April 28, 2010

Water Docket

U.S. Environmental Protection Agency

Mail code: 2822T

1200 Pennsylvania Avenue, N.W.

Washington, DC 20460



### Attention: Docket ID No. EPA

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‐ 0596

Re: Adoption of Numeric Nutrient Water Quality Standards for Florida

Dear Administrator Lisa Jackson:

Please accept the following written comments on behalf of Florida Farm Bureau Federation, the

state’s largest general

‐ interest agricultural association with over 140,000 member

‐ families.

Florida Farm Bureau Federation represents all agricultural commodity sectors in the State of

Florida, including but not limited to: apiculture, aquaculture, livestock production, citrus,

environmental horticulture, equine, forestry, peanuts, cotton, sod, sugar, fruits and vegetables.

Over the past decade, Floridians have spent over 20 million dollars evaluating water quality and

putting in place scientifically reviewed practices that are effective in improving the state’s

surface waters. Florida leads the nation in the amount of water quality data collected and

protections adopted to preserve or enhance the quality of our state’s waters. The agricultural

community has been a key player in the state’s evaluation process, encouraging the

development and implementation of Best Management Practices (BMP) which have made

positive impacts on Florida's water quality. Agricultural producers need clean water and

support a science

‐ based effort to further protect Florida’s waters.

Due to the fact that the State of Florida has been a leader in water quality restoration, this

unilateral regulation is unfairly targeting Florida for its efforts. Not only will Floridians be

responsible for cleaning up waters within the state, Floridians will also be responsible for

waters that flow into the state from our neighbors in Georgia and Alabama, who are not held to

the same stringent standards proposed for the State of Florida.

The Environmental Protection Agency (EPA) is moving forward based on a timeline that is

litigation

‐ driven, and fails to allow for the adequate research and thorough evaluation of critical

data. The EPA’s proposed numeric nutrient criteria are generalized and disregard the diversity

within the State of Florida.Water Docket, U.S. Environmental Protection Agency

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Florida Farm Bureau Federation has several concerns with the EPA’s proposed numeric nutrient

criteria for the State of Florida.

I. Florida’s Significant Efforts to Date to Preserve and Enhance the Quality of the State’s

Waters

In the proposed rule, the EPA has failed to recognize previous efforts in Florida to reduce

nutrient impairment through the successful implementation of the Impaired Waters Rule (62

‐

303, Florida Administrative Code), the Total Maximum Daily Load (TMDL) program, the BMP

program, and Basin Management Action Plans (BMAP).

a. Background Information on Florida’s Total Maximum Daily Load (TMDL) Program

and the role of Agriculture

Florida’s TMDL program began in 1999 with the Legislature’s passage of the Florida

Watershed Restoration Act. 1 Under Section 303(d) of the Federal Clean Water Act 2

(CWA) and Florida Statutes, TMDLs must be developed for all waters that are not

meeting their designated uses and are defined as “impaired waters.”

Florida’s TMDL program is site

‐ specific and transparent, allowing for stakeholder

participation. The TMDL process has been successful and continues to apply the

best available science. The pace at which the TMDL program has proceeded has

been criticized

– however, critics fail to recognize that it will take time to correct

what took years to create.

As part of the state’s TMDL program, the Florida Department of Agriculture and

Consumer Services (FDACS) may develop and adopt by rule interim measures

necessary to achieve the level of pollution reduction established by the Florida

Department of Environmental Protection (FDEP) for agricultural pollutant sources. 3

Where BMPs are adopted by rule, the FDEP shall verify, at representative sites, their

effectiveness in achieving TMDL pollutant reduction allocations. The FDEP shall use

best professional judgment in making the initial verification that BMPs are

reasonably expected to be effective, and shall notify the FDACS of initial verification

prior to the rule adoption, as applicable. The adopted measures may be

implemented by those responsible for agricultural pollutant sources, with the

assistance of the FDEP, the FDACS, and the state’s water management districts.

