Organic Apple Production in Washington State: an Input-Output Analysis
by Pon Nya Mon and David Holland*
Printable
copy of report. WP
2005-3 - SES Working Paper
Organic food consumption in the U.S. has been steadily increasing in recent years. The objective of this paper is to provide an Input-Output (IO) based economic impact analysis for organic apple production in Washington State. The analysis is divided into two scenarios: first the comparison of the economic impact of organic versus conventional apple production for a final demand increase of one million dollars. The second analysis looks at the economic impact of organic and conventional apple production in terms of a given unit of land (1,000 acres of production). Both output and employment effects are estimated under each scenario. In addition, the net economic impact of 1,000 acres decrease in conventional apple production and 1,000-acre increase in organic production is analyzed.
The organic apple sector was more labor intensive than the conventional sector and total impact increased employment in all scenarios was higher for the organic apples than for the conventional apples. The organic apple sector used less intermediate inputs per unit of output than conventional production. As a result, the indirect economic effect was lower for the organic sector than the conventional sector.
Moreover, the total (direct, indirect, and induced economic impact as measured by sales was lower for organic production under a one million dollars increase in final demand. However, the two production methods are not directly comparable in this scenario because of the higher prices associated with organic apples.
The second scenario (per unit of land) showed greater total economic impact measured as sales or employment was higher for organic apples compared to conventional apple production.
If you found materials of interest on this site you may also want to visit the Center for Sustaining Agriculture and Natural Resources - http://csanr.wsu.edu/ - web site. The CSANR mission is to develop and foster agriculture and natural resource management that is economically viable, environmentally sound, and socially acceptable through interdisciplinary relationships between WSU, growers, industry, environmental groups, agencies, and the people of Washington. Featured are Program Areas, Educational Opportunities, Information Resources, Funding Sources, and more.
*Pon Nya Mon is a graduate student in the Department of Political Science and David W. Holland is a professor emeritus, School of Economic Sciences, Washington State University. This work was supported by project number WNP00383, College of Agriculture and Home Economics, WSU.
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