How does agriculture impact the virginia economy

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Virginia Agriculture Facts & Figures

The industry has an economic impact of $70 billion annually and provides more than 334,000 jobs in the Commonwealth. The industries of agriculture and forestry together have a total economic impact of over $91 billion and provide more than 334,000 jobs in the Commonwealth.


What was the effect of agriculture on the Virginia Colony?

The economy of the Virginia colony depended on agriculture as a primary source of wealth. Tobacco became the most profitable agricul- tural product and was sold in England as a cash crop.


How does agriculture affect the economy?

What is agriculture’s share of the overall U.S. economy? Agriculture, food, and related industries contributed $1.055 trillion to the U.S. gross domestic product (GDP) in 2020, a 5.0-percent share. The output of America’s farms contributed $134.7 billion of this sum—about 0.6 percent of GDP.


Which 2 factors make agriculture an important industry in Virginia?

Fertile soil and a favorable climate make agriculture an important industry in Virginia. Chickens (broilers), beef, milk, turkeys, and hogs are Virginia’s leading livestock products.


What is Virginia’s most important source of agricultural income?

Tobacco, once the basis of Virginia’s economy, has been replaced by livestock and livestock products as the state’s most valuable source of agricultural income.


How does agriculture help in economic development?

Thus agriculture can make significant contribution to economic development by earning foreign exchange required for importing industrial raw materials and capital goods required for expanding industries. The lack of foreign exchange acts as a great constraint on the growth process.


Why is agriculture important in a given economy?

One of the central goals of every developing country is to reach high-income status. Agriculture plays a critical role in transforming economies to reach the goal, along with achieving other essential development goals like ensuring food security and improving nutrition.


How does agriculture help Virginia?

Economic Impact of Agriculture in Virginia The industry has an economic impact of $70 billion annually and provides nearly 334,000 jobs in the commonwealth. The industries of agriculture and forestry together have a total economic impact of $91 billion and provide more than 442,000 jobs in the commonwealth.


What agriculture is Virginia known for?

Tobacco generates around 4% of total receipts. Other field crops grown in Virginia are hay, cotton, wheat, peanuts, and barley. Tomatoes and corn for grain are other major crops grown in Virginia. Other important vegetable crops grown in the state are potatoes, snap beans, cucumbers, and sweet corn.


What is Virginia’s economy based on?

Virginia’s economy is as diverse as the shipbuilding on the southern shore, the farming and tobacco-growing of rural areas, seafood harvesting along the Atlantic coast and rivers, the apple-growing capital of Winchester in the northwest, wineries spread among the countryside and the technology companies of the suburban …


Where does agriculture fall in Virginia’s economy?

In 2020, Virginia generated around $3.3 billion in agricultural cash receipts with the highest valued commodities being broilers, cattle and calves, and miscellaneous crops. That same year, the value of Virginia’s agricultural production and processing industries represented 4.3 percent of total state GDP.


What is the most important agricultural product in Virginia?

BroilersVIRGINIA’S TOP 20 FARM COMMODITIESRANKCOMMODITYCASH RECEIPTS ($)1Broilers625,026,0002Cattle and Calves372,057,0003Miscellaneous crops319,162,0004Turkeys316,498,00016 more rows


What is agriculture and why is it important?

The agriculture industry, which includes both crops and livestock, is responsible for producing most of the world’s foods and fabrics. Agriculture impacts so many things that it’s hard to imagine a world without this important industry. If you don’t think agriculture impacts your life, think again.


What is Virginia’s agricultural sector?

Virginia has a diverse agriculture sector. Two-thirds of agricultural cash receipts are derived from livestock, poultry, and dairy products and the other third from crops. It is also a top producer for several agricultural commodities. It ranks fourth for tobacco, fifth for toma- toes, sixth for turkeys and apples, and seventh for grapes. Poultry and eggs accounted for 32 percent of total cash receipts in 2011. Field crops made up 23 percent (see


How has Virginia’s agricultural cash receipts increased?

