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Contribution Of The North Dakota Agricultural Products Utilization Commission Programs To The State Economy

  • Hodur, Nancy M.
  • Leistritz, F. Larry
  • Hertsgaard, Tarrand

The North Dakota Agricultural Products Utilization Commission (APUC) has the mission of creating new wealth and jobs through the development of new and expanded uses for North Dakota agricultural products. The Commission administers four grant programs encompassing basic and applied research, farm diversification, marketing and utilization, and prototype development. The aim of this study was to evaluate the Commission's success in attaining its goals. The project team examined the outcomes of a sample of grant recipients from each program type to evaluate the overall effectiveness of the program in meeting its stated objectives. The time frame for the evaluation was 1995-2004. During the study period, a total of $9.3 million was awarded to 396 projects. Marketing and utilization grants accounted for 54 percent of awards and 70 percent of total funds awarded. The review of the four APUC grant programs indicates that each program appears to be quite successful in meeting its objectives. The farm diversification grantees who were contacted generally indicated that their projects had been implemented as planned, and most had plans to continue or expand their new enterprises. Prototype development by its very nature is a high risk venture, but of seven grant recipients contacted, two had commercialized their products, reporting annual gross revenues of $100,000 and $750,000, respectively. Two others reported that their products were nearing commercialization and were planning to begin marketing in 2007. Basic and applied research grants typically represent front-end efforts to develop and commercialize new products, crops, or value-added opportunities. Several of the basic and applied research grant recipients contacted were able to report very concrete outcomes with substantial economic impacts. Finally, the marketing and utilization grants program supports a diversity of projects directed at market analysis, feasibility studies, business plan development, and related services to support the launch and/or expansion of value-added enterprises. This program has supported the launch of a number of major processing ventures, as well as a number of smaller projects. The larger and more successful projects assisted by this program have made very substantial economic contributions. For example, nine agricultural processing projects supported by APUC during the 1995-2004 period are estimated (when fully operational) to contribute more than $157 million annually to the state economy, to support almost 2,300 new jobs, and to result in $2.4 million in added state sales and use and personal income tax revenues annually. In addition, APUC support has assisted the launch of a number of smaller enterprises which are important to the livelihood of the individual, may provide employment opportunities that would not otherwise exist, and may have potential for future growth.

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Paper provided by North Dakota State University, Department of Agribusiness and Applied Economics in its series Staff Papers with number 23653.

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Date of creation: 2006
Date of revision:
Handle: RePEc:ags:nddsps:23653
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