(talk about needing more research like this!)
Using county-level data from the 2002 and 2007 U.S. Census of Agriculture, the team analyzed the link between direct farm sales — sales made directly from farmer to consumer — and total farm sales. When they examined the data on a national basis, they found a positive but not statistically significant relationship between the two. Goetz said that a different picture emerged when they looked at the data by region, as defined by the U.S. Bureau of Economic Analysis. In some regions, direct sales seemed to complement total farm sales. For example, in New England, a $1 increase from the 2002 level of direct farm sales was associated with a $5 increase in total farm sales. That same $1 increase was associated with a $9 increase in overall farm sales in the Mid-Atlantic states of Delaware, Maryland, New Jersey, New York and Pennsylvania. Yet, in other regions, local food sales appear to compete with total farm sales. In Southeastern U.S. counties, for example, direct sales were associated with a reduction in total farm sales. Next, to measure the impact of all agricultural sales on economic growth, the researchers used a statistical model to analyze how changes in farm sales per capita influenced changes in real personal income per capita — an indicator of economic growth. Again, the team performed this analysis using county-level data from 2002 to 2007.
Goetz said that by establishing that direct sales have a positive effect on total agricultural sales, which in turn have an effect on income growth, this study demonstrates that direct sales do indeed expand local economies at least in the Northeast U.S. He added that these results came as a bit of a surprise.
“When we set out to measure the economic impact of local food sales, we frankly didn’t expect to find one,” said Goetz. He explained that economists are generally skeptical that local sales can have impacts because such sales tend to recirculate money within a community rather than inject new money. “Injection of new money — money from outside of the community — is what many economic development practitioners think of as the fuel for economic growth. But to me, these findings provide quite robust evidence that even direct sales do have an effect on growth, in the Northeast U.S.”