Farms don’t just grow our food – they’re important businesses that contribute to our economy, too! Farms generate economic activity that flows through local communities, and ultimately, Texas and the nation as a whole. Check out these three ways Texas family farms grow our economy all thanks to water.
1. Jobs
Texas family farms support jobs – lots of them! In fact, the Texas Department of Agriculture reports that 1 in 7 working Texans has a job in agriculture.
Joe Outlaw, Ph.D., co-director of the Agricultural and Food Policy Center at Texas A&M University, said the most obvious way agriculture supports jobs is that farmers need a lot of labor to run their daily business. There are also many other jobs that exist in support of agriculture like those in agronomy, transportation, elevators, and gins. Manufacturing and food industry jobs are also supported by agriculture.
“In addition, all the various businesses [farmers] purchase from hire employees to help serve farms and ranches,” he said.
2. Stimulate Economic Activity
Water used to grow bountiful crops on Texas family farms support a thriving economy. Outlaw said family farms spend a great deal on inputs and equipment to grow their crops such as land, sowing and harvesting equipment, seeds, fertilizer, labor, fuel, transportation, insurance and electricity. The money they spend flows through local communities and ultimately the statewide economy.
“They also buy food, clothes, entertainment and household items that adds to economic activity of the state. All the businesses they buy from earn money that they in turn spend, further stimulating the economy,” Outlaw explained.
The impact agriculture has on the Texas economy is quite significant. Outlaw said agriculture generally has an impact factor of about two.
“Meaning that every dollar that is spent by farmers and ranchers in the state turns over two additional times, adding to economic activity,” he said.
3. GDP
Texas farmers produce a lot of food and fiber each year, which contributes to the state’s gross domestic product (GDP). According to the Bureau of Economic Analysis, “GDP measures the value of the final goods and services produced.”
“In 2019 Texas A&M AgriLife Extension estimated that agriculture in the state contributed $159.3 billion to the state’s economy, which represents 8.6 percent of the state’s total GDP,” Outlaw said.
A vibrant agriculture industry in combination with the state’s other leading industries are vital to Texas’ long-term success.
“Having a diverse state economy that is dependent on oil and gas, agriculture, manufacturing and technology firms allows Texas to weather economic downturns much easier,” Outlaw explained.
Farms are Vital
It is easy to see just how important Texas family farms are to the economy, which is why it is essential for them thrive and remain in business.
“When agriculture is doing poorly, it is seen immediately in local communities. Fewer inputs are purchased, fewer eat out and shop all of which hurts the local economy,” Outlaw explained.
Outlaw said it is important to remember that more than 95 percent of Texas farms are family owned. These farms not only provide income that supports their immediate families, but the local economies where they live throughout the state, too.
“New members of Congress often ask about spending billions of dollars to support agriculture during times of low prices, and I remind them that the money is vital to keep the local infrastructure in place so that when the market prices rebound, the farmers have an elevator or gin to sell to, or a local equipment dealer to buy replacement equipment or parts as this carries over to local economies as well,” he said.
