The Growing Importance of the Environmental Horticulture Industry in the Agricultural Economy of the Northeastern United States

By Shields, Martin; Willits, Fern K. | Agricultural and Resource Economics Review, October 2003 | Go to article overview

The Growing Importance of the Environmental Horticulture Industry in the Agricultural Economy of the Northeastern United States


Shields, Martin, Willits, Fern K., Agricultural and Resource Economics Review


This study examines several aspects of the Environmental Horticulture Industry (EHI) in the northeastern United States. First, the EHI is compared to other agricultural sectors in the region. The sector's growth is found to far outpace growth in traditionally important crops and commodities. The study then takes a closer look at the EHI in Pennsylvania, utilizing survey data and the IMPLAN input-output model to estimate the overall economic contributions of the industry to the state's economy. Results suggest that the EHI generates nearly $3.3 billion in value-added and more than 107,000 state jobs through direct, indirect, and induced effects. Finally, survey data are used to identify and discuss important issues that land grant universities throughout the Northeast can address as they seek to strengthen the sector.

Key Words: agricultural development, economic contribution, environmental horticulture

Fueled by a strong national economy in the 1990s, the Environmental Horticulture Industry1 (EHI) has become one of the fastest growing segments of production agriculture in the United States. Between 1992 and 1997, the U.S. Census of Agriculture shows the number of U.S. farms growing nursery and greenhouse crops increased by 43%, to a total of 67,816 establishments [U.S. Department of Agriculture/National Agricultural Statistics Service (USDA/NASS)].

Sales have also exhibited strong growth. Correcting for inflation, producer sales of floriculture and greenhouse products rose by more than 18% from 1991 to 2000, exceeding $13.2 billion [USDA/ Economie Research Service (ERS)]. While data are not yet available for analysis from the 2002 agricultural census, it appears likely the industry has continued to expand. Moreover, this growth has not been limited to the production of plants and trees. An analysis ?? County Business Patterns (U.S. Bureau of the Census, 2000) data shows that an increased demand for EHI products and services had led to growth in a number of related sectors, such as landscaping goods, wholesale and retail trade operations, and the landscape service industry. Thus, EHI growth has not only created jobs in agriculture, but has also helped affiliated businesses prosper.

The increasing importance of the EHI in the Northeast relative to other agricultural sectors suggests this sector may offer new opportunities to strengthen the region's agricultural economy. First, because many growers ship their products out of the region, the industry provides a stimulus for increasing regional agricultural exports, injecting new monies into the regional economy. second, the industry's production practices foster opportunities to maintain a strong agricultural base in an everchanging economy. Specifically, nursery and greenhouse production generally requires less land than most agricultural activities-likely a desirable attribute in an increasingly urbanized region. Indeed, Heimlich and Barnard (1992) identified "adaptive farms" (defined by high values per acre, and including EHI producers) as an important component of the future of agriculture in the Northeast, noting adaptive farms are "likely to survive and increase because they can better compete economically with urban land uses" (p. 59).

Given the increasing importance of the sector, an improved understanding of the nature and extent of the EHI and its wider economic contribution is needed.2 For individual businesses, basic industry information provides a needed perspective in planning for growth and marketing. As an expanding presence in the agricultural economy, the industry can use this information to further its objectives with regard to market growth, competitiveness, and government assistance. Lacking clear information, political leaders, government agencies, educators, researchers, and the public may overlook or downplay the industry's importance and its contributions to the region's economic and social well-being.

While it is generally recognized that the U. …

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