Masters Theses

Date of Award

12-1976

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Benny Ray McManus

Committee Members

Brady J. Deaton, Thomas H. Klindt

Abstract

The study was concerned with the magnitude and Importance of agribusiness firms in the Tennessee economy. The principal objectives were to determine the degree of economic activity and employment of agribusiness located throughout Tennessee and to estimate the impact of agribusiness in the Tennessee economy. The agricultural subsector was set apart from the Tennessee economy and was viewed as an open model economy. The subsector was delineated as to agricultural inputs firms, agricultural output firms, and agricultural production. The method used in the analysis employed multipliers taken from previous studies which when multiplied by data obtained by a statewide survey of agribusinesses gave direct, indirect, and total impacts of agribusinesses. Two Leontief type multipliers were used. Modified employment impact and modified unit output multipliers showed the degree of economic impact of agribusinesses on employment, payrolls, gross sales, and capital investment. Adapted employment impact and adapted unit output multipliers were used to show the impact of a 10 percent increase in agribusiness. Agribusiness impacts were examined on statewide and regional bases. For regional analyses the State was divided into East, Middle, and West Tennessee. The 1,214 agribusiness firms surveyed employed 26,526 persons and paid $214.3 million in wages and salaries. Gross sales amounted to $1.9 billion and capital investment was $583.5 million. Most agribusiness, 63.3 percent, dealt with farmers in the county in which the businesses were located, 24.3 percent in adjacent counties, 5.2 percent in the rest of the State, 6.8 percent in other states, and 0.4 percent internationally. When indirect impacts were added to direct impacts agribusiness increased to $2.3 billion of gross sales, $690.4 million of capital investment, 30,960 jobs, and $250.9 million of payrolls. Assuming a 10 percent increase in agribusiness, gross sales rose to $2.6 billion, capital investment to $787.2 million, jobs increased to 34,397 and payrolls equaled $278.8 million. The general conclusion of the study was that agribusiness is a major subsector of the Tennessee economy. Measurement of the agribusiness subsector without the inclusion of indirect effects would underestimate the impact of agribusiness on the Tennessee economy.

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