UC Davis research finds local farmers and ranchers who sell directly to consumers have double the regional economic impact compared with food producers who don't participate in local marketing.
The UC Davis study divided local farmers and ranchers into two groups: those who sell directly to consumers and those who sell exclusively through wholesale and commodity markets.
Agricultural economist Shermain Hardesty led the study. Dollar for dollar, Hardesty and her colleagues found a big difference in terms of regional economic impact.
"For every dollar of food that is produced locally and sold locally, it's going to generate an additional 44 cents of economic impact compared to other farming activity that is not sold locally."
Hardesty identified several reasons for the economic boost. One factor was that farmers and ranchers who market locally also spend more locally when it comes to labor and supplies like seed, packaging materials and utilities.
One way to think about it, Hardesty says, is to imagine a tomato farmer who buys irrigation supplies at a local hardware store.
"Her spending then generates income for her farm and for her employees and her suppliers and also the employees of her suppliers, including the salesperson at the hardware store," Hardesty explains. "And then those households spend some of their income on products and services within the region."
The study focused on farmers and ranchers who sell through farm stands, farmers markets and community supported agriculture programs in Sacramento, Yolo, El Dorado and Placer counties.
In the four-county region, direct marketing food producers make up 19 percent of the region's farms and only 4 percent of its agricultural production.
Funding for the study was provided by the UC Division of Agriculture and Natural Resources.