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Research to keep our communities strong

Economic Impacts of Tennessee’s Local Food Markets

Creating Economic Opportunities for Small and Medium Sized Farmers through Integration of Alfalfa as a Bioenergy Feedstock

Income Risk, Financial Constraints, and Diversification Strategies for Small Farm Households

Economic Impacts of Forestry and Forest Product Industries in Tennessee

Willingness to Pay for Wine’s Origin Appellation and Ecolabels

Assessing Agricultural Entrepreneurship in Relation to Small Farmers in Selected Tennessee Counties

Economic Impacts of Tennessee’s Local Food Markets
Dr. Enefiok Ekanem
Local food markets developed at varying rates depending on regional differences with substantial growth in the last few years. The southern region will large numbers of small producers, low incomes and rural characteristics make the study of local food systems important and significant. Direct-to-consumer sale of agricultural products is a small but fast-growing segment of U.S. agriculture. The Direct-to-consumer marketing of local foods is on the upswing. Data from the 2012 US Census of Agriculture shows that, on average, direct-to-consumer food sales accounted for 5.5% of all farm sales. Two types of local food market definitions used for this project include: (`1) markets where transactions are conducted directly between farmers and consumers (direct-to-consumer), and (2) markets where there are direct sales by farmers to restaurants, retail stores, and institutions such as government entities, hospitals, and schools (direct-to-retail/foodservice). Direct-to-consumer marketing of local foods include: farmers' markets, community supported agriculture (CSAs), farm stands/on-farm sales, and "pick your own" operations. The overall goal of this project is to analyze the impacts of local food markets on the demand, supply and quality of food in Tennessee. Specific objectives of this research are to: (1) Provide information on the development and growth of local food markets in Tennessee, (2) Assess the contribution of local food markets to the demand, supply and quality of food within the food supply chains in Tennessee, (3) Train and equip undergraduate and graduate students with skills in local food system research and, (4) use data and results from the research to draw implications and prescribe policies for rural development. Secondary and primary data will be used. Secondary data from existing publications and primary data from mail surveys, faceto- face interviews, and focus group meetings will be collected and analyzed to accomplish research objectives.

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Creating Economic Opportunities for Small and Medium Sized Farmers through Integration of Alfalfa as a Bioenergy Feedstock
Dr. Prabodh Illukpitiya
Small and medium-sized farmers have been facing various challenges over the years ranging from production to marketing their products hence need to explore new opportunities. Despite the potential for alfalfa as an important leguminous cover crop and by-products for animal feed, little research has been conducted in Tennessee and other Southern states on its potential for adaptability, its profitability and market feasibility. Increased adaptation of alfalfa in current production systems is an important factor in sustainable agriculture. Therefore, the proposed project seek to develop approaches, practices and technologies for the integration of Alfalfa for small and medium scaled production systems in order for farmers to capture benefits from the production of these crops for bioenergy market. The objectives of this project is to: a.) evaluate the alfalfa crop integrated systems in different regions b.) conduct economic analysis of alfalfa mono-cropping and integrated crop production under prevailing farming conditions in the region c.) evaluate socio-economic impacts of alfalfa production on rural farm communities. Despite the benefits associated with production of alfalfa, it is not widely produced in the region. This is in part due to limited research and extension work with this crop in the region. The information generated from this project will help university extension personnel to develop outreach approaches for small-scale and minority farmers to disseminate knowledge about alfalfa as a potential enterprise.

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Income Risk, Financial Constraints, and Diversification Strategies for Small Farm Households
Dr. Aditya Khanal
The number of farms in the United States have been declining even though the value of their crops and livestock production has increased over the last several decades. In 2012, out of 2.1 million farms, a large majority (around 90 percent) were small farms with gross annual sales of less than $350,000. However, fewer large farms produce the greater share of total agricultural products. Larger farms have competitive advantages over smaller farms in specialized commodity production, reflecting economies of scale in farming while small farms have tremendous challenges even to survive and continue their business (Hoppe, McDonald, and Korb, 2010) through traditional commodity production route. Since small farms may not compete with large farms in specialized commodity production, small farms need to diversify their production, income sources, and marketing strategies. In other words, small farms need alternative strategies for earning additional income besides farming and also need to adopt appropriate methods in production, technology adoption and marketing of products produced. Survival and continuation of small farm businesses is important for the prosperity of rural farming communities because these businesses are purchasers and suppliers of agricultural goods and services and important contributors to rural economies and US agriculture. The survival and continuation of small farms is even more important in Tennessee because Tennessee's agriculture is characterized by a vast majority of the small farms. Small farms need to find alternative enterprises to survive, remain viable, and continue their farm business by utilizing their resources in best possible way and by managing strategically. Therefore, the issues of income risk, financial stress, and different means of survival strategies for small farm households are important research agenda. However, the quantitative research and analysis about participation decision in diversification activities, factors influencing such decisions and analysis of the impact of the participation in diversification activities have been scant. This project will assess income risks and the role of diversification strategies among small farms in Tennessee and across the United States. Particularly, the research will address the role of household's economic decision making in diversification strategies on the farm and household incomes. The project will use both primary and secondary data and different set of econometric and statistical methods to analyze the problem and to achieve objectives. To analyse national-level scenario, information collected through Agricultural Resources Management Survey (ARMS) by United States Department of Agriculture (USDA) will be used. To investigate the problem specific to Tennessee, a primary data will be collected from randomly selected farmers in Tennessee and analyze characteristics and practices used by farm households. Standard econometric and statistical methods will be used to establish the relationship between variables and to estimate the model. Plotting the data, formal econometric tests, and the nature of dependent variable determine the appropriate econometric procedure and functional form to estimate the model. When the farmers have multiple strategies and choices to diversify, specialize, or undertake specific diversification decision, multinomial and multivariate models enable us to understand the economics of decision as it relates to economic, social, and demographic characters. This study will assess the status and characteristics of small farms, their survival strategies, practices used, and diversification decisions. It will also assess the impact of participation in diversification strategy or a combination of strategies on total farm income, gross sales, profitability and household income. The results of the study will help fill void in the knowledge gap by better understanding income risks and the role of diversification strategies on small farm business households. The outcome is expected to benefit farmers as well as researchers undertaking further research and development activities in rural areas.

