Food Policy 54 (2015) 78–84

Contents lists available at ScienceDirect

Food Policy
journal homepage: www.elsevier.com/locate/foodpol

The economic impact of farmers’ markets and a state level locally grown
campaign
David W. Hughes ⇑, Olga Isengildina-Massa
University of Tennessee, Department of Agricultural and Resource Economics, United States
University of Texas at Arlington, Department of Economics, United States

a r t i c l e i n f o a b s t r a c t

Article history: This study evaluates the direct and indirect economic impact of farmers market and the Certified South
Received 16 October 2014 Carolina Grown Campaign as transmitted through farmers markets on the South Carolina Economy. We
Received in revised form 2 March 2015 developed an IMPLAN-based SAM model of the South Carolina economy that takes into account the
Accepted 1 May 2015
opportunity cost of money spent at farmers’ markets to estimate the net as opposed to gross impact of
Available online 27 May 2015
the campaign on the state economy. Our results indicate that the Certified South Carolina Grown
Campaign (an example of a widely used ‘‘buy local foods’’ policies) does not make a major contribution
Keywords:
to the state economy. Our findings suggest that policy makers need to augment buy local campaigns with
Local food policy
Social account matrix
other efforts, such as a value-added processing of regionally produced foods, if such policies are to serve
Economic impact analysis as a means of generating economic growth.
Opportunity cost Ó 2015 Elsevier Ltd. All rights reserved.
Promotion campaign evaluation
Regional economic growth

Introduction
Regional promotion campaigns play an important role in agri-
cultural and food policy around the world (Kaiser et al., 2005). In
the European Union, such campaigns have been supported by the
1992 legislation of the European Commission [Regulation (EEC) N
2081/1992]. This legislation sought to enable producers to legally
protect their regional products based on either destination of ori-
gin or geographical indication with the goals of diversifying regio-
nal agricultural production, stimulating the economy of rural areas,
and enhancing regional farm incomes. Additional legislation in
2001 provided guidelines for state aid for promoting products that
are protected based on their destination of origin. Most recently,
legislation [EC Regulation 510/2006] replacing the1992 Act pro-
vided additional steps for using certification as a means of insuring
food safety, quality, and environmental preservation, as well as
authenticity and origin.
In the United States, regional promotion programs have also
seen substantial growth since the mid-1990s. A large portion of
this increase resulted from the Community Food Security Act (part
of the Nutrition Title of the Federal Agriculture Improvement and
⇑ Corresponding author at: Department of Agricultural and Resource Economics,
227B Morgan Hall, University of Tennessee, Knoxville, TN 37996, United States. Tel.:
+1 865 974 7463.
E-mail address: dhughe17@utk.edu (D.W. Hughes).
Reform Act of 1996, P.L. 104-127), which generated $22 million
of support for 166 local food system initiatives from 1996 to
2003 (Tauber and Fisher, 2002). The number of states conducting
such programs increased from 23 to 43 between 1995 and 2006
(Patterson, 2006) and by 2010 all 50 states had a program in place
(Onken and Bernard, 2010). Advocates see these advertising cam-
paigns as another way to retain consumer dollars and enhance
regional-(primarily state)-level economies, as well as support local
farmers. In fact, studies (Carpio and Isengildina-Massa, 2009)
demonstrate that one of the main reasons for buying locally grown
products is to support local economy. Therefore, much of these
efforts have centered on developing local food systems, including
direct marketing of agricultural products.
The growth in local food systems, including direct marketing by
farmers, is demonstrated by the increases in the value of agricul-
tural products sold directly to individuals for human consumption
from $404 million in 1992 to $1121 million in 2007 (US
Department of Agriculture, US Census of Agriculture, 2009). The
number of farms selling products directly to the consumer also
increased in the same period from 86,432 to 136,817. The number
of farmers’ markets, a major component of local foods systems, has
grown from 2410 in 1996, to 4385 in 2006, to 7864 in 2012 (US
Department of Agriculture, Agricultural Marketing Service, 2012).
Despite their popularity, the contributions of local food
campaigns are not well understood. Previous studies evaluating
regional promotion campaigns showed mixed evidence regarding

