NE-162 Report -Minnesota

Platas Rosado, Diego Esteban ""Economic and Fiscal Impacts of Different Sizes of Swine Operations on Minnesota Counties" Ph.D. Thesis, Department of Applied Economics, University of Minnesota, August 2000

This project collected primary data on the local purchasing patterns of two different sizes and two types of pork producers. It also developed Minnesota specific production functions for these producers. Regional 1-0 models were developed for sixteen scenarios (4 counties, 2 sizes, for farrow-finish and finishing only). Regional purchase coefficients specific to each county were used. Fiscal impacts were estimated using the Minnesota Regional Integrated Modeling System (a COMP AS model developed by Inhyuck Ha).

This project incorporates several innovations not included in prior studies. First the input-output model using local production functions by type of operation and uses primary data to estimate RPCs. Second the COMP AS model corrects for problems in commuting in 1-0 and allows for estimation of the fiscal impacts.

Income and employment impacts are greater for small units if survivability is not considered. However, when the expected survival rate is considered over five years the larger units have greater impacts. Income per worker is greater for larger units both before and after considering survivability .When considering the impacts at the state level, nearly all of the purchases are internal, with the exception of construction supplies.

Lazarus, William F ., Diego E. Platas, and George Morse. "Evaluating Economic and Fiscal Impacts of an Evolving Swine Industry." CURA Reporter, Center for Urban and Regional Affairs, University of Minnesota, February 2001, pp. 16-22.

Popular version of the above. Greater attention is given to the finding that the RPCs are much higher for the state than the local economies. This suggests that local leaders might be more concerned about the shift to large producers since the impacts of small producers are more local. Yet state leaders would not worry much about size since all of the impacts are internalized. Theoretically, the state could rebate some of the benefits to the local area to dampen their tendency to worry about the loss of voters or local benefits. However when survivability is considered, there is less of a trade-off between local and state levels.

Swanson, Michael J., George W. Morse, and Knut Ingar Westeren. "Regional Purchase Coefficient Estimates from Value-Added Tax Data" The Journal of Regional Analysis and Policy, Vol. 29, No. 2, 1999

To develop regional non-survey, regional purchase coefficients (RPCs) are needed. Yet these are frequently the weakest link in the data. This project used value-added tax (VAT) in Norway to estimate the RPCs. The article argues that the V A T estimates provide a direct and verifiable estimate of the purchases within a region vs. those outside. After presenting estimates for the North Trondelag County in Norway, the article compares the results with location quotients and supply demand pool estimates. The results demonstrate that the traditional methods overestimate the RPCs and lead to large differences in impact analyses.

Carl V. Phillips, George W. Morse, Steffanie Guess-Murphy and Patrick Welle, Generic Environmental Impact Statement on Animal Agriculture: A Summary of the Literature Related to External Benefits and Costs. Minnesota Environmental Quality Board, Minnesota Planning, 2000

This literature review covers both externalities and regional economic impacts of animal agriculture. See http:/ /www .mnplan.state.mn.us/eqb/geis/index.htrnl