Wednesday, January 8, 2014

The myth of ag as No. 1

It’s Pennsylvania Farm Show week in Harrisburg, and that means it’s time to trot out what may be the hoariest bit of balderdash in state politics: the notion that agriculture is Pennsylvania’s No. 1 industry.

It’s not. It’s not even close. I suspect it lost that distinction around 1820. Nevertheless, here’s Gov. Tom Corbett at the Farm Show opening ceremonies Saturday morning:

“Every year we have an opportunity to gather in the arena here in Harrisburg to celebrate an industry that's part of the foundation of the great Commonwealth of Pennsylvania. It accounts for $68 billion of our state's economic production and employs one in seven Pennsylvanians. Agriculture is Pennsylvania's number one industry,” Corbett said.

Corbett should amble over to the U.S. Bureau of Economic Analysis website. There, he would discover that “agriculture, forestry, fishing and hunting” accounted for $3.3 billion of Pennsylvania’s $600.9 billion economy in 2012, or slightly more than 0.5 percent.

Even if you use the “Market Value of Products Sold” in the USDA's Census of Agriculture, which is calculated differently, that only gets you to $5.8 billion – still less than 1 percent of state GDP. Compare with manufacturing, at $70.6 billion per the BEA, and you begin to see the problem. 

Nor does ag employ one in seven Pennsylvanians. If it did, that would work out to roughly 857,000 farmers out of our roughly 6-million-strong work force. How far below that are we? The Bureau of Labor Statistics counts just 5,700 people in “Farming, Fishing and Forestry Occupations.”

Actually that seems way too low to me. My guess is it omits a lot of owner-operators, migrant workers, and maybe family members who aren't paid wages. But even if you increase it by a factor of 10, you're still only at 57,000, or less than 7 percent of the supposed 857K. 

But how can there be so few workers, you ask, when the state has 62,000 farms (or as Corbett put it later in his speech, “62,000 Pennsylvania farm families who are working every day to bring their best to you.”)? Well, 21,425 of those farms sell less than $1,000 worth of goods, according to the Census of Agriculture. A full 38,850 sell less than $10,000 worth. That’s sales, by the way, not profits. Economically speaking, and regardless of how they may perceive themselves, those aren’t full-time farmers, those are people who farm on the side. And indeed, the Census of Agriculture says farming is the principal occupation of 28,751 of Pennsylvania farm operators, but a sideline for 34,412.

(Incidentally, 857,000 divided  by 62,000 equals 13.8. Do you really think the average farm in Pennsylvania employs 14 people? Since the average Pennsylvania farm is 124 acres in size, according to the ag census, that would mean we farm just 9 acres per worker. In 1890, ag labor efficiency already was 27.5 acres per worker. Today it's many hundreds.)

So how does the ag industry get to $69 billion and employing one Pennsylvanian in seven? Basically, by counting everything and the kitchen sink, and hoping no one calls them on it. Food processing, packaging, trucking, food preparation – it’s all “ag.” Then all of that gets elided via a little marketing magic (which apparently involves Canadians) into the notion that these are all old guys in coveralls riding tractors in a sun-dappled cornfield.

Just to be clear, I admire farmers, especially small-scale farmers. It’s hellish hard work, it’s 24/7, you're at the mercy of the weather, your banker and the commodities markets, and unless you’re one of the big boys, it doesn’t pay all that well. I’m hugely grateful they’re out there growing food for the rest of us while we soft-handed types peg away at our laptops at the office.

But there aren’t very many of them, and they’re not a big part of the economy. Sorry.

P.S.: Don’t believe me? Ask the Commonwealth Foundation. They’ll tell you exactly the same thing.

1 comment:

  1. Tim, great job! I would also point out that the notion of agriculture being Pennsylvania's number one industry is not harmless puffery. A lot of legislators truly believe this, and give agriculture a pass in terms of the environmental impact of farming practices. Farms in south central Pennsylvania are the major remaining source of nutrient pollution of the Chesapeake Bay, yet the state will not do anything more than urge them to voluntarily clean up their act. One also has to question why agriculture has a separate cabinet agency in state government. Given the small size of the agriculture industry in Pennsylvania, it would seem that the functions of the Department of Agriculture could be moved into the Department of Community and Economic Development with no loss to farmers and much gain to the taxpayers. Other small players in the state economy don't get their own cabinet agency.