Implementation of rule

‐ adopted BMPs or other measures initially verified by the

FDEP to be effective, or verified to be effective by monitoring at representative sites,

1 Fla. Stat. Ch. 403.067 (2009)

2 Federal Water Pollution Control Act, 33 U.S.C. § 1313(d) (2002).

3 Fla. Stat. Ch. 403.067(7)(c) (2009)Water Docket, U.S. Environmental Protection Agency

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provides a presumption of compliance with state water quality standards for those

pollutants addressed by the practices. 4

b. Background Information on Florida’s Agricultural Best Management Practices

(BMP) Program

Florida’s agricultural BMP program has been a national leader. Agricultural BMPs

are practical, cost

‐ effective actions that agricultural producers can take to reduce

the amount of pesticides, fertilizer, animal waste, and other pollutants entering our

water resources. BMPs are designed to benefit water quality while maintaining or

even enhancing agricultural production. Implementing BMPs benefits both the

farmer and the environment, and demonstrates agriculture’s commitment to water

resource protection. 5

The FDACS, in conjunction with the University of Florida/Institute of Food and

Agricultural Sciences (UF/IFAS), develops BMPs with the involvement of

stakeholders and the approval of the FDEP. Florida law provides for farmers to

reduce their impacts to water quality through the voluntary implementation of

BMPs adopted by the FDACS. Agricultural BMPs are required by law in areas of the

state where the FDEP develops a BMAP that includes agriculture. Agricultural BMPs

are also required by law in the Lake Okeechobee Watershed. 6

Agricultural BMPs are implemented by proactive farmers who submit to the FDACS a

Notice of Intent (NOI) to implement specific BMPs contained in an FDACS BMP

Manual 7 or rule. In certain areas of the state, farmers develop site

‐ specific

conservation plans that contain the appropriate BMPs.

Several entities provide technical and educational assistance to farmers

implementing BMPs, including but not limited to: the FDACS Office of Agricultural

Water Policy, the UF/IFAS, the Water Management Districts, the Soil and Water

Conservation Districts, and the Resource Conservation and Development Councils.

Steps are being taken to develop a “Quality Assurance” program which will allow the

FDACS to follow up with farmers statewide and ensure that BMPs are being

implemented properly. In addition, the FDACS Office of Agricultural Water Policy,

the FDEP, the water management districts, and the UF/IFAS have been collecting

data to monitor the effectiveness of BMPs in protecting water quality.

4 Id.

5 http://www.floridaagwaterp olicy.com/AtaGlance.html

6 Id.

7 To view FDACS BMP Manuals, visit: http://www.floridaagwaterpolicy.co m/BestManagementPractices.html

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The FDACS Office of Agricultural Water Policy has spent approximately $55 million

on cost

‐ share for agricultural operations statewide since the Watershed Restoration

Act and Lake Okeechobee Protection Act programs began in 1999 and 2000

respectively. Following, is a chart that includes a breakdown of the total enrolled

acres. As of January 2010, over 1.9 million acres of agricultural land has been

enrolled in an agricultural BMP. It is estimated that approximately 1.4 million acres

of the total acreage is irrigated.

Total Acres Enrolled in the FDACS Office of Agricultural Water Policy

Best Management Practices, as of January 2010

Program/Manual Enrolled Acres

Container Nurseries 26,135.06

Forage Grass 8,709.98

Lake Okeechobee Protection Program 562,757.97

Leatherleaf Ferns 457.21

Statewide Cow/Calf 55,774.40

Statewide Dairy Program 4,574.01

Statewide Sod 14,130.60

Suwannee River Partnership (SRP) 20,907.18

Tri

‐ County Agricultural Area Interim Measure 3,754.14

Vegetable & Agronomic Crops 814,142.96

Citrus

– Gulf 90,896.01

Citrus

‐ Indian River 195,352.54

Citrus

‐ Peace River & Manasota Basins 60,751.42

Citrus

– Ridge 111,858.32

Grand Total 1,970,201.81

c. Background Information on Florida’s Basin Management Action Plans (BMAP) and

the role of Agriculture

Florida has also implemented BMAPs throughout the state. When a BMAP is

established, non

‐ point source agricultural dischargers included in a BMAP must

either implement appropriate BMPs established by the FDACS, or conduct water

quality monitoring prescribed by the FDEP or a water management district. 8 Failure

to implement BMPs or prescribed water quality monitoring may subject the non

‐

point source discharger to FDEP or water management district enforcement. 9

8 Fla. Stat. Ch. 404.067(7)(b) (2009).

9 Id.Water Docket, U.S. Environmental Protection Agency

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II. Water Quality Criteria Must Accurately Reflect the Latest Scientific Knowledge