http://dx.doi.org/10.1016/j.foodpol.2015.05.001
0306-9192/Ó 2015 Elsevier Ltd. All rights reserved.
 D.W. Hughes, O. Isengildina-Massa / Food Policy 54 (2015) 78–84
campaign effectiveness (Carpio and Isengildina-Massa, 2009;
Nganje et al., 2011; Govindasamy et al., 2004; Patterson et al.,
1999). Furthermore, some studies that attempt to examine the
direct and indirect economic impacts of local foods in general
(Hodges et al., 2014) and local food campaigns in particular
(Govindasamy et al., 2004; Moore School of Business, 2010) have
markedly overestimated their impact. The challenge in correctly
assessing the economic impacts of regional promotion campaigns
lies in recognizing that most local food sales are not ‘‘new’’ sales
but rather a form of input substitution where purchases at the gro-
cery stores are replaced with farmers’ market purchases and
spending on (non-local) products made outside of the region is
substituted with spending made locally (Boys and Hughes, 2013).
In this regard, however, local food systems can have an opportu-
nity cost in terms of local spending that is foregone elsewhere. It
is important to set the record straight on the actual contribution
of regional promotion campaigns and to provide feedback to policy
makers that may influence future development of local food
systems.
In the efforts to further develop locally grown foods in the US,
we have also started to observe situations where locally grown
programs are starting to overlap or even compete. For example,
Hughes and Boys (2015) describe a situation in Page County,
Virginia where a local nonprofit based ‘‘Page County Grown’’
effort (Page County Grown, 2015), is combined with a regional
program (‘‘Shenandoah Valley Buy Fresh, Buy Local’’, 2015,
developed by the Virginia Cooperative Extension Service), and
additionally two state-level programs conducted by the Virginia
Department of Agriculture (a ‘‘Virginia Grown’’ campaign (2015)
for fresh products; and ‘‘Virginia’s Finest’’ for value-added
Virginia-produced food items, Virginia’s Finest Specialty Foods
and Beverages, 2015). At what point do we reach market satura-
tion between such efforts; and when do these geographically
overlapping efforts start to ‘‘cannibalize’’ each other’s customers
(Hughes and Boys, 2015)? A correct assessment of these pro-
grams has to take into account interactions between all relevant
efforts.
Our study contributes to a growing literature with regard to the
local food movement in which buy-local-food campaigns and
farmers’ markets form key components (Martinez et al., 2010;
Low and Vogel, 2011). The goal of this study was to evaluate the
direct and indirect economic impact of the farmers’ markets and
the Certified South Carolina Grown Campaign as transmitted
through farmers’ markets on the South Carolina economy; thus,
taking into account the interactions between the two. We applied
the method originally developed by Hughes et al. (2008), which
allows controlling for opportunity costs and assessing the net,
rather than the gross economic impact of a regional promotion
campaign on local economy. The analysis included development
of an IMPLAN-based (Minnesota IMPLAN Group, 2000) Social
Accounting Matrix (SAM) model to evaluate the impact of
farmers’ markets. Secondary data from the Agricultural Research
Management Survey (ARMS), South Carolina Census of
Agriculture, and the Bureau of Labor Statistics were used to cali-
brate the model to better reflect the characteristics of farms that
sell at farmers’ markets and their participation in the South
Carolina economy. The impact of farmers’ markets was evaluated
using an estimate of their total annual direct sales based on the
data obtained from the stratified surveys of farmers’ market man-
agers and vendors. Consumer surveys provided data for the oppor-
tunity cost analysis. Our findings assess the economic impact of the
Certified South Carolina Grown Campaign (net of opportunity
costs) as transmitted through farmers’ markets on the South
Carolina economy and provide feedback and policy recommenda-
tions regarding the contribution of such campaigns to the eco-
nomic growth.
79
Data and methods
The Certified South Carolina Grown campaign was launched on
May 22, 2007 and was financed by special appropriations from
the state legislature. Annual campaign expenditures averaged
$1.3 million during 2007–2011. Campaign activities included the
design and distribution of labels and signage for ‘‘Certified
South Carolina Grown’’ products; the advertisement of South
Carolina food products on television, radio, magazines, newspa-
pers and billboards; and the ‘‘Fresh on the Menu’’ component
focusing on advertising at local restaurants. Most of the campaign
expenditures (over 70 percent) were devoted to multimedia
advertising.
The primary data for this study were collected from three
surveys: two stratified surveys of farmers’ markets, where man-
agers and vendors were surveyed and a random survey of South
Carolina consumers. A population of 98 farmers’ markets in
South Carolina in 2011 was stratified based on the length of oper-
ation (1–3 years, 4–9 years, and 10 or more years); location in the
urban (population of 50,000 or more), less urban, and rural areas;
and location in the upstate, midlands, and low-country1 regions of
