Industry clusters
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Industry clusters. Planning Issues in Ag Lecture 3. Industry clusters continued…. A cluster is a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementary programs. Industry clusters continued….

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Industry clusters

Industry clusters

Planning Issues in Ag

Lecture 3


Industry clusters continued

Industry clusters continued…

A cluster is a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementary programs.


Industry clusters continued1

Industry clusters continued…

  • Dependent on each other (add value from raw products and then send to other places to attract money to area)

  • Attracts jobs/wealth and gives identity

  • Production to Processing to distribution

  • Business building with other businesses drives local economy

  • Adds value to production

  • Clusters will increase employment

  • Clusters are geographically concentrated and connected


California ag summary

California Ag Summary

  • San Joaquin Valley – 8 counties (most productive ag in state and nation)

  • Experiencing change in population (1970 growth accelerated)

  • -diverse cultural and ethnic populations increasing

  • -impact on major industry( production and economic)

  • Gross farm income in 2000 – $27-30 billion (what did we say this was today?)

  • California represented 13% of US Gross Farm Income


Since 1948 leading counties have changed 2002 census

Since 1948 leading counties have changed (2002 Census)

  • Not LA anymore

  • Fresno2.7 billion

  • Tulare2.3 billion

  • Kern2.0 billion

  • 6 counties in SJ are in top 10 (> $1 billion income) Kings and Madera are missing

  • Can you find the latest data on Ag Values from the CDFA or Farm Bureau Websites?


All private land in california

All private land in California

1/3 of state private land linked to Ag

  • 27 million acres in Agriculture in 2000

  • 1950 Ag land … 37 million

    Amount of acres declined in Ag…why?

  • Ag itself fewer farmers

  • Consolidation – farms have decreased, but size has increased


Farmland trust will not stop growth nor stop decline in land

Farmland Trust will not stop growth nor stop decline in land.

  • What kinds of choices do we need to make?

  • Which Ag land is more or less important?

  • Which types of development should be encouraged?

  • Questions debated throughout this course…


Agricultural land

Agricultural Land

  • 2/3 rangeland w/ pastures for cattle / other livestock

  • 1/3 cropland (9 million acres) 20% in SJ Valley

  • Different types of soil, water key to quality of land and…

    • Types of crops that are grown


Specialty crops commercially produced only in california 99 or more of total u s production

Specialty Crops Commercially Produced Only in California(99% or more of total U.S. production)*

  • Almonds

  • Artichokes

  • Clingstone Peaches

  • Dates

  • Figs

  • Kiwifruit

  • Nectarines

  • Olives

  • Persimmons

  • Pistachios

  • Plums, Dried (Prunes)

  • Raisins

  • Walnuts * Source:CDFA Resource Directory 2002


Ca productivity

CA productivity

Not all consumed in state or nation

  • Most exported (2000) $6.6 billion Ag product exported. What is this figure today?

  • CA export (#1 exporter in nation)

  • #6 significant Ag exporter in the world. Where do we rank today?

  • Has our import/export balance changed in Ca?


Crops in order of most exported 2003

Crops in order of most exported (2003)

  • Almonds (70% exported)

  • Cotton (So valley)

  • Wine

  • Table grapes

  • Oranges

  • Milk/cream

    2 countries import almonds

    #1 Canada

    #2 Japan


Ca 1 state in personal income

CA #1 state in personal income

  • 7 ½% of all jobs linked directly/indirectly to agriculture

  • 6 ½ % personal income (all income household)

    wages, profits, rent, interest

    Valley:

  • 30% jobs linked directly/indirectly to agriculture

  • 20% personal income related to agriculture


Jobs linked directly indirectly

Jobs Linked…directly:indirectly

  • Indirectly – clusters of related industry

  • Directly - Production of food & fiber

    • Creates/generates $$$

    • Economic activity…employment, income, sales, sales tax

    • Agricultural ripple effect can be good ( increased income for farmers, businesses etc)

    • Or it can be bad (reduced income, employment, businesses go under)

    • All are related to each other especially in the valley


Employment multipliers for the san joaquin valley 1996

Employment Multipliers for the San Joaquin Valley: 1996

IndustryEmployment multiplier

  • Agriculture1.50

  • Mining/construction1.99

  • Food Processing3.88

  • Other manufacturers2.44

  • Transportation/public utilities2.58

  • Wholesale trade1.77

  • Retail trade1.30

  • Fire2.03

  • Services1.58

  • Government1.37


Share of total of all industry output

Share of total of all industry output…

  • Focus on Ag

  • Valley 13%CA3%

  • Focus on Exports (leaving region)

  • Ag and food processing is the highest


Farm wage and salary employment growth in 1983 2000

Farm wage and salary employment growth in 1983 – 2000

Importance20001983

  • Valley higher17.5%20.%

  • Than CA2.7%3.4%

  • 1 out of 5 jobs in CA is Agriculturally related

  • Most people think that agriculture is considered open space instead of business.


Where does the information come from

Where does the information come from?

  • Every 5 years there is an ag census:

  • It measures: # of acres, change in # of farms, decrease in amount of land, decrease in # of farms, # of family farms


Structure of ag is changing 3 points

Structure of Ag is changing (3 points)

  • Population…fewer people involved in production agriculture, more people involved in services that provide for agriculture’s needs

  • Importance of Ag clusters…related businesses depending on each others’ prosperity

  • Changing structurally…less farms, larger farms…vertical integration…direct marketing


Factors in agriculture changing

Factors in Agriculture Changing

  • Technology - yields are higher, but not net yields ?

  • Vertical integration

  • Foreign competition

  • Regulatory costs

  • Consolidation may be the key, but family farms may suffer


Cause and effect

Cause and Effect…

  • In recession ( ¼ of farmers bankrupt)

  • Purpose of public policy is to pressure Ag or an individual


Industry clusters

  • Now…Consider the effects of Planning on individual property rights…

  • Next lecture…


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