The CWA, specifically Section 304(a), requires that the EPA establish standards that accurately

reflect the “latest scientific knowledge.” 10 In addition, the EPA’s regulations state, in part:

“... (a) Inclusion of pollutants: (1) States must adopt those water

quality criteria that protect the designated use. Such criteria

must be based on sound scientific rationale and must contain

sufficient parameters or constituents to protect the designated

use. For waters with multiple use designations, the criteria shall

support the most sensitive use.” 11

Beyond federal law and regulation, the EPA has developed and published well defined

guidelines 12 for developing water quality criteria and has abided by these guidelines since

publication. The EPA failed to follow several significant requirements established by these

guidelines during development of the proposed numeric nutrient criteria, including but not

limited to:

“...Criteria should attempt to provide a reasonable and adequate

amount of protection with only a small possibility of

considerable overprotection or underprotection

. It is not

enough that the criterion is the best estimate given the available

data. Criteria should be derived only if adequate appropriate

data are available to provide reasonable confidence that it is a

good estimate. ” 13

“...These National Guidelines should be modified whenever

sound scientific evidence indicates that a National Criterion

produced using these Guidelines would probably be

substantially overprotective or underprotective of the aquatic

organisms and their uses on a national basis.” 14

“...On the basis of all available pertinent laboratory and field

information, determine if the criterion is consistent with sound

scientific evidence

. If it is not, another criterion, either higher or

10 Federal Water Pollution Control Act, 33 U.S.C. § 1314 (2002).

11 40 C.F.R. § 131.11 (2005). (emphasis added)

12 Guidelines for Deriving Numerical National Water Quality Criteria for the Protection of Aquatic Organisms and

Their Uses

, USEPA 1985. (referred to as “Guidelines” from hereafter).

13 Id. at 5. (emphasis added)

14 Id. at 18. (emphasis added)Water Docket, U.S. Environmental Protection Agency

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lower, should be derived using appropriate modifications of

these Guidelines.” 15

The EPA’s proposed numeric nutrient criteria do not establish standards that accurately reflect

the latest scientific knowledge. In addition, the proposed numeric nutrient criteria do not

attempt to provide a reasonable and adequate amount of protection with only a small

possibility of considerable overprotection or underprotection.

a. The EPA’s Science Advisory Board

The EPA’s Science Advisory Board met September 9

‐ 11, 2009, to review the EPA's

draft guidance document, Empirical Approaches for Nutrient Criteria Derivation.

Following, are several concerns related to comments of the EPA’s Science Advisory

Board (SAB).

i. Ignoring the EPA Science Advisory Board Recommendations: The EPA’s SAB

reviewed the EPA’s proposed methods for numeric nutrient criteria derivation

and informed the EPA that the methods were flawed and were not scientifically

defensible. The proposed rule essentially ignores the SAB recommendations on

methods of developing scientifically defensible standards that will accurately

regulate nutrients when and where they cause unacceptable impacts. For

example, the SAB clearly informed the EPA that proper numeric nutrient criteria

development and application required consideration of habitat differences. The

EPA disregarded several habitat variables known to control whether/how

nutrients impact uses in lakes, streams or canals (depth, scour, light, substrate,

floating plants, detention time, etc.).

ii. No Cause

‐ and

‐ Effect Demonstration: The EPA also disregarded its own SAB and

published guidance which very clearly stated that water quality standards must

be based on a well documented “cause

‐ and

‐ effect” relationship. The EPA’s

proposal admits the canal and stream protection standards are not based on a

“cause

‐ and

‐ effect” demonstration; instead the 75 th percentile concentration

occurring in selected pristine waters was used to select the criteria values. This

approach improperly classifies 25% of pristine streams as nutrient impaired and

assumes nutrients are causing impairments in all other waters.

iii. No Impairment Threshold Identified: The EPA’s SAB informed the EPA that

nutrient standards must be set at the threshold above which impairment is

expected to occur. Several of the proposed standards are not based on any

documented biological impairment threshold. The range of conditions occurring

15 Id. at 57. (emphasis added)Water Docket, U.S. Environmental Protection Agency

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in non

‐ impaired waters does not demonstrate what the impairment threshold is.