This growth has occurred because of increases in agricultural commodity demand boosted in part by increasing international demand and increasing use of field crops in biofuel production. The steady rate of farmland and farm employment loss reported in the last agriculture and forestry impact study (Rephann 2008) has slowed or abated. Virginia farm employment actu- ally increased from 2008 to 2010 for the first two-year period in decades (see Figure 1.3). The composition of Virginia agriculture produc- tion has also shifted slightly in the last five years. This is illustrated for major commodities in Figure 1.4, which shows the degree of Virginia commodity spe- cialization measured by a location quotient1of Virginia


What are the industries related to agriculture?

Agriculture related industries are identified using Eco- nomic Research Service’s list of farm and farm-related processing and marketing industries classified as being “closely related” to agriculture (U.S. Department of Agriculture, Economic Research Service 2005). These industries include manufacturing industries within three- digit North American Industrial Classification (NAICS) codes of 311 (food manufacturing), 312 (beverage and tobacco products), 313 (textile mills), 315 (apparel manufacturing), and 316 (leather and allied product manufacturing). They also include farm-related raw materials wholesale trade, and farm product warehous – ing. One service industry, landscaping services, was added to this list because of evidence of strong forward linkages with agriculture and forestry production from a supply-side input-output analysis. Forestry-related industries are identified using a similar list compiled by the U.S. Forestry Service (U.S. Department of Agriculture, Forest Service 2004) based on recommendations from a roundtable workshop. They include three digit NAICS codes 113 (logging), 114 (hunting and trapping), 321 (wood product manu- facturing), 322 (paper manufacturing), and selected industries within 337 (furniture and related product manufacturing). To provide some symmetry with the treatment of the agricultural sector, closely related for- est product wholesale and warehousing industries are also included. In addition, based on the recommenda- tions of an agriculture and forestry industry advisory group for the study, the biomass power generation sec- tor was added (NAICS sector 221117). This industry did not exist as a distinct 6-digit industry until relative – ly recently but it is growing in importance as a power source in Virginia and elsewhere in the U.S. Industries for both forestry and agriculture were fur – ther divided into production, core processing, extend- ed processing, and distribution and power generation activities.1“Production” activities are those industries associated with growing and harvesting agricultural, timber, and non-timber forest product commodities. “Core processing” industries are manufacturing indus- tries that are heavily reliant on state commodity inputs. They tend to be primary processing industries such as animal slaughtering and sawmills, which generally


How does energy affect agriculture?

advantages in the past, giving rise to important industry clusters centered around hog production in the vicinity of Smithfield and poultry production in the Shenandoah Valley and Delmarva Peninsula. Energy costs are affecting agribusiness in different ways. Biofuel production growth has increased feed crop prices with disparate effects on crop and livestock markets. Energy price increases have contributed to increased costs for farm inputs, including fuel, feed, and fertilizers (Westcott 2007). But, higher energy costs can sometimes benefit domestic producers. Higher energy costs for products exposed to international competition may improve domestic market share since it increases logistical and shipping costs for overseas competitors more than domestic suppliers. Virginia’s close proximity to the Hampton Roads ports provides it a key transporta- tion cost advantage over other U.S. production areas. In addition, rising energy prices may boost demand for nat – ural fiber such as cotton by increasing the relative costs of synthetics. On the consumer side, population characteristics and preferences will also influence the size and composition of Virginia agriculture. The national consumer market is increasingly fragmented. Many consumers are more health conscious and discriminating in their food choices, which translates into increased demand for fresh prod- ucts and for vegetarian, nutritiously dense, low carbohy- drate, low fat, gourmet, and high value-added specialty products. Some consumers are basing their purchases on social and environmental criteria such as corporate responsibility, adequate worker compensation, environ- mentally sustainable production practices, and humane treatment of livestock and poultry. Immigration, cultur- al diversity, and the popularity of recreational cooking have increased demand for new ethnic foods and spices, with many of these items being imported. The sluggish economy has also affected food purchases, with many thrifty consumers willing to trade down from name brand goods, choice cuts of meat, and fresh produce to less expensive options and bulk purchases to manage stag- nant or shrinking household budgets. Virginia’s close proximity to swelling Northeastern markets is a key advantage moving forward. Future population increases also present opportunities such as increased demand for locally grown food, horticulture/nursery products, and agri-tourism. More so, perhaps, than other industries, the agricul- ture sector is sensitive to changes and uncertainty in government policy. Federal government policies are changing in response to the need to curtail large budget deficits, adhere to new international trade agreements, address public health concerns, alleviate environmental problems, and control unauthorized immigration. Federal farm programs are an important element of government policy. Although less reliant on farm pay- ments programs than other states, new congressional farm bills could have an impact on Virginia by elimi- nating direct payments to farmers and making changes to risk management programs. Older farm legislation is still affecting tobacco and peanut production. Fed- eral quota systems for these crops were eliminated in the last decade with quota certificates purchased by the federal government. Peanut payments expired in 2006 and tobacco quota payments will end by 2014. These buyouts have aided the transition to a free market but resulted in the exit of some Virginia farmers from the industry. Without quota constraints, peanut and tobacco production has been free to expand in other southern states where growing conditions are often better (Dohl- man, Foreman, and Da Pra 2009). Tobacco production is likely to be further affected by a continued tightening of federal, state, and local regu- lations on tobacco consumption. The Family Smoking Prevention and Tobacco Control Act adopted in 2009 allows the U.S. Food and Drug Administration (FDA) to regulate the ingredients used to manufacture tobacco. The FDA is examining a possible ban on Menthol ciga- rettes. Dissolvable tobacco products are also drawing increased scrutiny. Meanwhile, tobacco excise taxes continue to climb. The federal government increased tobacco taxes by 61 cents per pack to fund expansion of the State Children’s Health Insurance Program (SCHIP) in 2009. States continue to view cigarette taxes as an attractive means to close budget gaps, with 25 states increasing cigarette excise taxes from 2007 to 2011 (Orzechowski and Walker 2011). Agriculture faces workforce challenges on several different fronts. The average age of Virginia farmers has been increasing. Farm succession planning becomes more important as baby boomers begin to retire in the


