Economic Multiplier

Economic multiplier is a powerful way to describe the ripple effects of a sector in the Canadian economy. Agriculture + food processing-distribution-retail-restaurants is a massive economic sector in Canada that often gets overlooked.

The most recent national census (2016) said agriculture contributed 0.6% to the GDP of BC. That does not sound very important. But, if you add in all the other jobs along the supply chain from farmer to consumer, you get a 3.4% contribution to BC GDP. That is an economic multiplier of 5X. This does not include all the restaurant jobs dependent on people eating out, as well.

The BC government has a data series going back several years called BC Agriculture-at-a-Glance. It outlines a similar economic multiplier effect except it provides details of the economic value of each section of the supply chain. It also provides the number of jobs involved.

Now if you take the economic multiplier effect of agri-food and add the organic component, you get a real engine of economic growth and development. This great under-used potential is clearly outlined in the ground-breaking study out of Kwantlen called SURREY’S UNDER-UTILIZED ALR LAND.

Urban farming using intensive horticultural practices offers a made in Canada solution to several terrible trends affecting our economy at every level. These trends are detailed elswhere on this eb site. Right now we are talking about how agri-food is an unrecognized powerhouse for economic development on an annual basis.

Each dollar youu pay directly to a farmer goes around to others at least 2 – 3 times. If the farm product is processed before going to the consumer, then it gets handed around over 5 times. that is what the economic multiplier looks like on the ground. Each time a dollar is passed from one person to the other, it is recorded as an economic transaction.

Modern organic local urban farming is a very technological and intensively managed way to produce food. Nutrient dense food in large amounts can be produced on small pieces of land usually not thought of as commercial farm size. We need to change how we look at things.

Recent numbers in the census point to changes in farm structure that supports the thesis that small urban farms selling directly to consumers have a larger economic multiplier then large chemical intensive farms focused on export markets.