The EPA’s analysis failed to show that higher levels of nutrients would impair

designated uses. The EPA continues to use “change point” analyses to select

criteria values, even after the SAB asserted that such an analyses does not

predict the biological impairment threshold.

III. Inadequate Implementing Provisions

A comprehensive implementation plan is as critical as proposed standards that accurately

reflect the latest scientific knowledge. The EPA has failed to recognize and properly provide for

means of implementing the proposed numeric nutrient criteria. On several occasions, the EPA

staff has stated that the FDEP would implement the finalized numeric nutrient criteria rule.

However, before the FDEP will be permitted to implement the federal rule, several steps must

be taken.

Under Florida law, it is well established that unless a state agency adopts a federal standard by

reference, the agency lacks authority to apply federal regulations. 16 It is unclear whether the

FDEP will ultimately attempt to adopt the federal standard by reference. If the FDEP elects to

adopt the proposed federal rule by reference, rule challenges will likely ensue under the Florida

Administrative Procedure Act. Therefore, it should not be assumed that the State of Florida will

participate in the implementation of the EPA’s proposed rule.

States may choose to accept a delegation of responsibility from the EPA to implement certain

parts of the CWA, most notably, the National Pollutant Discharge Elimination System (NPDES)

program. The FDEP has accepted delegation of the NPDES program, but has no legal obligation

to continue the implementation of that delegation. The EPA and Congress may provide

incentives for the state to adopt regulatory programs and to implement federal regulations.

However, the EPA's proposed rule does not change basic divisions of responsibility under the

United States Constitution. As noted by the United States Supreme Court in New York v.

United States 17 :

"States are not mere political subdivisions of the United States.

State governments are neither regional offices nor

administrative agencies of the Federal Government. The

positions occupied by state officials appear nowhere on the

Federal Government's most detailed organizational chart.

. . . Whatever the outer limits of that sovereignty may be, one thing

16 Fla. Stat. Ch. 403.8055 (2009)

17 New York v. United States, 505 U.S. 144, 188 (1992); see also Printz v. United States, 521 U.S. 898 (1997)Water Docket, U.S. Environmental Protection Agency

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is clear: The Federal Government may not compel the States to

enact or administer a federal regulatory program." 18

The EPA has acted on the erroneous legal presumption that the state will, or may, implement

the proposed numeric nutrient criteria.

IV. Inadequate Alternative Regulatory Approaches

The EPA attempted to fashion four relief mechanisms in the proposed rule, including:

designating uses, variances, site

‐ specific criteria, and compliance schedules. However, the

proposed relief mechanisms are ineffective or impractical under Florida law. In order for any

relief mechanisms to be undertaken, the state would have to go through rulemaking in

accordance with Florida’s Administrative Procedure Act. 19

a. Designating Uses

The EPA notes in the proposed rule that, “FDEP has recently restarted an effort to

refine the State’s current designated use classifications.” 20 However, the FDEP

proposed re

‐ classifications of designated use is an ongoing process that may result

in no change to the current designated uses. Therefore, designating uses is

currently an inadequate alternative regulatory approach.

b. Variances

According to Florida law, “no variance shall be granted from any provision or

requirement concerning discharges of waste into waters of the state or hazardous

waste management which would result in the provision or requirement being less

stringent than a comparable federal provision or requirement...” 21 Because a

variance would be less stringent than the EPA’s proposed numeric nutrient criteria, a

variance would be an inadequate alternative regulatory approach.

c. Site

‐ Specific Criteria

Currently, the state’s site specific alternative criteria (SSAC) rules are inadequate,

offering only a Type I SSAC or a Type II SSAC.

18 Id.

19 Fla. Stat. Ch. 120 (2009)

20 Water Quality Starts for the State of Florida’s Lakes and Flowing Waters, 75 Fed. Reg. 4217 (proposed January

26, 2010) (to be codified at 40 C.F.R. pt. 131).