What is the Monwealth of Virginia?

monwealth of Virginia (Rephann 2008). It uses the same methodology as the previous study, including a nearly identical industry definition and the tool of input-output analysis to estimate the contribution of the agriculture and forestry to Virginia’s economy. Agriculture and for – estry-related industries are aggregated into four different components: production, “core” processing, “extended” processing, and distribution, reflecting the different


What are the factors that have reduced employment in the agriculture industry?

Moreover, consumer nondurable purchases such as processed food products typically decrease less during recessions than nondu- rable purchases such as furniture. The main factors that have reduced employment in the industry are continued factory productivity improvements and rapid reductions in the size of isolated segments of the industry. Tobacco manufacturing employment continues to decline because of changing consumer attitudes toward the health risks of cigarette smoking, increasing tobacco product excise taxes, and spreading regulations that limit smoking. The textiles and apparel industries have continued to shrink in response to international competitive pressures. Off- setting these declines to a limited extent are growing specialty product industries that cater to consumer tastes for fresh and locally made products such as wineries and fresh-cut food manufacturing. Although the agriculture and forestry sectors have seen significant changes in recent years, they continue to play an important role in the commonwealth economy. The purpose of this study is to gauge the magnitude of that economic contribution or “economic impact.” In doing that, this study adopts the methodology used in a previous economic impact study, The Economic Impact of Agriculture and Forestry on the Commonwealth of Virginia, conducted in 2008. It defines the industry in basically the same way as before. Agriculture and for- estry-related industries are aggregated into four different components as before: production, “core” processing, “extended” processing, and distribution, reflecting the different phase of the value chain and degree of depen- dency on Virginia’s agriculture and forestry resources. “Production” activities are those industries associated with growing and harvesting basic farm commodities timber, and non-timber commodities. “Core” industries are manufacturing industries that are heavily depen- dent on state commodity inputs for production that are unlikely to exist within the state if commodity produc- tion did not occur in the state. “Extended” processing industries are those agriculture and forestry industries that rely heavily on other inputs or imported inputs. In many instances, these industries’ location choices are affected by factors such as consumer market proximity or labor availability rather than distance to agricultural commodity or timber inputs. The economic impact measurement tool used, input- output analysis, is also the same as the previous study. Input-output analysis provides a way to estimate the con – tribution of industry sales and employment on regional economic output, income, and employment. It is based on a transactions table that shows flows of goods and services among industries, households, and government. Economic multipliers are derived from these tables. These multipliers allow one to measure the total impact of changes in agricultural and forestry-related activity on the state economy. The total impact of this activity con- sists of three parts, a “direct effect,” “an indirect effect,” and an “induced effect.” The “direct effect” consists of the injection of economic activity or expenditure into the region. For example, the sales of agricultural and for- estry-related industries located in Virginia would count as the direct effect. This direct expenditure then causes a “ripple effect” on the state economy when money is re-spent. For instance, state businesses provide supplies and services to farms such as seeds, fertilizer, veterinar- ian services, utilities and insurance. These businesses spend a portion of their sales revenues on their sup- plies and services from other state firms who, in turn, purchase a portion of their supplies and services from other state firms. This cascading sequence of spending continues until the subsequent rounds of spending dissi- pate due to leakages in the form of spending outside the state. The cumulative effect of these cascading rounds of inter-industry purchases is referred to as the “indi- rect effect.” The final component of total impact (the “induced effect” or “induced impact”) is attributable to the spending of households and other economic agents. For instance, businesses pay households for their labor services. These households then purchase goods and services from state firms who in turn receive a portion of their labor and material inputs from within the state. Again leakages occur at each round due to purchases of goods and services outside the state. The “induced effect” is the sum of the impacts associated with these household purchases. The sum of these various types of spending are referred to as multiplier effects because the total effect is a multiple of the initial “direct” effect due to the fact that it will include the sum of direct, indirect, and induced impacts.


