California's specialty crop industries have a significant impact on the state's economy yielding nearly $15.9 billion annually, or $43.5 million each day of the year, in "ripple effect" business activity as a result of collective industry spending.
The finding is based on research commissioned by the Buy California Marketing Agreement (BCMA), administrators of the "California Grown" program.
"The research clearly indicates that California's specialty crops touch every aspect of California life and positively impact the economic vitality of our state," said Maile Shanahan Geis, BCMA executive director.
"Despite the challenges facing California agriculture – from intense global competition to the growing water crisis – the state's specialty crops prove that the industry continues to be a world leader in agriculture production, which is a title Californians should be proud to protect."
The "California Grown" campaign is an initiative to educate Californians about the importance of choosing California-grown products whenever they shop.
The study examined the financial impact of 15 California specialty crops including the dairy and wine sectors, plus asparagus, avocados, cherries, cut flowers, figs, kiwifruit, nectarines, olives, peaches, pears, plums, raisins, and table grapes.
The study, conducted by Dennis Tootelian, director of the Center for Small Business at California State University, Sacramento, indicates the expenditures by the state's specialty crop growers create a ripple effect spurring the growth of more than 137,435 jobs.
When it comes to labor income, more than $5.2 billion is generated as a result of industry spending, which is more than $14.3 million each day of the year. These dollars go to wages and salaries for new employment, plus increasing incomes for those already in the labor force — a portion of which is reinvested throughout California's economy to pay for an array of goods and services.
Additionally, nearly $567.7 million in indirect business taxes, such as property taxes, excise taxes, fees, licenses and sales taxes, not including income taxes, are generated by these specialty crop industries.
The research extrapolates that, depending on how these funds are used, this funding pays for many state and local programs that further benefit California's communities where specialty crop growers live and work.
For example, the business tax dollars they create could be used to help pay for the entire budget of the California Department of Fish and Game's 2008-2009 fiscal budget nearly two times over.
"The goal of the study was to demonstrate the overall impact of the specialty crop industry under the 'Californian Grown' umbrella and its ability to generate business activity, employment, personal income and taxes for other industries and the state overall," Tootelian said.
"Even though we took a conservative approach to measuring the data, the results showed a very sizeable impact to the financial health of California."
The report demonstrates the impact these specialty crops have on the state's economy annually, based on averages during a three-year time span from 2005-2007. Because agricultural revenues and expenditures can fluctuate significantly from year-to-year depending on climate, pest, market and other conditions, an "average year" was created based on historical and industry operating statistics.
The study was implemented by using industry statistics, facilitating grower surveys and interviews and analyzing the data through the IMPLAN model, which examines economic relationships between businesses and between businesses and consumers. This impact analysis then measures changes in economic variables on an entire economy.
Data provided through IMPLAN mainly comes from federal government sources. These include the U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, and the U.S. Bureau of the Census.
Cash income by commodity groups for 2005-2007 was obtained from the Agriculture Statistical Review, published in the California Agricultural Resource Directory 2008-2009.
The full economic impact report and related fact sheets can be found at www.californiagrown.org.