21 Fla. Stat. Ch. 403.201(2) (2009)Water Docket, U.S. Environmental Protection Agency

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A Type I SSAC is useful only in limited circumstances where minimal man

‐ induced

impacts allow demonstration of comparability of a water body to a reference water

body suitable of providing an indication of natural conditions. 22 In addition, a Type II

SSAC is not authorized for nutrients. 23

The current state SSAC process is extremely expensive and time consuming. In the

State of Florida, SSAC have only been permitted in limited circumstances. In fact,

the FDEP recognized in their March 12, 2010, “Review of Proposed Criteria for the

Protection of Streams and Springs/Clear Streams,” that:

“Because expression of nutrients is dependent upon site

specific factors (hydrologic retention time, light

penetration, pH/alkalinity, grazers, habitat condition, etc.),

derivation of nutrient criteria requires additional flexibility

to assure that the criteria are indeed accurate for a

particular area. For this reason, DEP strongly supports

adoption of a streamlined, predictable process for

development of nutrient Site Specific Alternative Criteria

(SSAC). The SSAC process must be well defined (describing

sufficient water chemistry data, sufficient demonstration

of achieving designated use by passing biological indices,

etc.) so that the administrative burden on the petitioner,

DEP, and EPA is minimized.” 24

d. Compliance Schedules

Under Florida rule, the FDEP permits a reasonable schedule to comply with

standards. 25 However, the applicant must show in advance its ability to comply by

the end of the proposed schedule. 26 If the standards are technically impossible to

meet, the EPA’s proposed numeric nutrient criteria may result in a finding that

reasonable assurance of compliance with standards may not have been provided.

Therefore, as the EPA’s proposed rule is currently drafted, compliance schedules

would be an inadequate alternative regulatory approach.

22 Fla. Admin. Code r. 62

‐ 302.800(1) (2007)

23 Fla. Admin. Code r. 56

‐ 302.800(2)(d) (2007)

24 Florida Department of Environmental Protection, Division of Environmental Assessment and Restoration, Review

of Proposed Criteria for the Protection of Streams and Springs/Clear Streams, Proposed January 26, 2010 by the

Environmental Protection Agency

, March 12, 2010, 44

‐ 45. (review draft)

25 Fla. Admin. Code r. 62

‐ 620.620(6) (2008)

26 Id.Water Docket, U.S. Environmental Protection Agency

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V. Economic Considerations

a. The EPA’s Obligation under the Unfunded Mandates Reform Act, the Regulatory

Flexibility Act, and Executive Order 13132

The EPA has not properly recognized its obligations under the Unfunded Mandates

Reform Act, the Regulatory Flexibility Act, and Executive Order 13132. The EPA has

disregarded the mandates of the laws and the executive order, by mischaracterizing

the effect of the new standard and inaccurately stating the division of state and

federal responsibility in the implementation of the CWA.

The EPA asserts that, "under the CWA, EPA's promulgation of WQS establishes

standards that the State implements through the NPDES permit process. The State

has discretion in developing discharge limits, as needed to meet the standards...this

rule will not have a significant economic impact on a substantial number of small

entities.” 27 However, the EPA has prepared an inaccurate analysis of potential costs

associated with meeting the proposed standards. The EPA’s analysis uses the

numeric nutrient criteria proposed by the FDEP in July 2009 as the baseline. This is a

flawed baseline, as the FDEP’s July 2009 proposed numeric nutrient criteria was

nothing more than a proposal, and has not been implemented by the state

. The EPA

assumes that most of the costs will fall on non

‐ point sources and the categories of

point sources that would be primarily affected are municipal wastewater treatment

plants and industrial and general discharges. 28 A significant portion of the

agricultural industry is considered non

‐ point sources and will bear a substantial

portion of the costs if the proposed numeric nutrient criteria are implemented.

The EPA has taken an unusual position regarding its effort to comply with the

Unfunded Mandates Reform Act, premised on the following statement: "[t]he State

may use these resulting water quality criteria in implementing its water quality

control programs." 29 The statement implies this is merely a matter that the State of

Florida may, at its election and in its discretion, implement on a permit

‐ by

‐ permit

basis. From this premise, the EPA erroneously concludes that the proposed rule is

not a federal mandate.

