Finding solutions to the growing rural workforce shortage requires understanding the current reality. Second in a series.
September 18, 2019
Never have so few produced so much agricultural bounty.
“Agriculture, food, and related industries contributed $1.053 trillion to U.S. gross domestic product (GDP) in 2017, a 5.4% share,” according to USDA’s Economic Research Service (ERS). “The output of America’s farms contributed $132.8 billion of this sum — about 1% of GDP.”
The overall contribution of the agriculture sector to GDP is larger than this, because sectors related to agriculture — forestry, fishing and related activities; food, beverages and tobacco products; textiles, apparel and leather products; food and beverage stores; and food service, eating and drinking places — rely on agricultural inputs in order to contribute added value to the economy, ERS adds.
In fact, the 2019 Food and Agriculture Industries Economic Impact Study estimates the number of jobs in food and agriculture-related industries at 45.8 million, and the economic impact of the total food industry at $7.06 trillion.
For the purpose of the study, the food industry includes any businesses involved in food agriculture, food manufacturing, food wholesaling or food retailing. To measure the total economic impact of the sectors, the analysis includes the indirect and induced economic activity surrounding these industries, which captures upstream and downstream activity.
For example, when a farm equipment retailer hires new employees because farmers are buying more tractors, experts consider the new salaries as an indirect impact. Similarly, when a retail associate spends her paycheck, an induced economic impact occurs. Together, these impacts have a multiplier effect on the already formidable direct impact of food and agriculture.
Direct on-farm employment in 2017 accounted for approximately 2.6 million jobs, or 1.3% of U.S. employment, according to ERS. Employment in industries related to the agriculture and food industries supported another 19 million jobs. All told, 21.6 million full-time and part-time jobs in the U.S. — 11% of total U.S. employment — were related to the agriculture and food sectors.
Self-employed ranch operators and their family members continued to represent the lion’s share of on-farm labor through the turn of the century, but hired labor was growing at a faster rate.
“Both types of employment have been in long-term decline, as rising agricultural productivity due to mechanization has reduced the need for labor,” ERS analysts say. “According to data from the National Agricultural Statistical Service’s Farm Labor Survey (FLS), the number of self-employed and family farmworkers declined from 7.60 million in 1950 to 2.06 million in 2000, a 73% reduction.
“Over this period, average annual employment of hired farmworkers