In its products and its purchasing power, agriculture is vital to Maryland economy

On The Farm

March 05, 2006|By TED SHELSBY

Agriculture is big business in Maryland.

Just how big, well that depends upon whom you ask.

Officials at the Maryland Department of Agriculture add up what farmers are paid for their grain, livestock, milk and nursery products and declare that farms sales totaled $1.7 billion last year.

But Maryland's top business advocate, Aris Melissaratos, the secretary of the Department of Business and Economic Development, would say they have the decimal point in the wrong place.

He uses a broader definition of agriculture, one that includes all aspects of the production of food and fiber, and concludes that agriculture is Maryland's "oldest and largest industry."

"It's a $17 billion [a year] business when you include horses, poultry and forest products," Melissaratos told the about 250 farmers and farm officials attending the Governor's Agricultural Forum in Upper Marlboro recently.

Farming's financial impact spreads well beyond farm fences.

Less than one-third of agriculture-related jobs are linked to on-farm production, according to a 2002 study of state agriculture commissioned by the University of Maryland.

In 2000, production agriculture - farms that produce crops or livestock - employed 18,400 workers, according to the study. But when one factors in related jobs in agricultural chemicals, feed, seed, farm machinery and agricultural services (farm credit, storage, transportation, equipment repair, marketing and food processing), the figure jumps to 63,430.

Throw in other farm-related sectors, including forestry and fishing, as well as the wholesale and retail trade of agricultural products, and farm-related employment reached an estimated 350,618 workers in 1997, according to the study.

Other findings of the study related to the economic impact on Maryland's economy in 2000 include:

More than 300 companies were involved in farm-related food processing, including the packing and processing of beef, poultry, flour milling and vegetable processing. In 2000, these companies employed more than 21,200 workers who collected $787 million in wages and salaries.

Other agricultural-related manufacturers, including those who make chemicals and farm and garden machinery and equipment, employed 630 workers, with $34.8 million in wages and salaries.

The broader agricultural inputs and services sector - which takes in a variety of positions including feed, seed and fertilizers suppliers, farm machinery, veterinary, transportation, insurance and financial services - employed 23,200 workers who earned $921 million.

"Seventeen billion, that sounds a little high to me," said state Agriculture Secretary Lewis R. Riley. "I wouldn't want to be quoted on that figure. I'm not sure it's correct."

Riley said he likes to use "farm gate sales," which he described as the amount of money farmers get for their products. "That's $1.7 billion," he said.

Many agriculture officials tend to dance around the higher estimate.

"I like to say that agriculture is the most important industry in the state," said Assistant Secretary of Agriculture S. Patrick McMillan. "In terms of its impact on everybody's quality of life, including the open spaces that everybody seems to want, it's No. 1.

"If it's based on the acres of land covered, agriculture is the biggest industry. We have a big footprint, it covers about a third of the state."

Bruce L. Gardner, professor of agricultural resource and economics at the University of Maryland, College Park and former assistant secretary at the U.S. Department of Agriculture, thinks Melissaratos's estimate is high.

Gardner said he preferred using an economic multiplier of three times cash receipts (total sales at the farm level) to determine that farming has a $5 billion to $5.1 billion impact on Maryland's economy. He said that it is unrealistic to factor in the economic impact of grocery stores because they sell chicken.

"That's assuming that if the chickens didn't come from Maryland they wouldn't have any chicken in their stores." Gardner said.

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