The total impact of the agriculture sector in Huron County is estimated above. From this we can see the magnitude of the agricultural sector in Huron County. Agriculture generates substantial sales volume throughout the economy. In fact, in 1991, Huron County produced more farm gate sales than four provinces. This is significant considering that the county population is only around 55,000.

Estimated expenditures of $2 billion are generated from agriculture producers and agriculture-related businesses within Huron County. This is the estimated total flow of sales and expenditure generated by farm operations as well as sales related to the agricultural sector. While estimates indicate that 4,428 jobs existed in the agriculture sector in 1996, a further estimation of 12,128 jobs were tied indirectly to the agriculture sector in Huron County through expenditures by agriculture-related businesses. Clearly this has a significant impact on the Huron County economy.

Given the trend of declining primary employment, it would seem natural to focus economic development and planning into industries that nurture business opportunities in other sectors. However, declining primary and manufacturing employment is not necessarily a death knell to these industries. As Kulshreshtha (1988, p. 432) noted, the indirect benefits of primary sectors are often more important than the direct impacts. This is the case in Huron County, where substantially more employment was identified as agriculture-related than in direct agriculture. This is something planning practitioners should bear in mind while evaluating future development in the county.

In the larger economy, there has been a steady decline of the primary and manufacturing sectors and an increase in the services sector. Because of the decline in primary and manufacturing sectors, planners have placed their emphasis on economic diversification (Troughton, 1992, p. 39). This is despite research that proves that the impacts of the primary activities are often under-estimated due to a lack of investigation of the indirect and induced impacts of the sectors (Kulshreshtha, 1988, p. 432). Signs such as the continued rise in the value of agricultural gate sales and the size of indirect employment indicate that the agriculture sector is not necessarily on the decline, but merely shifting its focus from production to providing services.

In Huron County, the decline of the primary and manufacturing sectors was combined with an accompanying shift of employment focus to the service sectors. The two trends do not occur in isolation of one another and are in fact related. The economy may be more service based, but it still needs base industries to provide services to. For example, the types of businesses related to the agriculture sector include farm machinery and equipment wholesalers, general freight and trucking, building development and construction, insurance and real estate, veterinary services, services such as accounting, as well as garages and other types of general repair. This indicates the inter-relatedness of the entire economy. While Statistics Canada subdivides these activities into individual sectors for the Population Census of Canada, all of these provide services to the agriculture sector and are indeed the agriculture-related businesses of the Huron County case study.

In Huron County, agriculture continues its strong role. While the numbers of direct agriculture jobs are down, the overall numbers including agriculture-related jobs are quite strong. Therefore, the first recommendation for Huron County is to continue to review planning and economic development policies to guarantee the continued support of agriculture and other primary sectors in the county. The second recommendation is to provide new policies that nurture and encourage new economic activity in the county. This policy should not preclude the further development of existing industries, nor focus on any one particular industry over others.

Although these recommendations run contrary to the provincial and national trends, they are based in Huron County's unusual situation of consistently strong agriculture sector performance. Huron County's entrenched agriculture system with large agriculture-related employment indicates that the sector will remain a vital component of Huron County's overall economy. Planners, stakeholders, and decision-makers in Huron County are recognizing this fact. This research provides a well-documented analysis that indicates that Huron County's strengths lie in the agriculture sector with significant direct, indirect and induced employment. This sector, along with the other basic sectors of manufacturing, mining, forestry and logging, fishing and trapping, and the support sectors such as health, social services and wholesale services, provides an excellent basis for much of the rest of the economy. The future of the agriculture sector therefore lies in continued development of the "agriculture and related" industries.

As stated, the researchers believe strongly that new employment and economic opportunities can be found within and related to the agriculture sector. This belief does not dictate that the sector should be the sole interest for the future of the county. The potential for agriculture services to decline is a constant concern especially as the trend to greater agribusiness control of farms and declining farm numbers exists. Indeed, it has been the services sector that has provided the bulk of employment growth in the county, including the agriculture sector. However, it must be remembered that these services require base industries such as the agriculture and other primary sectors to support them. Therefore, these recommendations have been created stressing the need for a base sector to drive the service sector.

