Ralph Ruschell: Faulty assumptions in UK study of jobs in local agriculture

Ralph A. Ruschell is a Lexington Realtor and real estate developer.
Ralph A. Ruschell is a Lexington Realtor and real estate developer.

Twice recently, a January 2013 study, "The Influence of the Agricultural Cluster on the Fayette County Economy," by the University of Kentucky College of Agriculture has been referred to in the newspaper.

Both pieces used the UK ag study to influence readers to believe that one out of every nine jobs in Fayette County arises out of our agricultural economy.

First, that is not really what the UK ag study says. To reach such conclusions researchers defined the ag cluster beyond production agriculture, to include "agricultural inputs and food processing and manufacturing" as well as "service-based establishments (finance, veterinary, recreation), transportation, communications (and) ... wholesale and retail businesses that are 100 percent dedicated to agriculture. These businesses have never been included in an economic impact study exploring the impact of agriculture in Fayette County," the study says.

"When the Ag Cluster is defined to include business services and retail and wholesale trade solely dedicated to agriculture, in addition to the traditional way agriculture has been measured, it is estimated that a total of 16,676 jobs are attributed to this cluster.

"In addition, there are approximately 1,520 jobs associated with a proportion of the hospitality sector (25 percent lodging and 5 percent restaurants) in Lexington. In essence, given total employment in the county (147,000) these results suggests that roughly 1 out of 9 jobs is directly or indirectly associated with the Ag Cluster."

The researchers have dramatically broadened what most newspaper readers would understand as the agricultural economy to achieve their conclusions.

Second, if one refers to 2012 (most recent) data from the U.S. Department of Commerce's Bureau of Economic Analysis, one will see that there are only 2,547 farm jobs in Fayette County, out of total countywide employment of 223,052.

If Fayette County's agricultural employment was really one out of every nine jobs, then the total number of farm jobs should be more than 24,000.

So why does the UK ag study differ so greatly from the federal government's statistics? The UK study uses a series of hypotheses, assumptions and generous multipliers, rather than hard numbers, to arrive at its conclusions.

The UK study includes in its job count, among other dubious "agriculturally related employees," all of the employees at the Jiff Peanut Butter plant and the employees of the Coca-Cola Bottling plant, despite Fayette County farmers producing no peanuts, sugar or aspartame.

The study even includes as agriculture-related employees the UK College of Agriculture itself, although the study is not clear about whether that just means faculty and staff, or whether students are included too.

The UK ag study's methodology is at least highly questionable and, in my opinion, shameful. In reality, agricultural output, including the sale of Thoroughbred horses, makes up less than 5 percent of Fayette County's annual economic output.

If Fayette County's leaders are to base our economic future on the UK ag study, the citizens and decision makers should carefully review it.

Once the entire study (not just its executive summary) is carefully reviewed and analyzed, I believe that it will be found wanting and be discarded and no longer cited in Herald-Leader articles and editorials.

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