This News Letter article by Terrance Rephann, an economist with UVA's Cooper Center, summarizes the results of a comprehensive study he recently completed under contract for the Office of the Virginia Secretary of Agriculture and Forestry. The new study, which uses regional input-output analysis, shows that the economic impacts of agriculture and forestry are far larger than commodity sales alone. Agriculture and forestry are a highly visible part of Virginia's economic base. Nearly 21 million acres, or 82 percent, of the commonwealth's total land area is forest, crop land, or pasture and range. Additional land is forested parkland and public open space. In addition, Virginia's farms generated an estimated $2.7 billion in cash receipts, and forest landowners received nearly $350 million for harvested timber in 2006.
The agriculture and forestry industries have played a huge role in Virginia's economy throughout its history. Although direct farming and logging employment has declined and now makes up less than 2 percent of total Virginia employment, it would be a mistake to dismiss the industries' continued economic importance. The agriculture and forestry industries influence the location decisions of other industries in the value chain. In addition, state agribusinesses purchase from other industries and make payments to households. These expenditures circulate throughout the economy generating a large total impact, 10.3 percent of total state employment. By measuring the impact of the forestry and agriculture sectors in this fashion now and in the future, it will be possible to gauge how these sectors are evolving as levers in Virginia's economy.

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Terance J. Rephann