Recipient Organization
UNIVERSITY OF TENNESSEE
2621 MORGAN CIR
KNOXVILLE,TN 37996-4540
Performing Department
Agricultural & Resource Economics
Non Technical Summary
The agri-forestry industrial complex includes the primary industries typically associated with agriculture and forest operations such as growing crops, the breeding and feeding of livestock, along with the management and logging of trees. The industrial complex also includes both input supplying industries and value added-sub-sectors comprised of food and beverage manufacturing, apparel and textiles, and forestry products manufacturing. In 2017, Tennessee's agri-forestry industrial complex directly and indirectly contributed $81.0 billion to the state's economy accounting for multiplier effects, which was 11.8 percent of the economic activity conducted in the state. The industry employed close to an estimated 342,000 individuals, or 8.6 percent of the total number of workers. Agriculture accounted for 8.3 percent of the state's economy and generated $56.8 billion in output and employed close to 244,000 Tennesseans, with over 92,000 (both full- and part-time) in agricultural production.For comparison purposes, Tennessee's economy in 2017 totaled $648.6 billion in output and had close to 4.0 million jobs. Other industry sectors with larger magnitudes of direct economic activity were services ($208.4 billion) and manufacturing ($140.4 billion), and then agri-forestry ($53.0 billion). Industry sectors with larger magnitudes for direct employment were services (1,804.2 thousand), followed by government (480.6 thousand), retail trade (395.3 thousand), manufacturing (264.0 thousand), construction (213.7 thousand), and then agri-forestry (177.0 thousand). For direct value-added, the agri-forestry industrial complex ranked seventh at $16.1 billion led by, in increasing magnitude, retail trade ($23.4 billion), wholesale trade ($23.5 billion), real estate ($35.9 billion), government ($37.9 billion), manufacturing ($39.8 billion), and services ($125.0 billion).Comparing 2017 major industry sectors to previous studies using 2006, 2009, 2011, 2013, and 2015 IMPLAN data, direct economic activity for agriculture increased an average of 6.3 percent, whereas economic activity for forestry remained relatively flat (-0.02 percent) in nominal terms. Most other major industrial sectors had increases in economic activity for this timeframe with services having the largest average increase at 14.5 percent, followed by government (11.9 percent), construction (11.7 percent), wholesale trade (8.8 percent), mining (7.7 percent), retail trade (6.7 percent), and manufacturing (4.2 percent). For workers or jobs in agriculture and forestry, forestry had the largest average decrease at 5.7 percent, with agriculture having a 3.4 percent decrease. For workers or jobs in other industries, the largest average increase was for mining at 12.5 percent, followed by services (5.5 percent) and government (2.8 percent). The largest average decrease was for manufacturing at 1.2 percent, followed by retail trade (0.6 percent), wholesale trade (0.2 percent), and construction (0.2 percent).Tennessee's secondary agri-forestry industries, which include food, beverage and tobacco products, textiles and their product mills, apparel, leather and allied products, wood products, paper, and furniture and related products contributed $39.2 billion to the economy in 2016. Hence, these industries form important components of the agri-forestry industrial complex. Identifying opportunities for economic growth in these industries can help provide employment and value-added to the state's economy. Further processing of Tennessee's raw products (i.e., making furniture from in-state trees) adds value to the state's economy in the form of labor income, profit payments, and taxes. Therefore, a second objective of this project is to provide research that assists in identifying value-added opportunities and economic feasibility of value-added opportunities.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Goals / Objectives
This project will a) quantify the magnitude of the economic contributions and importance of Tennessee's agricultural and forestry industrial complex, updating the above numbers on a bi-annual basis, and b) help identify areas for future value-added growth for the state's industrial complex. To accomplish a), an input-output model (IMPLAN) is used to determine the direct economic contributions on related input industries, and economic contributions through resulting expenditures by households at the state level. The economic contributions are provided for five major indicators: total industry output (a measure of economic activity), employment, labor income, value-added (gross regional product (GRP)), and state/local and federal taxes. To accomplish b) market feasibility studies will be conducted for products that can add value to Tennessee's agricultural and forest-based commodities. The specific objectives of this project are to:1) Estimate economic impacts from agriculture and forestry and projections of economics, 2) Estimate impacts of future industry development, 3) Provide information for industry development and facility siting using geo-spatial modeling,4) Project resource needs as a result of agricultural and industrial economic development, 5) Evaluate economic feasibility to assist in projecting whether industries are viable for future growth or development within the state and region,6) Development of a unified data model for agriculture and a web mapping framework for user-friendly web-based tools, and7) Evaluate rural community infrastructure needed for economic development.Due to the uncertain market and supply chain conditions precipitated by the COVID-19 pandemic, this project will also take into account the market risks and impacts brought on by the COVID-19 pandemic to inform decision making by stakeholders, such as government officials, policy makers, grower and industry groups. With the COVID-19 pandemic, many of Tennessee'sagricultural and forestry sectors have experienced a combination of reduction in demand and market supply chain disruptions.The exact short- and long-run impacts of the pandemic are a challenge to predict. The impacts on marketsfor agricultural products (commodities as well as processed food and beverage products), and forestry and forest-based products are undoubtedly being affected but to an unknown degree. Impacts on important related topics include pandemic effects on food safety, household food security, the marketplace from farm to consumer, supply chain disruptions, international trade deals, and labor supplies to support agri-forestry industries. As part of this project, we will provide estimates of market impacts and associated economic impacts on Tennessee's agri-forestry from the COVID-19 pandemic. We will also examine market opportunities that may arise for value-added from new ways of marketing or new products that are needed given market conditions precipitated by the COVID-19 pandemic.