the state. Our stratified sample consisted of 48 farmers’ markets.
With 12 market managers responding and assisting in conducting
vendor surveys, a 25 percent response rate was deemed sufficient
for drawing inferences.
Survey results indicated that responding managers described
the size of their markets as averaging about 26 vendors and
about $61,000 in annual sales. Most markets (50 percent) oper-
ated once a week. Half of the managers indicated that the num-
ber of vendors that participated in their farmers’ market
increased by about 18 percent over the last three years. Most
farmers’ markets (75 percent) participated in the campaign by
displaying campaign logos on stands. Only 25 percent went as
far as applying logos on products. About half of the markets
included campaign logos in their marketing materials. Given
the fact that promotion materials were provided by the SC
Department of Agriculture free of charge, most managers (67
percent) indicated that there were no costs associated with par-
ticipation. Most responding managers (83 percent) indicated that
they were satisfied or very satisfied with the campaign.
Managers also indicated that the largest effect was increased
customer traffic for their farmers’ markets.
The results of the farmers’ market vendor surveys revealed
that 44 percent of vendors’ annual farm sales come from farm-
er’s markets. Among other marketing venues, these farmers
reported using restaurants and grocery stores. The average
increase in annual sales attributed to the effect of SC grown
campaign was 11.1 percent, which resulted from a 5.6 percent
increase in prices and a 9.8 percent increase in quantity of prod-
ucts sold. In response to the campaign, vendors reported a 6.3
percent increase in production. Vendors attributed an 8.9 per-
cent increase in their profits to the effects of the campaign.
Not surprisingly, most vendors (49 percent) were satisfied or
very satisfied with the campaign.
Consumer data were collected in the spring of 2011 via a mail
survey of 2000 South Carolina households randomly selected from
a list provided by a professional market research firm. The survey
generated a 10.2 percent response rate, but after deleting
1
Upstate: Abbeville, Anderson, Cherokee, Chester, Edgefield, Greenville, Green-
wood, Laurens, McCormick, Oconee, Pickens, Saluda, Spartanburg, Union, York.
Midlands: Aiken, Bamberg, Barnwell, Calhoun, Chesterfield, Darlington, Fairfield,
Kershaw, Lancaster, Lee, Lexington, Marlboro, Newberry, Orangeburg, Richland,
Sumter. Low Country: Allendale, Beaufort, Berkeley, Charleston, Clarendon, Colleton,
Dillon, Dorchester, Florence, Georgetown, Hampton, Horry, Jasper, Marion,
Williamsburg.
80 D.W. Hughes, O. Isengildina-Massa / Food Policy 54 (2015) 78–84
observations with missing values, only 165 observations were used
for the analysis.2 The average socio-demographic characteristics of
survey respondents demonstrate that our sample contained slightly
fewer female respondents (44 percent) than the state average of 51.3
percent. Survey respondents were also slightly older than the aver-
age South Carolina resident (40–44 years old), but sample household
size and income were very similar to state averages of 2.52 and
$58,368, respectively. Survey respondents visited farmers’ markets
on average seven times during the last 12 months. In a typical visit,
most consumers (89 percent) purchased produce, but they only
spent about $21 each visit on their produce purchases. More money
($40) was spent on nursery plants and flowers, and about 30 percent
of consumers report making such purchases. Our biggest interest in
consumer decisions was associated with determining the opportu-
nity cost of money spent on farmers’ markets in order to determine
the net rather than the gross impact of farmers’ market on the local
economy. Consumers indicated that if they had not spent the money
at the farmers’ market, most of the money 41 percent would have
been spent in the grocery stores, followed by non-food spending
(21 percent), savings (20 percent) and spending at the restaurants
(18 percent).
Economic model of South Carolina
The Social Accounting Matrix (SAM)3 applied in this study is
based on the analytical model outlined by Holland and Wyeth
(1993). We also follow the applied modeling approach used in
Hughes and Shields (2007) where ‘‘outside information’’ is used to
develop a more detailed and specific SAM (i.e., a model with an com-
plete household income level by industry payment matrix). The goal
was to properly construct a SAM that provides a picture of local
income distribution and how that distribution and the nature of local
jobs may change as sectoral economic activity changes in level and
composition.
Our model was based on the 2009 IMPLAN (IMpact analysis for
PLANning) modeling system (Minnesota IMPLAN Group Inc., 2000).
The first step in developing our SAM was to estimate the relation-
ship between industry and household income distribution using
data drawn from the 2009 American Community Survey Public
Use Microdata Series (PUMS) dataset (IPUMSUSA, 2011; Ruggles
et al., 2010; Alexander and Sobek, 2005). The PUMS dataset pro-
vides the advantage of linking earnings by individual household
members to industry. Also provided is total money income for that
