Organic “Hotspots” Boost Local Economies

Wednesday, May 25, 2016

The nutritional and environmental benefits of organic agriculture are two of the main reasons that shoppers seek out organic foods and other products. But did you know organic is also good for the local economy?

A new report from the Organic Trade Association shows that there is less poverty and higher household income in places where there are “organic hotspots” – concentrations of organic agriculture activity in neighboring counties.  

Penn State Agricultural Economist Dr. Edward Jaenicke, author of the report, found that median household income rose by more than $2,000 and poverty rates declined by as much as 1.35 percentage points in communities in or near these organic “hotspots.” It’s likely that sustained economic activity generated by organic agriculture in these areas is fueling the growth of downstream businesses, including food manufacturing operations and companies that sell organic goods.

Many of the hotspots are where you might expect – the west coast, parts of New England and sections of the Midwest – but there are numerous “outliers” that have organic production but don’t quite qualify as hotspots.

You may be thinking that the positive trends near hotspots may be occurring because wealthier counties attract organic agriculture, but Dr. Jaenicke said he was careful to control for what he called “reverse causality.” 

Moreover, he found that the economic benefits are unique to organic agriculture. The same impacts do not appear near concentrations of non-organic agriculture. 

Despite these benefits, fewer than 1 percent of American farms are certified organic, and producers are struggling to keep up with soaring demand for organic food.

You can help foster growth in this sector by urging Congress to invest in organic farming. We need to help more farmers make the switch to organic for the sake of biodiversity, soil health, and it turns out, for the good of local economies. 



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