Agriculture: Assisting the Economy

America is a nation of opportunity for businesses big and small, despite our economy’s current challenges. The country’s economic state dictates a business’ vitality and lifespan, but even in financial difficulty, one industry has always persevered – agriculture.

Historically, agriculture has been a consistent job provider in society because of food necessity. This fundamental principle has made the industry indispensable to our economy, as discussed in one of my earlier blogs. In the 1800s, nearly 80 percent of the population was involved in farming. Wartime food production added to workforce numbers and the industry’s significance in the 1930s. National and global market demands keep the industry afloat today.

"It's a bright spot in the economy," said Standard & Poor's equity analyst Adrian Compton.

U.S. Department of Agriculture (USDA) Chief Economist, Joseph Glauber, forecasts 2009 returns to be the second highest on record, farm income to be above its 10-year average and farm debt at an all-time low.

“We attribute the high level of expected farm income to strong crop receipts; reflecting higher crop prices, increased international demand and support from government payments," said Compton.

These factors have notably affected America’s financial system by funneling jobs and money into the market.

Farm Economy Statistics

• Figures released in 2005 from the USDA’s Economic Research Service (ERS) indicate that farm and farm-related employment are responsible for providing income to 167,001,363 individuals in the U.S.
• One of every five U.S. jobs is associated with the ag industry (Macoupin County Agricultural Literacy Program - MCALP).
• Forty-eight thousand industry jobs are created each year (MCALP).
• The industry channeled $140 billion to the economy in 2008 in the form of net income to producers from crop and livestock production, farm services performed and payouts of wages to workers, rents to landlords and interest to lenders, with similar projections for 2009 (Kiplinger Agriculture Letter).
• Farm producers rank first on Sageworks’ “Top Performing Industries by Sales Growth” within the past 12 months.

The industry boasted impressive gains in 2008 with similar projections for 2009.

"It is expected that 2009 will be another good year for the farm economy," ERS stated in its 2009 Farm Sector Income Forecast, "bolstered by strong demand for feed crops, oilseeds and food grains."

Because the agriculture industry relies on multiple participants for it to function, a variety of employment opportunities exist (more than 200 job types according to MCALP), contributing to its growth and dependability as both a part-time job and career source. Those working within the industry can be either salaried or self-employed. Industry-related jobs run the gamut from machinery suppliers, to plant operators to farmhands and involve farm production and processing, whole and retail trade and farm management and education.

Farming is not a cure-all, however, for those experiencing financial straits. Overproduction, fluctuating prices, variable weather and costly applications, among other factors, complicate the industry, which jeopardize sales and profit. The industry is kept in check by federal subsidies.

Agriculture’s presence will perpetually remain in the economic forefront as a commodity industry. Working in unison, American farmers, farm-related businesses and the government will determine the health and longevity of the industry as an employer.

How can other sectors of the U.S. economy learn from agriculture? What other industries are as far reaching as farming?

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