Additionally, when referring to Executive Order 13132, the EPA asserts that "[t]his

action does not have federalism implications." 30 However, the EPA began this

27 Water Quality Starts for the State of Florida’s Lakes and Flowing Waters, 75 Fed. Reg. 4222 (proposed January

26, 2010) (to be codified at 40 C.F.R. pt. 131).

28 Id.

29 Id.

30 Id.Water Docket, U.S. Environmental Protection Agency

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rulemaking effort to settle third party litigation with several environmental advocacy

groups. At the time the third party suit was filed, the EPA had explicitly approved

the State of Florida's timeline and approach for the adoption of numeric nutrient

criteria. With no explanation, the EPA changed its position and elected to adopt

numeric nutrient criteria for the State of Florida as a federal mandate. It is well

established under the CWA that states have primary responsibility to adopt water

quality standards. The EPA usurped the state’s obligation for no rational purpose.

Based on the foregoing, the EPA's action has substantial federalism implications.

The EPA must act accordingly under Executive Order 13132.

b. Technological Limitations to the Agricultural Industry

More importantly, the EPA has failed to recognize the technological limitations of

reducing nitrogen and phosphorus in wastewater effluents, specifically for the

agricultural industry, the cost of implementing these technologies, and the adverse

environmental impacts, such as high energy inputs, caused by controlling nutrients

in effluents.

Adequate technology will take a significant amount of time and a substantial

amount of financial resources. Agricultural producers do not have the ability to pass

costs on to the consumer, and most technological alternatives will be cost

‐ prohibitive to farmers and ranchers in the State of Florida.

c. Economic Contribution of Florida’s Agricultural, Natural Resource, Food and

Kindred Product Manufacturing, Distribution and Service Industries in 2008

The state of Florida has nearly 24 million acres (36,000 square miles) in forests,

croplands, and ranches. 31 Florida agricultural and natural resources industries have

a significant economic impact on the state’s economy, accounting for approximately

8.4% of the Gross State Product and 13.7% of the state’s total employment. 32 In

2008, Florida’s agricultural and natural resources industries output or sales were

approximately $133.65 billion. Total foreign and domestic exports of goods and

services to customers outside of Florida were approximately $52.52 billion. As a

result of the indirect and induced multiplier effects arising from export sales, the

total output impacts were estimated at $162.70 billion. 33

31 Hodges, A.W., Rahmani, M., Economic Contributions of Florida’s Agricultural, Natural Resources, Food and

Kindred Product Manufacturing, Distribution and Service Industries in 2008

, University of Florida/IFAS, Food &

Resource Economics Department, February 4, 2010, 1. (To view the study in its entirety, refer to Attachment A).

32 Id. at 8.

33 Id. at 3.Water Docket, U.S. Environmental Protection Agency

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Direct employment in Florida’s agricultural and natural resources industry was 1.38

million fulltime and part

‐ time jobs. The total earned income impact of agricultural

and natural resources employee wages and benefits and business proprietor income

was $47.04 billion. The indirect business tax impacts paid to local, state and federal

governments were $9.28 billion. 34

It must be noted, that while the agricultural and natural resources industries

experienced considerable growth between 2001 and 2007, growth in the industry

mirrored the overall Florida and U.S. economy and significantly slowed during the

2007

‐ 2008 year. 35

d. Economic Impacts and Compliance Costs for Florida Agriculture of Proposed EPA

Numeric Nutrient Criteria

The economic impacts and compliance costs of implementing the EPA’s proposed

numeric nutrient criteria will be significant for Florida’s agricultural industry. The

FDACS, the UF/IFAS, and Florida agricultural engineer Del Bottcher, have prepared a

study which analyzes the economic impacts and compliance costs of the EPA’s

proposed rule. 36

The EPA’s analysis of estimated agricultural acreage, as well as methods used for

analysis was incomplete and inaccurate. The EPA estimated in the proposed rule

that 6.13 million acres of agricultural land will be directly affected by the

implementation of numeric nutrient criteria. However, based on water quality data

and modeling, a more accurate acreage of agricultural land directly impacted by the

implementation of numeric nutrient criteria would be 13.6 million acres. 37

Florida agricultural producers will most likely have to implement BMPs in addition to

on

‐ farm storm water treatment and retention practices, and still may not be able to

meet the EPA’s proposed numeric nutrient criteria. 38 The total initial costs for

implementing both typical BMPs and on

‐ farm storm water treatment and retention

practices for all agricultural sectors in Florida is estimated to be $3.069 billion. 39

