Saturday, July 07, 2007

Reach your own conclusions....

Or maybe any conclusion at all, it seems. Efforts by the Indiana State Department of Agriculture to increase hog production in Jay and Randolph counties are "buttressed" by a study performed by Ball State.
Livestock farms contribute more than $4 billion to Indiana’s economy each year, and that amount is growing by more than 5 percent annually. The prospects for long-term growth in livestock farms are very strong. Ball State University’s Office of Building Better Communities recently completed an analysis for two rural Indiana counties which showed that growth in the hog sector will contribute more than $100 million in total output to those local economies and contribute more than 2,300 jobs. [More]
[Long time readers will note I have not linked to the actual report - I can't find it, and everybody who refers to it fails to link it too. This is not only frustrating, it raises caution flags for me.]

Oddly enough, the same report offers ammunition for opponents as well.
An opponent of big livestock farms says a Ball State University study of the hog industry in two Indiana counties offers proof that the sprawling farms bring very little economic impact to surrounding areas.

Bill Weida, an economist for GRACE Family Farm Project, said Ball State's analysis of hog farms in Jay and Randolph counties shows that the pork industry in those counties "is creating so little economic activity that it's almost irrelevant." [More]
Not that industrial ag opponents are much better, mind you. They like to point out how much more wonderfully inefficient small operations are adding more jobs per unit of output, as if this was a good thing.

Let me try to light a candle here. State ag departments are habitual cheerleaders for anything agricultural and in my opinion write some of the the most one-sided news releases of any government branch.

An illustration of my point:
Fact: Agriculture is the driving force in most of Indiana’s rural economies. For every $1
of property taxes paid by agricultural land/farms, $0.40 is used in local services
(American Farmland Trust). Also, a survey by the Indiana Soybean Alliance found that
an 8,000 head swine facility generates $17,000 annually in property taxes and will
produce $40,000 in valuable organic crop nutrients. [More]
Citing such numbers without context implies an importance that cannot be verified. It is poor journalism, since readers cannot decide for themselves if this is the best of choices. In the above citation, for example, why not list what some other economic entities pay in taxes, like a motel, or factory, or housing development. Is it more? Less? By how much?

Most ag administrators seem unfamiliar with commerce departments since they apparently don't care about other forms of business. This is a shame, since the bean counters do numbers for a living.

Consider the opening remark: "Agriculture is the driving force..." What exactly does that mean? Given these numbers from the people who are in charge of counting the dollars in the economy - US Dept Of Commerce (DOC) - this strikes me as an incredible stretch. The real numbers for IN:
2006 State Gross Domestic Product (value of all economic activity) $249B
2006 Contribution by Ag (farms, forests, fish, hunting) $ 2B
Source: BEA
The difference in the figures from the ISDA and DOC has to do with value added, not simply gross sales, which can be very misleading. If ag can use gross receipts then other industries can inflate their numbers as well. Economists prefer value-added to describe how much wealth is really contributed to the economy.

OK, maybe in "rural counties" ag is the big force. Let's check Jay and Randolph - the counties in question:
[Note: 2005 is the latest data on a county level]
Total local income Jay $525M Randolph $681M
Ag income $15M $11M

Some driving force. Psychologists have long know the power vision has over reason. The more visible something is the more important we believe it to be. Thus farms, which cover states like IN seem to be what the state is all about - when in the counties listed above the most important sources (by far) of economic activity are manufacturing and transfer payments (SS, Medicare, federal pensions).

This is one reason more economists are questioning the power of farm payments to make much difference in local economies, especially compared to other choices for development. In fact, real numbers have led me to conclude the most important economic legislation for rural America is a solution to Social Security.

1 comment:

Brian said...

Since the Government won't keep their sticky sweat/sour oinker pinkies out of our $$ funds and won't pay back with interest at market rates what they withdraw, then we should abolish the $ocial $ecurity and let the people invest with their own wisdom. When we get ripped off from an INC with an oink then what do we do? Who said life is a gamble?