Economic impact of organic agriculture hotspots in the United States

Abstract

In this paper, we assess whether or not organic agriculture has a positive impact on local economies. We first identify organic agriculture hotspots (clusters of counties with positively correlated high numbers of organic operations) using spatial statistics. Then, we estimate a treatment effects model that classifies a county's membership in an organic hotspot as an endogenous treatment variable. By modeling what a hotspot county's economic indicators would have been had the county not been part of a hotspot, this model captures the effect of being in a hotspot on a county's economic indicators. We perform the same analysis for general agricultural farm hotspots to confirm that the benefits associated with organic production hotspots are, in fact, due to the organic component. Our results show that organic hotspot membership leads to a lower county-level poverty rate and a higher median household income. A similar result is not found when investigating the impact of general agriculture hotspots. On the other hand, our result is robust to alternative hotspot definitions based on type of organic operations to alternative methods of estimating average treatment effects on the treated. These results provide strong motivation for considering hotspots of organic handling operations, which refers to middlemen such as processors, wholesalers and brokers, and hotspots of organic production to be local economic development tools, and may be of interest to policymakers whose objective is to promote rural development. Our results may incentivize policymakers to specifically focus on organic development, rather than the more general development of agriculture, as a means to promote economic growth in rural areas, and may further point them in the direction of not only encouraging the presence of organic operations, but of fostering the development of clusters or hotspots of these operations.

Landscape context affects the sustainability of organic farming systems

“…Given that profitability varies across landscapes in response to production costs and price premiums received in different landscapes, understanding factors that shape organic markets for producers (which differ from consumer markets) and consumer willingness to pay a premium for organic foods is critical. Profitability will be highest in areas with large numbers of consumers of organic foods, or greater supplies of organic inputs, which may often occur in areas with greater population density and median income (46). Moreover, areas with lower property taxes and those closer to interstates tend to have larger organic markets for producers (46).…”

Place Effects and Chronic Disease Rates in a Rural State: Evidence from a Triangulation of Methods

“…Our specific approach to this issue offers a triangulation of methods where we combine results from a spatial analysis method (hot spot analysis) with a matching technique (entropy balancing), and an ordinary least square (OLS) regression to understand whether the extent of food providers’ presence and/or absence impacts chronic diseases rates in West Virginia. Recent literature reviews suggest that this combination of methodologies to identify the effects of retail food providers on chronic disease rate incidence constitutes a new approach in this literature [ 23 ]. (Reference [ 23 ] utilized the same logic while studying the economic impact of organic agriculture hot spots in the United States.…”

“…Recent literature reviews suggest that this combination of methodologies to identify the effects of retail food providers on chronic disease rate incidence constitutes a new approach in this literature [ 23 ]. (Reference [ 23 ] utilized the same logic while studying the economic impact of organic agriculture hot spots in the United States. The main methodological difference between the two studies is that [ 23 ] computed the hot spot analysis then used the propensity score matching (PSM), whereas our study used the entropy balancing method and perform a sensitivity analysis using the propensity score weighting and the kernel matching method.)…”

“…(Reference [23] utilized the same logic while studying the economic impact of organic agriculture hot spots in the United States. The main methodological difference between the two studies is that [23] computed the hot spot analysis then used the propensity score matching (PSM), whereas our study used the entropy balancing method and perform a sensitivity analysis using the propensity score weighting and the kernel matching method. )…”

A Sustainable Organic Production Model for “Food Sovereignty” in the United Arab Emirates and Sicily-Italy

“…At the international level the role of organic agriculture in the development of local economies is acknowledged for its ability to bring about an increase in local income per capita, improving the quality of life for entire areas and creating local markets for sustainable agricultural products [17,18]. A knowledge of these production systems and the sharing of know-how from these farmers thus enables the development of innovative approaches to sustainable development and food security that is more bio-diverse, resilient and socially fair.…”