Leopold Center - Study shows potential economic payoffs tied to healthy eating

5-23-06

STUDY SHOWS POTENTIAL ECONOMIC PAYOFFS TIED TO HEALTHY EATING

AMES, Iowa – Answering the question, "Does five-a-day pay?" could mean a lot more to Iowans than eating five servings of fruit and vegetables every day. It could mean an additional $302 million in sales and more than 4,000 jobs added to the Iowa economy if just 25 percent of the extra fruit and vegetables are Iowa grown.

A new report from the Leopold Center for Sustainable Agriculture considers the economic impact if Iowans followed a diet of five servings of selected Iowa-grown fruit and vegetables each day for three months of the year. The report considered additional production of apples, carrots, spinach, squash and tomatoes, half marketed directly by Iowa producers and half sold through existing retail stores.

"This is an important question to consider because it ties healthy eating to the additional economic development that could occur if Iowa farmers provided some of the food for this change in diet," said Rich Pirog, who leads the Center's Marketing and Food Systems Initiative.

"Eating five servings of fruit and vegetables is recommended because of the potential health benefits, but if more of that produce is grown in Iowa, the state would reap considerable economic benefits, too," Pirog added.

Pirog said the report addresses four different scenarios, each hypothesizing an increase in the production of fruit and vegetables in Iowa. The "five-a-day" scenario would increase Iowa consumption of five produce items (apples, carrots, spinach, squash and tomatoes) to a total of five daily half-cup servings, with 100 percent of the crops coming from Iowa farms for three months of the year. He said the items were selected because they can be grown easily in all Iowa counties and potentially could be supplied for three months of the year. They also were chosen for their higher nutrient density relative to other choices.

The economic impact analysis was prepared by Dave Swenson, an associate scientist in the Iowa State University Department of Economics, and reviewed by Pirog and Angie Tagtow, registered dietitian for the Iowa Department of Public Health. The analysis was based on several assumptions:

According to the report, the "five-a-day" scenario would sustain (either directly or indirectly) $331.2 million in total economic output, $123.3 million in total labor income, and 4,484 total jobs in Iowa. Compared with existing production, its net impact would be $302.4 million in total new industrial output, $112.6 million in labor income, and 4,094 jobs.

The impact is high because a “five-a-day” scenario would mean that many Iowans would eat more fruit and vegetables than they do now. According to the Iowa Department of Public Health, only 19.5 percent of Iowans eat five or more servings of fruits and vegetables every day. The impact also is high because much of the produce eaten in Iowa comes from outside the state. Based on current estimates, only 25 to 50 percent of the apples, 12 percent of the squash, 10 percent of the tomatoes, 5 percent of the carrots and 1 percent of the spinach consumed on a fresh weight basis in Iowa is grown within the state.

Swenson said the model is based on a common economic concept of import substitution.

"By substituting in-state production for out-of-state purchases, money that otherwise would have left the state remains in the state," he said. "Keeping money in the state is desirable because money that leaves the state rarely returns. Money that remains in the state has a multiplier effect on the whole economy."

Swenson and Pirog said the scenarios generated in the report are hypothetical, and would require huge shifts in the infrastructure of Iowa’s fruit and vegetable industry, as well as gains in the Iowa market share taken from states such as California.

Pirog added: “Even though the scenarios are hypothetical, it is important to consider options that could be a win-win for Iowa’s farmers, the state's economy, and our overall health.”

The report, "The Economic Impacts of Increased Fruit and Vegetable Production and Consumption in Iowa: Phase II," is available on the Leopold Center web site at: www.leopold.iastate.edu/pubs/staff/files/health_0606.pdf.