Project Methods
1-2) Estimation of economic impacts from agriculture and forestry and projections of economic impacts of future industry development-To estimate economic impacts from agriculture and forestry on the state's economy and to make projections of economic impacts from future industry development regional and/or multi-regional models at either the national, state, and/or county level will be employed. State level model's estimated impacts can be compared to the sum of the regional impacts within the state. IMPLAN usesa regional social accounting system and can be used to generate a set of balanced economic/social accounts and multipliers (Olsen and Lindall 1999) (IMPLAN Group, LLC). IMPLAN provides measures of the direct effects and multiplier effects (indirect and induced) thorughout the economy. Measures include economic activity, jobs, and value-added.National, state and county level models link the transactions matrix of the IMPLAN model to the agricultural and forestry sectors through a set of physical output coefficients. These inputs and outputs will be accounted for in resource and environmental sections of the model. The input-output model, IMPLAN, will be used to analyze agriculture and forestry for the state and regions, changes in technologes, value-added industry development, and other issues impacting the economy. Evaluation of impacts of agri-industry development in counties bordering Tennessee, multi-state county level IMPLAN data is needed. County data from across the U.S. are also needed to compare impacts of industry development in the state with development elsewhere in the U.S. This information is helpful in facility siting decisions between counties inside and outside the state. Conducting research activities (1) and (2) with timely and up to date information is reliant on updating the information used in the national, state, and county level models.3) Geo-spatial modeling for industry development and siting-A component of this research activity would be to re-tool the BioFLAME modeling framework to 1) fully embrace free open-source technology to become platform independent, 2) become portable so that others can download and use the model or easily transfer it to a super computer for highly detailed analysis that was not previously possible. By utilizing Python and open-source GIS, the model would no longer be dependent on a specific computing platform or require expensive proprietary licenses. This re-tooling would also allow the model to be tied to the central unified agricultural database and the web mapping stack, making it possible to use the model from the web.4) Projections of resource needs as a result of agricultural and industrial economic development-Analysis for research area (4) will be strengthened by adding resource requirement vectors to national, state, and county level models. Water requirements and acreage needs will be integrated into the input-output coefficients at a multi-county level (perhaps for the five BEA regions located in Tennessee). The unified model will integrate resource systems with economic activity. Analysis of impacts from industrial development will incorporate forest, crop and pasturelands, water use, and energy requirements along with carbon emissions.5) Economic feasibility analysis to evaluate whether industries are viable for future growth or development within the state and region-Under research activity area (5), assess feasibility of market opportunities for agri-industry development, study areas will include examination of:Market trends for agricultural and forestry products;Opportunities for expansion of markets and new agri-indusry segments; andOpportunities for new market mechanisms that enhance local food systems (Martinez, et al. 2010).Methods include assessment of market potential, market feasibility studies for new agri-industry ventures, consumer preference and demand analysis.One method for identifying industry development opportunities is by evaluating IMPLAN expenditures by the selected value-added industries to calculate employment location quotients within a given region, identifying which counties may have comparative advantages with respect to skilled labor to support renewable energy industries. Location quotients, assume that employment is a proxy for output (Isserman, 1977, 1980), and are frequently used in economic base analyses to compare local economies to other economies. Thus, they are useful for determining which counties have a comparative advantage with respect to a given industry (Shaffer, Deller, and Marcouiller, 2004).6) Development of a unified data model for agriculture and a web mapping framework for user-friendly web-based tools-Central to this research activity is the compilation of agricultural spatial and tabular data at various resolutions into a unified relational enterprise database. This includes high resolution land cover assessment, county level agricultural statistics, model derived crop yields and costs of production, as well as infrastructure assets such as road and rail networks, industrial sites, and manufacturing facilities. Having these data available together in a central repository provides easier access to resources for researchers conducting analysis at the field, watershed, county, or state level.With commonly used agricultural data in one place on a spatially enabled enterprise server, a suite of web mapping technologies will allow access to the data from the web. Researchers, as well as the general public, will be able to browse and interact with data layers that are relevant to their interests. Moreover, web-based decision making tools can expose functionality that was previously only available to people skilled in data retrieval and manipulation. The ability to do real-time suitability analysis, regional census data extraction, or build colorful thematic maps of current or historical agricultural data would all be possible with these technologies in place. Data sources for the development of this decision aid tool include geocoded data from the USDA's Agricultural Marketing Service, the County Business Patterns (Census Bureau 2016), the IMPLAN model, Census of Agriculture (USDA/NASS 2017), and other sources.7) Evaluate rural community infrastructure needed for economic development-As part of this research activity, to identify trends and financial capabilities of communities, an integrated database of socio-economic will be developed for all the 346 cities, towns and municipalities and 95 counties in Tennessee. Secondly, we will develop a methodological framework annually to determine a community's, "ability to pay", in the form of an index that represents a community's financial capability to afford, or pay for, a loan or grant based on debt burden, revenues, cost of depreciated assets, or matching requirements. US Census Bureau's American Community Survey is the primary source of socio-economic data. Other data sources include Bureau of Labor Statistics, Tennessee State Tax Commission, Tennessee Economic and Community Development and Tennessee Comptroller of the Treasury. The analysis includes a residential level cost analysis for alternative pollution control measures to arrive at an estimated cost per household. Additionally, a weighted average of socio-economic indicators is used to assess the community's financial capability to generate revenues. The residential and community-level indicators are assessed in a financial capability matrix to determine the affordability of the community. Based on the finding, in order to alleviate economic burden on impacted populations, policy recommendations will be made to allow for reasonable accommodations.