The Economic Impact of Agricultural
Production and Processing
About These Brochures

The importance of agriculture is evident by its contribution to the economy. These brochures provide an estimate of the economic impacts of agriculture using the most recent data available on production (e.g., farms) and primary agricultural processing activities (e.g., cotton ginning). They focus on the total economic impact of agriculture on employment, income and taxes. The total economic impact is the sum of direct effects, indirect effects, and induced effects.

Direct effects represent the economic activity from businesses defined to belong in agriculture (i.e., producers, processors, and agricultural support services). Indirect effects represent the economic activity from businesses and organizations not traditionally thought of as agriculture-related (e.g., education, information, and insurance) though they may supply goods and services to agricultural businesses. Indirect effects are a basic response to agricultural activities and reflect the interdependence between businesses and industries throughout the economy.

Induced effects simply reflect spending by households as a result of direct and indirect effects. Data for the direct effects and estimation of the indirect and induced effects came from a well-known input-output modeling system called Impact for Planning and Analysis, or IMPLANĀ®, software that is updated annually by the Minnesota IMPLAN Group, Inc. This report divides agriculture into eight distinct sectors and the rest of the economy into 10 distinct sectors.