The economic importance of agricultural production in selected rural persistent poverty counties in Tennessee

It has been suggested that the agricultural sector has little potential as an instrument for rural economic development in Tennessee. However, many persistent poverty counties in Tennessee have relatively large agricultural sectors. Therefore, agriculture may have a greater impact on the economies of rural persistent poverty counties than on the economies of other rural counties. This study estimated the indirect and induced income and employment effects generated by production of agricultural commodities in selected rural persistent poverty counties in Tennessee.

These rural persistent poverty counties were grouped into relatively self-contained economic regions based on similarity of enterprise mix, spatial proximaty, and transportational routes. Type 1 and Type 111 income and employment multipliers were estimated for each of these regions using the IMPLAN input/output model. Indirect and induced income and employment effects were derived from these multipliers.

The Type 1 income multipliers ranged from a low of 1.47 in TPPR 6 to a high of 1.77 in TPPR 4 while Type 111 income multipliers ranged from 2.12 in TPPR 1 to 2.83 in TPPR 4. The Type 1 employment multipliers ranged from a low of 1.25 in TPPR 6 to a high of 1.46 in TPPR 1 while Type 111 employment multiplier ranged from 1.61 in TPPR 6 to 1.80 in TPPR's 1 and 2.

The results generated by this study indicate that rural persistent poverty counties which are proximate to major metropolitan areas do not generate as much indirect or induced income or employment from agricultural production as rural persistent poverty counties which have no neighboring major metropolitan areas. Contrary to hypotheses of the study, average farm size and amount of cash receipts were not found to be correlated with the Type I or Type III income and employment multipliers or the indirect or induced income or employment effects.

The income and employment multipliers generated by this study represent the additions to income and employment that would accrue if demand for agricultural commodities produced in the study area were increased by one dollar. Additional information concerning the ability of persistent poverty counties to respond to increased agricultural demand is needed before economic development decisions can be made. Furthermore, the size of the multipliers generated by agricultural production relative to multipliers in other industrial sectors must be evaluated. Finally, the effects of governmental agricultural programs must be appraised when agricultural production is considered as an economic development option.