Farmers Markets Contribute Millions to Local, Regional Economies
Market Umbrella releases economic impact study in advance of the 8th International Public Market Conference, September 21, 2012
New Orleans Market Umbrella, a 501(c)(3) nonprofit think tank and practitioner farmers market organization, this week releases its report The Economic Impact of Farmers Markets: A Study of 9 Markets in 3 Major U.S. Cities, authored by Richard McCarthy, executive director of Market Umbrella, and J. Robin Moon, a senior health policy advisor at the Office of the Mayor in New York City.
The study, funded by the Surdna Foundation, provides data on diverse U.S. markets, three each from Baltimore, Cleveland, and Los Angeles, and reveals that the markets each generate significant economic benefits for vendors, host neighborhoods, and the surrounding region. The study also highlights the capacity of farmers markets act to incubate small businesses, encourage entrepreneurship, and help move businesses from the informal to the formal economic sector.
(expressed as a range across all nine markets)
• Annual Economic Impact on Vendors: $52,000–$40,594,000 per market
• Annual Economic Impact on Nearby Businesses: $19,900–$15,765,700 per market
• Annual Economic Impact on the Community: $72,000–$56,360,000 per market
The study’s methodology, called SEED: the Sticky Economy Evaluation Device, was developed by Market Umbrella to capture what Executive Director Richard McCarthy describes as “an often surprising economic impact of the original business incubator, the farmers market.”
The numbers support this claim. From the tiny, fledging West Baltimore Farmers Market, a food security market that contributes $72,000 to its local economy, to the Hollywood Farmers Market, a flagship market that contributes a whopping $56,360,000 to its community, every market brings “sticky” dollars to its area—that is, dollars that are spent at the market and “stick” to the local economy, being re-spent locally rather than being siphoned away to distant parent companies or other stakeholders.
For example, the median market studied is Kamm’s Corners Farmers Market in Cleveland. The market attracts 50,387 visits from shoppers each year, which results in projected gross combined receipts of $1.8 million within the market. Further, approximately 44% of market shoppers spend money at nearby businesses when they visit the neighborhood, resulting in $778,270 in projected gross receipts at those businesses and, using the Bureau of Economic Statistics’ RIMS II multiplier, an annual total combined economic impact in the region of $3.4 million.
McCarthy describes how “the sight of tents and umbrellas gives the impression of an informal and therefore insignificant economic activity, whereas in fact it is highly efficient, enterprising, and democratic.” The USDA reported in December 2011, that there are 4,865 farmers markets operating in the USA — a 47% increase in just four years.
These findings are impressive indeed. Coupled with evidence of markets’ ability to incubate entrepreneurs and small businesses and to transition economic activity from the informal to the formal sector, the data make a strong case for markets as engines of economic growth and wealth creation.
The full report will be released as an E-book later this year. In the meantime, Economic Impact Reports for all nine markets are available at www.marketumbrella.org.
Downloadable Economic Impact Reports
SEED is a free, online measurement tool that has been used by over 200 markets throughout the US since it was released to the public in 2007.