The Organic Trade Association conclusive research that for the first time links economic health at the county level to organic agriculture.
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The research shows that organic food and crop production—and the business activities accompanying organic agriculture—create real and long-lasting regional economic opportunities.
The recently completed White Paper "U.S. Organic Hotspots and their Benefit to Local Economies" was prepared for the Organic Trade Association (OTA) by Penn State Agricultural Economist Dr. Edward Jaenicke.
It finds organic hotspots—counties with high levels of organic agricultural activity whose neighboring counties also have high organic activity—boost median household incomes by an average of $2,000 and reduce poverty levels by an average of 1.3 percentage points.
Organic activity was found to have a greater beneficial economic effect than that of general agriculture activity, and even more of a positive impact than some major anti-poverty programs at the county level.
"We know that organic agriculture benefits our health and our environment," said Laura Batcha, CEO and Executive Director of OTA. "This significant research shows organic can also benefit our livelihoods and help secure our financial future."
"Organic agriculture can be used as an effective economic development tool, especially in our rural areas," said Batcha. "The findings of this research show organic certifiers and the transfer of knowledge and information play a critical role in developing organic. And it provides policymakers with an economic and sound reason to support organic agriculture and to create more economy-stimulating organic hotspots throughout the country."
Organic is one of the fastest-growing sectors of the U.S. food industry. Organic food sales in 2015 jumped by 11 percent to almost $40 billion, far outstripping the 3 percent growth rate for the overall food market.
Organic crops command a significant price premium over conventionally grown crops. As a result, interest in organic at the production level has grown as the demand for organic has risen. More farmers are transitioning to organic production, and more organic businesses are sprouting.
But what does all this interest in organic and organic activity mean for local economies?
"This research systematically investigates the economic impacts of organic agriculture," noted Jaenicke. "Its important findings show that organic contributes to the economic health of local economies. The growing market interest in organic agriculture can be leveraged into effective policy for economic development." ■