Lee, Chinook. 1991. "Recent Developments in Construction of Input-Output Tables with Use and Make Matrices: An Application to U.S. Agriculture" Canadian Journal of Agriculture Economics. Vol. 39, 795-803.

The Rural Voice. "The Bang of the Bucks." August 1996.

Appendix 1: Table 17: Values for Charts 3 and 4, Huron County and Ontario Farms Classified by Major Product, 1991

Appendix 2: Survey for Agriculture-Related Businesses

Miscellaneous crops include, among other, garlic and sunflowers.

Source: OMAFRA, 1995, p. 31.

Indirect Impact Methodology

The indirect impact methodology was based on an "input-output-like" approach using a telephone survey completed in 1996. Questions focused on the sales and employment for agriculturally related businesses in Huron County. The study continued in 1997 with in-depth interviews conducted with some of the same businesses phoned the prior year. The study of these sampled businesses provided an estimate of the economic impact of agriculture-related businesses for the county (indirect employment and sales.)

The following is a detailed discussion of the exact methodology used in the indirect impact study. A handbook on the methodology of measuring the economic impact of agriculture is also available from the authors.

The survey was based on a random sample of businesses from a list of agriculture-related businesses provided by Huron County Federation of Agriculture directors. After verification, the final list of agriculture-related businesses had 448 entries. The survey asked the respondent to give information over the phone regarding employment and the value of sales related to the agriculture sector. Of the 220 businesses, all gave employment data and 154 provided data on the value of sales.

A concern of the researchers was the representativeness of the list of agriculture-related businesses. During the summer of 1997, further research was conducted in three municipalities in the county to verify the 1996 survey results. The three areas were Stanley and McKillop Townships and the Town of Wingham. Researchers visited each of these areas to establish a better estimate of the actual number of agriculture-related businesses within each municipality. Visual checking, the telephone directory, municipal tax rolls, business lists and key informants were utilized in this task.

The original estimations for the number of agriculture-related businesses in Stanley, McKillop and Wingham were 35, 38 and 30 respectively. After further study, the new estimation of agriculture-related businesses in McKillop, Stanley and Wingham were 52, 50 and 128 respectively. The researchers determined that the 1996 findings underestimated the number of agriculturally related businesses. Figures were therefore adjusted upwards.

As can be seen, the list made by the Huron County Federation of Agriculture directors was more accurate in the rural (i.e. Stanley and McKillop) municipalities than in the urban area (i.e. Wingham). It was therefore decided that any changes would need to be weighted according to the rural/urban difference. The multiplier for the urban areas is taken from the Wingham example and remains at 4.27. The multiplier for the rural setting is devised by adding the Stanley and McKillop figures (73/102=1.4). Based on the addresses on the original list of agriculture-related businesses, 80 per cent of the businesses are rural and 20 per cent are urban. Therefore, the urban multiplier is .85 (.2 x 4.27= .85). The rural multiplier was found to be .88 (.8x1.39x.8= .88). For the entire population (80 per cent of the rural area plus 20 per cent of the urban area), the multiplier thus becomes 1.73 (.88+.85 =1.73).

This multiplier is used to estimate the actual number of agriculture businesses in Huron County. The number of businesses originally derived from the list developed by the HCFA directors (448) is increased using the multiplier found in the second year of the study (448x1.73=775). The new estimate for the number of agriculture-related businesses in Huron County is 775.

Further analysis was also completed in 1997 on the accuracy of the sales and employment data collected in 1996. Intensive personal interviews with twelve owners of agriculture-related businesses who responded to the phone interview in 1996 were conducted. During the interview the respondents were asked to divulge their businesses’ total gross sales, the percentage of these sales associated with agriculture, and the number of employees for the year under study (1995). These numbers were then compared to the original data set collected in 1996 using the actual survey responses via the telephone. Findings from the interviews revealed that all sales and employment data was underestimated. The interviews provided the researcher with multipliers for the total gross sales (1.14), the percentage of sales related to agriculture (1.11), and the number of employees (1.82).

