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Exporting Processed Instead of Raw Agricultural Products

Author

Listed:
  • Schluter, Gerald
  • Edmondson, William

Abstract

Exporting processed agricultural products rather than raw commodities benefits society much more than just the increased value of the commodities themselves. Processing adds to the value of the products and generates greater business activity, more jobs, higher personal income, and greater tax revenues. The issue of adding value to exports becomes even more relevant in view of the recently expanded use of subsidies to spur growth of raw grain and oilseed exports. Do such subsidies fully exploit the U.S. agricultural competitive advantage? Processing wheat worth $1 million would generate as much as $9 million in business activity, 109 full-time jobs, $1.9 million in personal income, $160,000 in Federal personal income taxes, and $199,000 in Federal corporate income taxes. Processing other commodities could yield even greater economic benefits. Trade barriers, foreign demand, and domestic capacity could prevent full realization of the potential economic benefits.

Suggested Citation

  • Schluter, Gerald & Edmondson, William, 1989. "Exporting Processed Instead of Raw Agricultural Products," Staff Reports 278254, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278254
    DOI: 10.22004/ag.econ.278254
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    File URL: https://ageconsearch.umn.edu/record/278254/files/ers-report-427.pdf
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    Citations

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    Cited by:

    1. Celia Thomas & Emil Friberg, 1994. "To Market, to Market, with What? Some Observations on Labor Market Rationales for Industrial Policy," Journal of Economic Issues, Taylor & Francis Journals, vol. 28(2), pages 609-617, June.
    2. Lee, Jung-Hee & Henneberry, David & Pyles, David, 1991. "An Analysis Of Value-Added Agricultural Exports To Middle-Income Developing Countries: The Case Of Wheat And Beef Products," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 23(2), pages 1-14, December.
    3. William Edmondson & Matthew Shane & Agapi Somwaru, 2007. "Global Macroeconomic Shocks and U.S. Agriculture: An Interactive Matrix Approach," EcoMod2007 23900022, EcoMod.
    4. Fuller, Frank Harland, 1996. "The location of marginal production for value-added and intermediate goods: optimal policies and trade volumes," ISU General Staff Papers 1996010108000012147, Iowa State University, Department of Economics.
    5. Salvacruz, Joseph C., 1996. "Competitiveness Of The United States And The Asean In The International Agricultural Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 27(1), pages 1-9, February.
    6. Onianwa, Okwudili O., 1995. "The Potential For High-Value Agricultural Products Under The North American Free Trade Agreement: The Case Of Beef In Mexico And Canada," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(2), pages 1-9, December.
    7. Jansen, Hans G.P., 1994. "Improving Horticultural Export Performance of Developing Countries in Asia," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(01), pages 1-17, April.
    8. Schluter, Gerald & Edmondson, William, 1994. "USDA's Agricultural Trade Multipliers: A Primer," Agricultural Information Bulletins 309713, United States Department of Agriculture, Economic Research Service.

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