household unit. Based on this information, a household money
income by industry dataset was formed.
We made numerous changes to the basic production portion of
the SAM to reflect the structure of the typical farmer who sells at
farmers’ markets. Our research and results conducted elsewhere
(Varner and Otto, 2008) indicates that small farmers tend to pre-
dominate in direct selling marketing in general and at farmers’
markets in particular. Using Agricultural Resource Management
Survey (ARMS) data for 2009 at the national level (Economic
Research Service, 2014), farms were divided into three categories
based on their size: small (less than $10,000 in sales); medium
($10,000 through $500,000 in sales); or large (greater than
2
It is important to note that decreasing response rates have been reported by a
number of recent studies (Pew Research Center, 2012). Moreover, several recent
empirical studies analyzing the links between low response rates and low survey
accuracy suggest a very weak or non-existent relation between the two (Keeter et al.,
2000; Curtis et al., 2000; Brick et al., 2003; Keeter et al., 2006; Holbrook et al. 2007;
Pew Research Center, 2012).
3
Input–output (I–O) models are the traditional vehicle used to examine the impact
of a particular economic sector on the rest of the economy. A Social Accounting Matrix
(SAM) provides a detailed picture of the economy but in a more complete fashion
than an I–O model by explicitly accounting for all market and nonmarket (such as
government welfare payments to households) income and resource flows.
500,000 in sales). Farms were also divided into livestock and crop
producers across the three size categories, resulting in six farm cat-
egories. The resulting set of production expenditures and net
returns more accurately reflected the production practices and,
hence, the in-state economic impact of South Carolina farmers
who sell at farmers’ markets.
We also divided the direct contribution of farms to the employ-
ment base for each of our six types of farms based on published
Census of Agriculture data for the state of South Carolina (2009).
Furthermore, since many agricultural jobs are part-time jobs
(especially those generated by small farms), employment was con-
verted to Full-Time-Equivalents (FTEs) for all sectors based on
Bureau of Labor Statistics (2011b) and South Carolina Census of
Agriculture (2009) data (for more details on SAM model construc-
tion, changes in agricultural production coefficients, and develop-
ment of FTEs see Isengildina-Massa et al., 2012).
Formulation of farmers’ market contribution to South Carolina
economy
To estimate the total (direct and indirect) impact of farmers’
markets on the South Carolina economy, it was first necessary to
estimate the level of direct sales at such venues. We derived these
estimates from our surveys of farmers’ market managers and farm-
ers’ market vendors. Using the market sales estimates from farm-
er’s market manager surveys, we estimated the distribution of
sales across six farm size categories to yield an estimate of total
sales of $7.321 million. Data generated from farmers’ market
vendor surveys allowed calculating total sales by multiplying the
number of active markets (98) times the median value of sales
per vendor ($4375) times the median number of vendor per
market to arrive at an estimate of $7.533 million in sales. The
robustness of the estimate is demonstrated by the small difference
in the two values derived from different data sources. We used the
vendor survey data to distribute total sales across the farm size and
type categories. Among the $7.321 million total value, sales were
concentrated in medium-size crop farms ($3.81 million or 51.6
percent), small crop farms ($1.852 million or 25.1 percent) and
medium-size livestock farms ($0.976 million or 13.2 percent).
Formulation of the certified South Carolina grown campaign impact on
South Carolina economy through farmers’ markets
According to the survey of farmers’ market vendors, the
Certified South Carolina Grown Campaign was responsible for an
11.1percent increase in direct sales ($0.739 million) and an 8.9per-
cent increase in profitability. First, we constructed our model to
account for this increase in profitability (increasing profit share
of input–output coefficient by the 8.9 percent with a concomitant
decrease in the value of all other coefficients). This model was used
in our estimate of the economic impact of farmers’ markets on the
South Carolina economy based on the $7.321 million in total
annual direct sales (i.e., the with the program impact scenario).
As a basis of comparison, we then calculated the economic impact
of farmers’ market sales without the $0.739 million due to the pro-
gram (i.e., $6.582 million in sales) or the increase in profits (i.e., our
without the program impact scenario). The difference between the
farmers’ market sales and profitability with the campaign versus
without provided our estimate of the direct and indirect contribu-
tion of the campaign to the South Carolina economy as transmitted
through farmers’ markets.
Results
The total gross impact (i.e., without accounting for the opportu-
nity cost) of farmers’ markets on the South Carolina economy is
 D.W. Hughes, O. Isengildina-Massa / Food Policy 54 (2015) 78–84 81

