Often, the value of the agriculture sector is measured by the number of agriculture jobs in the economy. Over time, a decline in the number of these jobs has been interpreted as a sign of a fading industry. In fact, the number of direct jobs created by agriculture is an accurate but incomplete measurement of its impact on a given economy.

Recognizing this, the Huron County Federation of Agriculture initiated a study in 1996 to investigate a more accurate measurement of the impact of agriculture. At that time, jobs in farming were on the decline in the county, but the value of agriculture production continued to grow. There was considerable data on the role of farms and farmers, but little information available on the linkages between agriculture and the rest of the economy. New sectors such as tourism were on the increase but little was known about the exact magnitude of their impact. Planning was happening at the County and provincial level without benefit of a complete picture of important sectors of the county economy.

Given these facts, the Federation approached the University of Guelph to discuss a study with the objective to estimate the total economic impact of agriculture on the Huron County economy. All impacts, including direct, indirect, and induced, were to be estimated.

The authors took up this challenge, with the end result being this report. The study involved a combination of "economic base" and "input-output" methods. Statistics Canada data and similar studies were used to estimate the direct and induced impacts, while the indirect impact was calculated using a survey of businesses related to agriculture.

A draft report was prepared and shared with organizations in the County in 1997. This was followed by additional in-depth work on agriculture, including case studies of agriculture- related businesses operating in the county. Work also began in 1997 to study the impact of tourism. The Huron County Planning and Development Department and the Huron Tourism Association supported this work. A companion study on tourism is being completed at this time.

This document represents the final report for the agriculture study and includes a discussion of the research background, the methodologies used and the results of the analysis. In summary, the authors estimate that there are $512 million in direct agriculture sales and $1.5 billion in indirect agriculture sales in the county. The value of sales in the "induced" (services supporting employees related to agriculture) sector was not estimated. With respect to jobs, the latest data suggests 4,428 direct jobs for farmers, 12,128 indirect jobs for workers in businesses related to agriculture and 3,528 jobs in the induced sector. This means that for every direct job in agriculture, approximately four jobs are supported in the wider economy outside agriculture. This was estimated through an input-output like methodology using the findings of our agriculture-related business survey. A more general economic base analysis using Statistics Canada and other data suggests a more conservative result. For each job in agriculture, 1.8 jobs are produced in supporting services.

All the estimates indicate that the jobs supporting agriculture are more important than those within agriculture. Furthermore, substantial sales volume is created by agriculture throughout the county economy. In fact, Huron County produces more farm gate sales than four provinces in Canada. This is significant considering that the county population is only around 55,000.

The data suggest that agriculture remains the largest and most important sector in the county. New employment and economic opportunities can be found within and related to the agriculture industry. Planning and policy should take this into account and recognize that the future of the agriculture sector lies in continued development of the agriculture and agri-related industries.

The authors acknowledge the support of volunteers and financial sponsors, but remain solely responsible for any errors or omissions.

Huron County Federation of Agriculture is pleased to present the findings of the Economic Impact Study of Agriculture on the Huron County Economy and wishes to thank the following people for their assistance:

Former Agriculture Minister Elmer Buchanan and the 1994 Ontario Legislature for making stable funding a reality and giving county federations the resources to undertake important projects like this study.

Dr. Harry Cummings, Karen Morris and Dan McLennan for understanding our expectations so readily and finding ways to achieve them.

Gayle Bogart OFA Field Services Representative for being an integral part of our research team over the past two summers.

Huron County Federation of Agriculture directors and members who assisted in compiling the lists of agriculture businesses.

The municipal offices in Wingham, McKillop and Stanley for assisting in verifying the lists of agriculture businesses.

The twelve businesses who participated in the extensive interviews.

Joan Karstens of the Huron Tourism Association and Cindy Fisher of the Huron County Planning Department for assisting with the companion study on tourism.

The Huron County Planning and Development for assisting in funding the Tourism Study.

The Ontario Federation of Agriculture for funding the manual based on Huron County's experience for use in other countries.

Thank you very much. Sincerely;

Bill Wallace

Steve Thompson

Henry Boot

Impact Study Committee

Appendix 1: Values for Charts 3 and 4: Huron County and Ontario Farms Classified by Major Product, 1991 (farms with sales > $2,500)

Appendix 2: Survey for Agriculture-Related Businesses

Appendix 3: Technical Appendix to Indirect Impact Assessment Methodology

This research report attempts to identify and measure the economic impacts of agriculture on the Huron County economy. Researchers made specific attempts to measure the direct and indirect impacts of agriculture. Indirect impact research focused on agriculture-related businesses, defined as businesses that buy products and services from, and/or sell products and services to, the agriculture sector. Researchers also studied the induced impacts of agriculture to illustrate the importance of agriculture to the entire county economy.

The main method of analysis was an "input-output-like" approach using a telephone survey conducted in the summer of 1996. The aim of this analysis was to understand the nature and depth of agriculture's indirect impacts on the county economy. Researchers reviewed relevant secondary data, including Population Census of Canada reports and studies concerning the impact of agriculture on a relatively small region. Further calculations of the direct and induced impacts were also completed. A preliminary paper outlining the research findings was produced in December 1997. This was followed by further analysis to test the findings and finalize the results. Closer analysis of the extensive linkages between agriculture and the rest of the Huron County economy was also conducted. This final report provides a discussion of the research background, results of the analysis and the methodologies used in the study.