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Economic Impacts of Forestry and Forest Product Industries in Tennessee
Dr. Aditya Khanal
Forest occupies around 766 million acres in the United States which is around 33 percent of the total land area (USDA, Forest Service, 2014). The United States is the world's largest producer of softwood and hardwood lumber and a leading producer and consumer of forest products accounting for around one fourth of the world's production and consumption. Forestry industry comprises a wide range of establishments including the production of lumber, pulpwood, solidwood, paper and non-timber forest products. Geographically, under broad classification of the US forest lands into three regions West, North, and South, the South region contains the highest 40 percent of the total timber land, and also referred as 'woodbasket' of the US (USDA Forest Service, 2014). Among 13 Southern states, Tennessee is one of the important states for hardwood forest and timber. Tennessee's forests cover 14 million acres (52 percent) of the state (TN Department of Agriculture, 2016), majority of which is occupied by hardwood species and timber. Tennessee is the home for around 200 sawmills producing around 800 million board feet of hardwood lumber and 15 million board feet of softwood. Forest and forest products are utilized for variety of products and purpose. Paper manufacturing, furniture, wood products manufacturing, fuel, firewood, biofuel and biomass, recreational purposes are some uses of forest and forest products to name a few. All these uses of the forest and forest products have different degrees of impact on local and state economies. Moreover, the sectors are interconnected mainly through input and output markets. These interconnected effects generate local and state level economic impacts on different sectors. A solid understanding of these economic impacts enables policy makers, forest businesses, and researchers to understand market interactions and response to and from the forestry sector. For example, with additional saw mills and paper mills in the area, it not only has direct effects on the economy through sales and employment but also the spillover effects on many sectors to different degrees. While these indirect effects are important to account for when computing impact, the studies often neglect such indirect effects. This study will document direct, indirect, and induced effects and overall regional economic impact of the forestry sector in Tennessee. The study will use Impact Analysis for Planning (IMPLAN) model and data for the most recent year. Each county and regional level estimations will be generated and aggregated to perform overall impact of the industry.

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Willingness to Pay for Wine’s Origin Appellation and Ecolabels
Dr. Kar Lim
Tennessee wine industry sprouts following the annihilation brought by the Prohibition in early 20th century. For the state that was once believed to be unsuitable for other agricultural uses but grape growing, its fledgling wine producers face competition from bigger and better established wineries. While the number of wineries in Tennessee has been steadily increasing to over fifty[1], the utilization of origin appellation in the form of American Viticultural Area (AVA) certification remains low. Tennessee's only AVA is shared with neighboring Mississippi. The Mississippi Delta AVA covers only a small portion of Tennessee wine (McCluney, 2015). AVAs might provide wine producers in the state with the competitive advantage. As the application of AVA widens, it rise the question: will the adoption of AVA could benefit Tennessean winery? This study investigate the effect of AVA on consumers' willingness to pay. This study uses an online choice experiment to elicit consumer preference of AVA label. In the choice experiment, consumers will be asked to choose from sets of given choice, the wine that reflects the most desirable attributes and price they wish. These data will be analyzed with ecometric methods, through this, consumers' willingness to pay for AVA will be estimated. The willingness to pay figures will be used to inform wine makers in Tennessee and other related agribussiness whether the adoption of AVA will increase their profit

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Assessing Agricultural Entrepreneurship in Relation to Small Farmers in Selected Tennessee Counties
Dr. Fisseha Tegegne
This study focuses on agricultural entrepreneurship in relation to small farmers. Agricultural entrepreneurship is receiving increased attention as a potential tool for economic revitalization of communities that have been adversely affected by changes in the agricultural sector and globalization. This is specially the case for small farmers. There is limited knowledge of small farmers' response to changing condition in agriculture and police measures to remedy the changes. Very little is understood in regards to this factors that drive entrepreneurship or diversification activities among small farmers. It should be noted that there is trade-off between off-farm work constraints and other potential sources of on-farm income. For example, change in tobacco subsidy policy has exacerbated the situation that necessitated seeking alternative enterprises. Entrepreneurship is "the process of uncovering or developing an opportunity to create value through innovation and seizing that opportunity without regard to either resources (human and capital) or the location of the entrepreneur--in a new or existing company" (Slaughter 1996:7). Based on the survey instruments intended for small farmers and small agricultural entreprenuers, this study uses appropriate qualitative and quantitative approaches to analyze data. Results will be presented, published, and disseminated to stakeholders.