Table 1
Summary Results, Economic Impact Farmer’ Markets with and without the South Carolina Grown Campaign and Opportunity Cost Scenarios.

Scenario Total industry output Earned income Gross state product Full-time
(Million $) (Million $) (Million $) equivalent jobs
Gross economic impact farmers’ marketsa $13.410 $3.443 $5.047 361.4
Economic impact opportunity cost $7.206 $2.433 $4.030 104.4
Net economic impact farmers’ marketsb 6.204 1.010 1.017 257.1
Economic impact farmers’ markets, no campaignc $11.787 $3.098 $4.528 324.2
Gross economic impact of campaignd 1.623 0.354 0.519 37.1
Net economic impact of campaigne $0.751 $0.104 $0.104 26.4

Notes: For more detailed model results see Tables 2 and 3 or Isengildina-Massa et al., 2012.
a
Effect of the campaign included, no opportunity cost.
b
Effect of the campaign included, opportunity cost of resulting spending included.
c
Effect of the campaign excluded, no opportunity cost.
d
Marginal Effect of the campaign, no opportunity cost.
e
Marginal Effect of the campaign, opportunity cost of resulting spending included.

Table 2
Gross and net economic impact of South Carolina farmers’ markets.

Gross impact Net impact

Economic sector Gross state product Full-time equivalent jobs Gross state product Full-time
(Million $) (Million $) equivalent jobs
1 Agricultural Crop, Small Size Farms 0.431 213.4 0.378 187.2
2 Agricultural Crop, Medium Size Farm 1.153 72.9 1.015 64.1
3 Agricultural Crop, Largest Farms 0.106 0.9 0.089 0.8
11 Agricultural Livestock, Small Size Farms 0.059 23.9 0.047 19
12 Agricultural Livestock, Medium Size Farm 0.147 7.7 0.118 6.1
13 Agricultural Livestock, Largest Farms 0.029 0.2 0.022 0.2
15 Natural Resources 0.001 0 0.001 0
16 Wood and Furniture Products 0.007 0.1 0.002 0
19 Support Activities for Agriculture, Forestry 0.216 7.9 0.187 6.8
20 Mining 0.002 0 0.001 0
33 Utilities 0.199 0.5 0.106 0.3
34 Construction 0.017 0.4 0.007 0.2
42 Food and Feed Manufacturing 0.012 0.2 0.002 0
75 Textiles and Apparel 0.004 0.1 0.001 0
115 Petrochemical Manufacture 0.026 0.2 0.02 0.1
130 Fertilizer Manufacturing 0.004 0 0.004 0
305 Other Manufacturinga 0.030 0.2 0.008 0.1
319 42 Wholesale Trade 0.288 2.3 0.01 0.1
320 Other Retail trade 0.262 5 0.014 0.3
324 Retail Stores-Food and Beverage 0.043 0.8 0.629 11.8
332 Transportation, Warehousing 0.103 1.7 0.022 0.4
341 Information 0.06 0.4 0.012 0.1
354 Finance and Insurance 0.393 3.4 0.11 1
360 Rental Activities 0.732 4.2 0.18 1
367 Professional, Scientific, Technical Services 0.108 1.5 0.003 0
382 Administrative, Waste, Management Services 0.084 1.7 0.015 0.3
391 Educational Services 0.025 0.8 0.005 0.1
394 Social Services 0.114 1.8 0.018 0.3
395 Home Health Care Services 0.009 0.2 0.006 0.1
396 Medical Labs, Ambulatory Care Services 0.018 0.3 0.009 0.1
397 Private Hospitals 0.047 0.7 0.022 0.3
398 Nursing and Residential Care Facilities 0.027 0.7 0.001 0
402 Arts, Entertainment and Recreation 0.022 0.6 0.005 0.2
411 Accommodations 0.003 0 0.001 0
413 Food Services and Drinking Places 0.084 2.4 0.558 16.2
414 Other services 0.058 2.3 0.012 0.5
427 Government and Other 0.125 1.7 0.035 0.5
Total 5.047 361.4 1.017 257.1
a
Sum of results for eleven model sectors. For results of other variables see Isengildina-Massa et al.

