Total Contribution

The total economic contribution of the Aggregate Agriculture Sector includes three areas of weaArkansas money flow diagramlth and job generation.

  • Direct contributions are generated by farm production and processing of crops, poultry, livestock and forest products.
  • Indirect contributions result when agricultural firms purchase materials and services from other Arkansas businesses — a very important part of the economy in many communities.
  • Induced contributions result when employees of agricultural firms and their suppliers spend a portion of their income within Arkansas.

These contributions are reported in terms of Jobs, Labor Income and Value Added.

  • Jobs includes all wage and salary employees, as well as self-employed workers in a given sector.
  • Labor Income consists of two parts. First is proprietary income, which includes all income received by self-employed individuals. Second is wages, which includes all payments to workers including benefits.
  • Value Added includes Labor Income plus indirect taxes and other property-type income such as payments for rents, royalties and dividends. Value Added and Gross Domestic Product (GDP) are equivalent measures in theory but are estimated using different methods and data sources.

Government payments — payments made directly to some recipients in the farm sector — are included in the contribution analysis. Input providers (fertilizer, pesticide and equipment manufacturers) and retail locations (restaurants, grocery stores, lawn and garden centers, etc.) are considered part of the Aggregate Agriculture Sector, but some of the economic activity of these industries and other retail stores and input providers is picked up as indirect and induced effects and included in the total contribution.