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Capital University News, California State University, Sacramento
October 6, 2003
Study shows impact of buying California goods
Shifts in spending
by California consumers could bear bountiful fruit for the state’s economy,
according to a new study by Dennis Tootelian, marketing professor and director
of the CSUS Center for Small Business.
The study, commissioned by the Buy California Marketing Agreement, found that
if in-state consumers bought more California-produced agricultural products
– such as tomatoes, lettuce, milk and other commodities from California’s
farms, ranches and fisheries – instead of products produced elsewhere,
the impact on the state’s economy would be significant.
“This shift does not necessitate an increase in total consumption or consumer
spending,” Tootelian said. “It merely represents a redirecting of
spending from purchasing agricultural products grown in other states and countries
to those grown in California.”
According to the study, if Californians increased their purchases of native-grown
products by 10 percent annually – which equates to about $1.63 per week
for the average resident – the result would be approximately 5,565 new
jobs and about $1.38 billion in additional spending due to increased business
activity. The added economic activity would also generate approximately $188
million in tax revenues for local and state governments.
An annual increase of 25 percent – about $4.12 per week for the average
Californian – would result in approximately 13,910 new jobs and about
$3.46 billion in additional spending, according to the study. The growth in
business activity would also generate approximately $470 million in local and
state tax revenues.
The commodities included in the study were fresh fruits and vegetables, dairy
products, nuts, chicken, salmon and lamb. These products represent about $18.5
billion (or 67 percent) of California’s $27.6 billion agriculture industry,
according to the study.
California is the nation’s leading producer of a wide range of products,
including broccoli, carrots, lettuce, melons, tomatoes and many other fruits
and vegetables. Milk and cream, grapes and nursery products are the state’s
three most valuable agricultural commodities, representing about 35 percent
of the state’s total agricultural production value. California also leads
the nation in agricultural exports to other countries.
According to the study, shifts in spending on agricultural goods would produce
such a dramatic economic impact primarily because the average California farm
spends 95.4 percent of its total revenues on operating and other costs. As a
result, about 95 cents of every farm dollar gets pumped back into the economy.
Even relatively minor shifts in purchasing patterns by in-state consumers in
favor of California grown products would have a major affect on the state’s
economy, Tootelian’s study concludes.
“The benefits come not only to farms,” Tootelian said, “but
also to other businesses due to the increased demand for their goods and services,
to people who will find new jobs, and to local and state government in additional
taxes generated by the increased economic activity.”
California State University, Sacramento Public Affairs
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