summarized in the first row of Table 1.4 Gross impacts on industry
output totaling $13.410 million were concentrated in agriculture and
resource activities and trade, and transportation-based activities. In
terms of gross state product, impacts of $5.047 million were concen-
trated in agriculture (38.2 percent), trade and transport activities
4
For more detailed model results see Isengildina-Massa et al., 2012.
and financial activities (16.5 percent), as well as services including
agricultural services (11.3 percent) (as shown in Table 2). A total
impact of $3.443 million on labor income followed a similar pattern,
with 50.8 percent in agriculture, 8.4 percent in trade and transporta-
tion, and 24.9 percent in services including agricultural services. In
terms of employment, the total impact of 361.4 full-time equivalent
(FTE) jobs was also concentrated in agriculture (88.3 percent of the
total job impact) and services (6.3 percent) (Table 2). These values
82 D.W. Hughes, O. Isengildina-Massa / Food Policy 54 (2015) 78–84

Table 3
Gross, net economic impact of buy South Carolina campaign via in-state farmers’ markets.

Gross impacts Net impacts

Economic sector Gross state product Full-time Gross state product Full-time
(Million $) equivalent jobs (Million $) equivalent jobs
1 Agricultural Crop, Small Size Farms 0.044 21.9 0.037 19.2
2 Agricultural Crop, Medium Size Farm 0.119 7.5 0.099 6.6
3 Agricultural Crop, Largest Farms 0.011 0.1 0.009 0.1
11 Agricultural Livestock, Small Size Farms 0.006 2.5 0.003 2.0
12 Agricultural Livestock, Medium Size Farm 0.015 0.8 0.008 0.6
13 Agricultural Livestock, Largest Farms 0.003 0.0 0.001 0.0
15 Natural Resources 0.000 0.0 0.000 0.0
16 Wood and Furniture Products 0.001 0.0 0.000 0.0
19 Support Activities for Agriculture, Forestry 0.022 0.8 0.022 0.7
20 Mining 0.000 0.0 0.000 0.0
33 Utilities 0.020 0.1 0.003 0.0
34 Construction 0.002 0.0 0.001 0.0
42 Food and Feed Manufacturing 0.001 0.0 0.000 0.0
75 Textiles and Apparel 0.000 0.0 0.000 0.0
104 Pulp, Paper and Printing Products 0.000 0.0 0.000 0.0
115 Petrochemical Manufacture 0.003 0.0 0.001 0.0
130 Fertilizer Manufacturing 0.000 0.0 0.000 0.0
203 Farm Machinery, Allied Manufacture 0.001 0.0 0.000 0.0
233 Electronic Equipment Manufacture 0.000 0.0 0.000 0.0
276 Transportation Manufacture 0.000 0.0 0.000 0.0
305 Other Manufacturea 0.000 0.0 0.000 0.0
319 42 Wholesale Trade 0.030 0.2 0.001 0.0
320 Other Retail trade 0.027 0.5 0.001 0.0
324 Retail Stores-Food and Beverage 0.004 0.1 0.040 1.2
332 Transportation, Warehousing 0.011 0.2 0.002 0.0
341 Information 0.006 0.0 0.001 0.0
354 Finance and Insurance 0.040 0.4 0.005 0.1
360 Rental Activities 0.075 0.4 0.002 0.1
367 Professional, Scientific, Technical Services 0.011 0.2 0.000 0.0
382 Administrative, Waste, Management Services 0.009 0.2 0.001 0.0
391 Educational Services 0.003 0.1 0.000 0.0
394 Social Services 0.012 0.2 0.002 0.0
395 Home Health Care Services 0.001 0.0 0.001 0.0
396 Medical Labs, Ambulatory Care Services 0.002 0.0 0.001 0.0
397 Private Hospitals 0.005 0.1 0.002 0.0
398 Nursing and Residential Care Facilities 0.003 0.1 0.000 0.0
402 Arts, Entertainment and Recreation 0.002 0.1 0.000 0.0
411 Accommodations 0.000 0.0 0.000 0.0
413 Food Services and Drinking Places 0.009 0.3 0.040 1.7
414 Other services 0.006 0.2 0.001 0.0
427 Government and Other 0.013 0.2 0.003 0.0
Total 0.519 37.1 0.104 26.4
a
Sum of results for 14 model sectors. For results of other variables see Isengildina-Massa et al.