This methodology has been used several times since the Huron County study in 1996. Currently, a study is underway to assess the economic impact of agriculture in Simcoe County. It includes the development of a socio-economic profile of the County and a profile of the County’s agricultural economy, using Statistics Canada (e.g. Census of Agriculture, Census of Population), and other secondary data. The study also includes a review of relevant literature, a survey of agriculturally-related businesses and the development of a strategic plan for agriculture and human resource development in the County.

An economic impact study was recently completed on Farmer’s Markets in Ontario. This study assessed the direct impact of farmer’s markets on the community economy in terms of jobs and level of sales. It also measured the indirect impact of farmer’s markets on the local economy, particularly local businesses. Nineteen markets from Fort Frances to Hamilton to Ottawa were studied.

An economic impact study was also undertaken in the five counties of Prescott, Russell, Stormont, Dundas and Glandgarry. The impact of agriculture and agriculture-related businesses on the economy of the five counties as a whole and individually was calculated. The methodology included the development of an inventory of 1,300 agriculture-related businesses, a survey of selected businesses, and an analysis of Statistics Canada Population Census and Census of Agriculture data. The study used a combination of "economic base" and "input-output" methods.

Other industries can benefit from an input-output-like approach. For instance, the researchers returned to Huron County to conduct a study estimating the economic impact of the tourism industry. The methodology included a mail-out survey to 1,300 tourism-related businesses. A comparison between the tourism and agriculture sectors could thus be made.

Interest in the economic impact methodology developed in this paper has been great. In the spirit of shared knowledge, the authors wrote a "handbook" discussing, step-by-step, our approach to measure the economic impact of an industry. This document, entitled "The Handbook on Estimating the Economic Impact of Agriculture", is available from the authors upon request. Contact Harry Cummings at (519) 832-1647 or fax (519)821-0202 or email at hca@web.net.

Early economic development in Canada centered on several key staples in the manufacturing and primary sectors. Economic growth in many parts of Canada depended on agriculture in particular. Such is the case in Huron County. Over time, fear related to the decline of direct primary sector jobs led many decision-makers to seek new employment focuses. Communities were urged to replace traditional roles (such as agriculture service centres) with new roles (such as centres of retirement and recreation) (Troughton, 1992, p. 39). This trend can be witnessed across Canada where communities are making efforts to diversify their economic activities.

These efforts, however, may be at the expense of traditional regional economic sectors. The historical primary economic activities which provided the original raison d'etre for many communities have become secondary in some communities (while remaining vital in others). The agriculture sector is one such industry and is under continued scrutiny due to declining direct job numbers. Failure to continue past job growth has led many decision-makers to under-emphasize the impact of agriculture and other primary industries (Kulshreshta, 1988, p. 431).

While it is true that direct employment in primary sector activities is declining relative to other sectors, the value of these activities often remains the same and is, in some instances, increasing. Thus is the case in Huron County, where the value of farm gate sales has risen substantially while agriculture employment has declined steadily over the past several census periods. At the same time, service sector employment has risen dramatically, providing marked job growth (Statistics Canada 1986, 1991; OMAFRA, 1995). As direct employment in the agriculture sector of Huron County declined in real terms and relative to other economic sectors, local planners and others began discounting the importance of the agriculture sector.

As mentioned above, there has been a growing perception that agriculture is an industry in decline. This project was developed to examine the validity of this perception in Huron County. Specifically, several key local issues helped to instigate this research. These began with the closing of Centralia College and culminated with the release of Huron County Study - Background Report (The Rural Voice, 1996, p. 18; Wallace, 1996; Huron County Planning and Development Department, 1991). Ultimately, this study was undertaken by the Huron County Federation of Agriculture after a 1991 report on the county’s economy identified agriculture as a declining industry (Huron County, 1991, p. 6). The report, published by the Huron County Planning Department, stressed the importance of moving to a new emphasis in economic development for the county (Huron County, p. 42). Notably, the 1997 revisions to the Huron County plan indicate a renewed focus on agriculture and recognition of its broader role.

There is a general trend of rising service sector employment in Huron County; a phenomenon found in many regions. Table 1 and Chart 1 on the following page indicates that there were 6,100 employees working in education, health, welfare, professional, accommodation and food service industries living in Huron County in 1981. This increased to 8,400 service sector jobs by 1991, a 37.7 per cent increase over a ten-year period (Statistics Canada, 1991). Trade finance and government services also grew substantially in the 1971-1991 period. Overall, the emergence of the service sector as a prime employment sector is clear. What is not clear is how this relates to the traditional primary and manufacturing employment in rural areas.

Source: Statistics Canada 1975, 1984 and 1991.

(1) Includes agriculture, forestry, fishing, trapping, mines, quarries and oil well industries.

(2) Includes retail and wholesale trade.

(3) Includes education, health and welfare, professional and accommodation and food service industries.

(4) Discrepancies in totals are due to rounding by Statistics Canada tabulations.

Source: Statistics Canada 1975, 1984 and 1991.