: Evaluating Policies and Methods
Cornell University, August 2014
In search of new opportunities to support U.S. rural economies, many researchers, practitioners, and policymakers promote policies that strengthen re-localized food systems. Since 2009, the U.S. Department of Agriculture has funded more than 2,600 local and regional food systems projects. Yet there have been few data-driven economic impact assessments of these initiatives, in part due to data deficiencies precluding comprehensive analysis. Through a series of three papers, this dissertation contributes to the question: What are the regional economic impacts of policies supporting re-localized food systems? The first paper develops an enhanced understanding of how local food system participants interact with other businesses and industries in a local economy. The primary contribution of this paper is to show that local food system participants in New York State have different expenditure patterns than farmers who do not sell through these markets. Through higher local expenditures (per unit of output), and greater reliance on local labor, it is likely that researchers who utilize aggregate agricultural sector data to determine the economic impact of local food system activity under-estimate overall impact. The second paper develops an empirically-driven methodology to estimate the regional and farm-level economic impacts produced by policies promoting an increasingly popular regional food system initiative: food hubs, i.e., local food aggregation and distribution businesses. This is the first research to empirically derive net and gross regional economic impacts from food hub development, demonstrating that food hubs have higher associated output multipliers than comparable industry sectors, but that growth in final demand for food hub products results in offset purchases from other sectors. The third paper builds upon the second paper by examining the extent to which food hubs actually increase the overall availability of locally-grown food, enhance farm entry into markets, and impact farm viability. This paper offers some of the first empirical evidence that food hubs increase consumer access to locally-grown and processed foods, improve farm access to regional markets, and support farm business expansion.