reflect the gross economic impact of farmers’ markets on the econ-
omy and do not take into account the opportunity cost of spending
at farmers’ markets.
The evaluation of the impact of the opportunity costs of spend-
ing at state farmers’ markets on other parts of the economy was
based on the primary data collected from consumer surveys. As
described in the data section, consumers indicated that if they
had not spent their money at the farmers’ market, most of the
money 41 percent would have been spent in the grocery stores,
followed by spending on non-food items (21 percent), savings
(20 percent) and spending at the restaurants (18 percent). For
the purposes of our analysis, savings would have had no current
economic impact and, hence, no opportunity cost. Grocery store
spending was margined into purchases at the farm level, wholesale
activity, grocery stores as retail markup, and appropriate trans-
portation sectors such as truck transportation. We then applied
regional purchase coefficients to each of these sectors to adjust
spending in South Carolina versus out-of-state spending (which,
of course, had no opportunity cost on the state economy). We also
distributed the non-food portion of spending based on spending
patterns for a typical household in the $75,000 through $100,000
personal income category (eliminating purchases on grocery and
restaurants as food items). Once again, we applied appropriate
regional purchase coefficients to each of the spending categories.
The result was an opportunity cost scenario across all sectors of
the South Carolina economy totaling $4.092 million in direct eco-
nomic impact (with the remaining 44.1 percent or $3.229 million
in leakage due to out-of-state spending). Summary of results from
the opportunity cost scenario impact are provided in the third row
of Table 1. The total impact of the opportunity cost of spending at
farmers’ markets in South Carolina was $7.206 million in gross
industry output, $2.433 million in earned income, $4.030 million
in gross state product, and 104.4 full-time equivalent jobs. This
spending impact was concentrated in Food Services and Drinking
Places with $0.642 million in gross state product impacts, and
Retail Stores-Food and Beverage with $0.415 million in earned
income impacts and medium-size crop farms (8.8 full-time equiv-
alent jobs).
We subtracted the results from the opportunity cost scenario
from the farmers’ market impact scenario to arrive at our estimate
of the net impact of farmers’ markets on the South Carolina econ-
omy. The resulting net impact of farmers’ markets in the state is
$6.204 million in gross industry output, $1.010 million in earned
income, $1.017 million in gross state product, and 257.1 full-time
 D.W. Hughes, O. Isengildina-Massa / Food Policy 54 (2015) 78–84
equivalent jobs (Table 1). As shown in Table 2, reduction in eco-
nomic impacts were concentrated in Food Services and Drinking
Places with a net job loss of 16.2 full-time equivalent jobs and a
decline of $0.558 million in gross state product and Retail
Stores-Food and Beverage with a net job loss of 11.8 full-time
equivalent jobs a decline of $0.629 million in gross state product.
Applying the same net scenario to the Certified South Carolina
Grown Campaign economic impacts, we determined that the net
impact of the campaign as transmitted through farmers’ markets
(i.e., including the opportunity cost of associated increased spend-
ing) was $0.751 million in gross industry output, $0.104 million in
earned income, $0.104 million in gross state product, and 26.4
full-time equivalent jobs (Table 1 and Table 3). As shown in
Table 3, small-size farms had the largest net gains in employment
(19.2 full-time equivalent jobs) and medium-size farms had the
largest net gain in terms of gross state product ($0.99 million).
Eleven of the 45 sectors in the model experienced slight declines
in employment and gross state product because of the program
with Retail Stores-Food and Beverage showing a net job loss of
1.2 full-time equivalent jobs.
Summary and discussion
The direct and indirect economic impact of the Certified South
Carolina Grown Campaign on the South Carolina economy due to
increased sales at farmers’ markets was examined in this study.
We developed an IMPLAN-based SAM model of the South
Carolina economy that takes into account the opportunity cost
of money spent at farmers’ markets to estimate the net as
opposed to gross impact of the farmers’ markets on the state
economy. This model was used in our estimate of the economic
impact of farmers’ markets on the South Carolina economy based