Total gross sales for the businesses surveyed include sales related and unrelated to the agriculture sector. The sample included agriculture-related businesses that sell to and buy products from agriculture, but they may also sell to, and buy from, other sectors of the economy. Also note that total gross sales are divided by the location of those sales. The businesses in the sample generate sales (i) inside Huron County, (ii) outside Huron County, but inside Ontario, and (iii) outside Ontario. The figures below reflect these divisions. The original estimate in 1996 for total gross sales remaining inside the county was $276 million for the 154 businesses surveyed. Using the multipliers regarding total gross sales (1.14) we arrive at a new estimate of $315 million (276x1.14=315) for the total gross sales remaining inside the county by the businesses surveyed.

The original estimate in 1996 for the total gross sales generated outside Huron County by the businesses surveyed was $213 million. Using the multipliers derived above, researchers estimate that $243 million in sales was generated outside Huron County by the sample businesses (213x1.14=243).

The original 1996 estimate for total gross sales generated outside Ontario by the businesses surveyed was $161 million. The new estimate, using the multipliers, is $184 million (161x1.14=184) for the businesses surveyed.

As stated, agriculture-related businesses in Huron County have sales both related and unrelated to agriculture. Researchers separated out the sales unrelated to agriculture to find agriculture-related sales generated inside Huron County, outside Huron County and outside Ontario.

The original 1996 estimate for agriculture-related sales generated inside Huron County was $234 million for the 154 businesses surveyed. Using the multipliers regarding the sales (1.14) and percentage of sales to agriculture (1.11), the new estimate for agriculture-related sales remaining inside Huron County is $296 million (234x1.14x1.11=296) for the businesses surveyed.

The original 1996 estimate for agriculture-related sales generated outside Huron, but inside Ontario, was $188 million for the businesses surveyed. Using the multipliers derived above, we can estimate that $238 million in agriculture-related sales was generated outside Huron County by the businesses sampled (188x1.14x1.11=238).

The original estimate for total gross sales generated outside Ontario was $123 million. The new estimate, using the multipliers, is $156 million (123x1.14.x1.11=156) in sales generated outside Ontario by the surveyed agriculture-related businesses. Details can be found in Table 14.

Source: Agriculture-related business survey.

Taking the figures from the sampled businesses, researchers found that Huron County agriculture-related businesses generate $1.6 billion (315x5.03=1,585 million) in total gross sales inside Huron County. These are the total gross sales that are generated within the county. The total gross sales generated outside Huron County is approximately $1.2 billion (243x5.03=1,222 million). The total gross sales generated outside Ontario is approximately $926 million (184x5.03=926 million). It is important to note that these amounts include sales both unrelated and related to agriculture. Businesses in the study that buy products from, or sell products to, agricultural producers may also conduct business with other sectors of the economy. The figures above indicate total sales of all agriculture-related businesses in Huron County.

Total agriculture-related sales for the entire county can be derived using estimates of the agriculture-related sales generated by the businesses surveyed. Approximately $1.5 billion (296x5.03=1,489 million) in agriculture-related sales is generated within Huron County by agriculture-related businesses. The total agriculture-related sales generated outside Huron County (but inside Ontario) is approximately $1.2 billion (238x5.03=1,197 million). The total agriculture-related sales generated outside Ontario is approximately $785 million (156x5.03=785 million). This is illustrated in Chart 11.

Source: Agriculture-related business survey.

The original 1996 estimate for the total employees working in the surveyed businesses was 2,540. The difference between the employment data collected in 1996 and the revised data collected in 1997 resulted in a multiplier of 1.82 (see above). Using the multiplier, the revised estimate for total full-time equivalent employees at the businesses surveyed is 4,623 (2,540x1.82=4,623). This total includes all employees of the businesses surveyed, regardless of whether or not they perform activities related to the agriculture sector. The full-time equivalent employees working within Huron County to serve the agriculture sector 3,465 (1,904x1.82=3,465) for the businesses surveyed.

The survey also illustrated that there are also jobs generated outside the county by Huron agriculture-related businesses. The total number of full-time equivalent jobs outside Huron County supported by the businesses surveyed 823 (452x1.82=823). Of these, 588 are employed to service the agriculture sector (323x1.82=588) for the businesses surveyed.

Source: Agriculture-related business survey.

Source: Agriculture-related business survey.

Source: Agriculture-related business survey.