Exploring Farm Business and Household Expenditure Patterns and Community
Linkages
D. M. Lambert1, P. Sullivan2, and T. Wojan2,
Selected Paper prepared for presentation at the American Agricultural Economics
Association Annual Meeting, Orlando, FL, July 27- July 29, 2008
1. Corresponding author, Department of Agricultural Economics, 2621 Morgan Circle,
302 Morgan Hall, Knoxville, TN 37996-4511, Phone: 865-974-7472, Fax: 865-974-
7383, E-mail: dmlambert@tennessee.edu.
2. Research economists, Economic Research Service/USDA
The views expressed in this manuscript do not necessarily represent the University of
Tennessee or the United States Department of Agriculture.
Abstract
Farm operators are an integral part of some rural economies. The businesses they
operate often hire seasonal and full-time employees and purchase goods and services
from local farm implement dealers, input suppliers, and financial institutions. Farm
household spending on food, furniture and appliances, trucks and automobiles, and a
range of consumer goods also support local jobs and retail businesses in some
communities. Based on the 2002 agricultural census and the 2004 Agricultural Resource
Management Survey, this paper explores the linkages between farm household/ business
expenditures and local communities.
Keywords: Farm business expenditures, farm household spending, employment,
community linkage
Introduction
A persistent claim of farm groups and many farmers is that government support of the
farm sector benefits rural economies through the forward and backward linkages farm
businesses have with input suppliers, commodity processors, and agricultural product
marketing. There are several reasons why farm policy may affect the economic wellbeing
of farming communities. First, farming is an important industry in many rural
communities, directly employing 1.9 million residents as primary operatives. Farm jobs
and related jobs in the