What is the largest value added component in Virginia?

largest single value-added component is forestry core processing with an impact of $500 million. The total employment impact of agriculture and forest-related exports on the farming sector is 7,051 jobs. Therefore, one in eight Virginia farm jobs is dependent on these international exports. Several facets of the agriculture and forestry indus- tries were not captured in the economic impacts present – ed here. The study did not capture activities connected to corporate and regional offices, research and develop- ment laboratories, and logistical services operations of agribusiness. The Richmond area alone is home to sev- eral corporate offices in the agribusiness sector, includ- ing Fortune 500 companies Altria and Mead-Westvaco that employ thousands of workers in corporate adminis- trative, research, and logistical areas. Virginia farmers are deriving increasing amounts of income from farm related activities such as value-added products, energy production, and on-farm recreation. This farm related income would not generally be includ – ed in the impact estimates reported here. This study also did not compute estimates of agriculture and for- estry’s tourism and recreation’s impact, including those economic impacts that stem from consumer spending outside of farm and park venues such as hotels, restau- rants and retail shops. These activities include such things as freshwater fishing, hunting, hiking and back- packing, camping, wildlife watching, equine events and horseback riding, wineries and other agri-tourism, and agricultural festivals. Studies reviewed here that look at several of these activities suggest that visitors can be counted in the millions and economic impacts run in the billions of dollars. Therefore, the commonwealth’s agricultural and forest resources are important assets for Virginia’s tourism industry. Virginia’s agriculture and forested landscapes also provide important environmental services and other social economic benefits to the commonwealth. These benefits include improved water quality and flood con- trol, air quality, conservation of wildlife habitat, contain – ment of urban sprawl, preservation of scenic beauty, and maintenance of a sense of place. An attempt to quantify the value of water and air quality environmental ser- vices using the value transfer approach suggests that the Commonwealth receives approximately $157 million in value each year from agriculture and $6.385 billion in value from forestry in these ecological services alone.


How much does agriculture contribute to the economy of Virginia?

Economic Impact of Agriculture in Virginia. Agriculture is Virginia’s largest private industry by far. The industry has an economic impact of $70 billion annually and provides nearly 334,000 jobs in the commonwealth. The industries of agriculture and forestry together have a total economic impact of $91 billion and provide more than 442,000 jobs in …


What are the industries in Virginia?

Agriculture and forestry were Virginia’s first industries, and are still the cornerstone of our state’s economy. Agriculture in Virginia provides hundreds of thousands of jobs. Virginia farms come in all sizes and produce a wide variety of crops and animals for food, fiber and fuel.


How much does agriculture and forestry contribute to the economy?

The industries of agriculture and forestry together have a total economic impact of $91 billion and provide more than 442,000 jobs in the commonwealth.

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