on the information about direct sales elicited from the surveys of
farmers’ market vendors and managers. To evaluate the impact of
the locally grown campaign, we removed the increase in prof-
itability due to the program and readjusted all coefficients in
our model. The difference between the farmers’ market sales
and profitability with the campaign versus without provided
our estimate of the direct and indirect contribution of the cam-
paign to the South Carolina economy as transmitted through
farmers’ markets.
The survey of the stratified sample of the farmer’s market ven-
dors revealed that the Certified South Carolina Grown campaign
was responsible for an 11.1 percent increase in sales and an 8.9
percent increase in profitability across state’s farmers’ markets in
2011. We estimated that the campaign had a gross direct and indi-
rect effect as transmitted through farmers markets’ of $1.623
million in gross industry output, $0.354 million in earned income,
$0.519 million in gross state product, and 37.1 full-time equivalent
jobs. These program-based impacts were concentrated in agricul-
ture and in agricultural services. After taking the opportunity cost
of spending into account, we determined that the net impact of the
campaign as transmitted through farmers’ markets amounted to
about 46 percent of the gross impact, namely $0.751 million in
gross industry output, $0.104 million in earned income, $0.104
million in gross state product, and 26.4 full-time equivalent jobs.5
While these results indicate that the program had a positive effect on
the South Carolina economy, it was much lower than the 10,000 jobs
and the $132 to one in state government benefit - cost reported else-
where (Charleston Regional Business Journal, 2010).
5
We also conducted a similar analysis of the impacts of the Campaign on
restaurant sales and found results of similar magnitude (see Isengildina-Massa et al.,
2012 for details). Our expectation is that the results would hold if we evaluated the
program across other marketing channels (such as grocery stores and roadside
stands).
83
Our findings shed light on the differences between the actual
and the touted contributions of a locally grown campaign on the
state economy. These findings are consistent with a growing body
of literature indicating that the contribution of local food systems
to regional economic growth is not large (Brown et al., 2014;
Swenson, 2011; Hughes et al., 2008; Otto and Varner, 2005;
Varner and Otto, 2008). Results from these studies imply that pol-
icy makers need to augment buy local campaigns with other
efforts, such as a value-added processing of regionally produced
foods, if such policies are to serve as major means of generating
economic growth. Based on regional economic theory, initiatives
that lead to more demand for value-added products or sales out-
side of a region should generate a larger economic impact because
of the lack of the opportunity cost in diverted local spending as
shown in our model results.
Our analysis also points to the needs for further research with
respect to regional agricultural branding programs in general, but
particularly with respect to economic impact analysis; could differ-
ence in target markets (especially local households versus local
institutional buyers) result in different levels of economic impacts
for regional economies? Are promotional campaigns oriented
toward local households less effective in generating economic
growth than efforts with the goal of increasing sales to large insti-
tutional buyers? As the number of programs grows with every
state and more than 75 sub- and inter-state areas having some
type of area agriculture branding programs (FoodRoutes, 2015),
the issue of coordination and interaction between various efforts
is becoming increasingly important. In particular, there is a need
for greater understanding of the interaction between programs in
terms of cross-geographical and cross-market effects with respect
to their ability to enhance demand in a particular target market
and with respect to their impacts on agriculture and the economy
in a given region.
Acknowledgements
Support for this research was provided by the Federal-State
Marketing Improvement Program, Agricultural Marketing
Service, U.S. Department of Agriculture through a Grant No.
12-25-G-0898. The sponsor played no role in study design, collec-
tion, analysis and interpretation of the data, in the writing of the
manuscript, and in the decision to submit the article.
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