Document Type

Value-Added Agriculture

Publication Date



Tennessee’s agriculture-related businesses belong to an important and ever-changing part of the state’s economy. Many of these changes have been dramatic. In 1950, more than 30 percent of Tennessee’s population resided on farms. In 1990, this number was just over 2 percent. Furthermore, in 1970, farm production accounted for 8 percent of the state’s gross product. By 1996, production agriculture contributed 1.2 percent to the value of Tennessee’s total production. However, these percentages can be misleading. While it is true that the relative share of the state’s total economy contributed by production agriculture has declined in percentage terms, the total dollar output of this sector was more than $2.2 billion in 1997, up almost $500 million from 1987.

What does this mean in terms of the importance of agriculture in Tennessee? Well, it depends on what you are looking at and what you consider to be agriculture. While it is true that the number of people who depend on production agriculture (farming) for their livelihood and the relative share production agriculture and its related services as a percentage of the state’s economy have both declined in recent years, every Tennessean depends on agriculture. Agriculture-related businesses produce, process and distribute the food we eat; many of the clothes we wear; the lumber we use to build houses, schools and churches; and the plants we enjoy in our homes and landscapes. Agriculture is also the source of raw materials used in manufacturing many products, ranging from automobiles to zippers, that we use every day.

It takes a vast network of businesses known as the “agribusiness sector” or “agribusiness complex” to provide us with these items. This sector is made up of three basic parts: the businesses that supply inputs to farms, the farms that produce raw agricultural products and the businesses that process these raw products and distribute final goods to consumers.

This agribusiness network creates many jobs for persons who probably do not connect themselves with agriculture. A worker in an industrial plant may make gauges for farm machinery or a textile worker may make clothing from cotton fabric. In fact, 23 percent of the 2.2 million employed persons in Tennessee work in the agribusiness sector.

Publication Number

PB1660-2M-1/01 E12-4115-00-002-01

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