34 Id.

35 Id. at 8.

36 Budell, R., Pride, T., Stone, H., Clements, J., Hodges, A.W., Stevens, T.J., Rahmani, M., Borisova, T., Bottcher, D.,

Economic Impacts and Compliance Costs for Florida Agriculture of Proposed EPA Numeric Nutrient Criteria

, Florida

Department of Agriculture and Consumer Services, Office of Agriculture Water Policy, University of Florida/IFAS,

Food & Resource Economics Department, and Soil and Water Engineering Technology, Inc., April 22, 2010. (To view

the study in its entirety, refer to Attachment B).

37 Id. at 7.

38 Id. at 1.

39 Id. at 4.Water Docket, U.S. Environmental Protection Agency

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Approximately 10 percent of agricultural land will need to be taken out of

production to construct the facilities, with a total annual revenue loss of $631

million. 40 This scenario would lead to a direct loss of 7,780 full

‐ time and part

‐ time

employment opportunities in the state’s agricultural industry. In addition, the state

economy would lose approximately 14,545 jobs. 41

Since the EPA’s proposed rule fails to provide for agricultural implementation, the

economic impact assessment presents a range of costs. 42 The estimated total initial

costs for Florida agriculture to implement all applicable practices will range from

$855 million (for implementing typical BMPs) to $3.065 billion (for combined costs

of implementing typical BMPs and additional on

‐ farm water treatment/retention). 43

The annual recurring costs will range between $271 million and $974 million. 44

Rather than the EPA’s suggested estimated annual costs of $34.9 million, the

agricultural and natural resources economic impact assessment asserts that a more

justifiable estimate of direct costs is from $902 million to $1.605 billion annually,

and indirect economic impacts to the state would reach $1.148 billion annually. 45

e. Florida’s Agricultural Industry will be Placed at a Competitive Disadvantage

As mentioned before, agriculture is not able to pass along increased costs to its

consumers. Therefore, Florida agriculture will be placed at a competitive

disadvantage with the rest of the country, where federal numeric nutrient criteria do

not exist. This could create food safety concerns, driving our food production from

being locally grown to overseas where the state’s residents will not have knowledge

of how their food is grown.

VI. The EPA’s Proposed Numeric Nutrient Criteria for the State of Florida’s Lakes and

Flowing Waters in General

The EPA’s proposed numeric nutrient criteria fails to consider the important role nutrients play

in achieving and maintaining the aquatic health and designated use of a water body.

In order to establish numeric nutrient criteria that are scientifically defensible, criteria need to

be established for response variables (e.g., excessive algal biomass, aesthetics and

40 Id. at 6

‐ 7.

41 Id. at 8.

42 Id. at 1.

43 Id. at 1, 5

‐ 6.

44 Id. at 1, 5

‐ 6.

45 Id. at 12.Water Docket, U.S. Environmental Protection Agency

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transparency) that are based on impairment of designated uses. 46 Nutrients alone do not

impair designated uses except for high nitrate concentrations in drinking water supplies and the

aquatic toxicity associated with ammonia. 47

Prior to the EPA’s proposed numeric nutrient criteria, regulation of nutrient loads was generally

made with site

‐ specific data analyses or mechanistic modeling. 48 The use of empirical or

mechanistic models that relate nutrient loading to response variable criteria should be used to

regulate nutrients. 49

Mechanistic site

‐ specific models for lakes, rivers, and estuaries are the most reliable and

scientifically defensible approach to regulating nutrients based on established nutrient

response criteria. The cost and time to collect site

‐ specific data and develop mechanistic

models are considerable in complex systems such as estuaries, however can be significantly less

than the cost of implementing nutrient reductions from both point and nonpoint sources.

Ultimately, scientifically defensible mechanistic models that truly relate nutrients to the

response variables that impact designated uses would provide the greatest benefits to the

environment and utilize limited funds in the most efficient manner. 50

a. Determining the Appropriateness of Proposed Criteria by Quantifying Uncertainty

The EPA has not sufficiently characterized important aspects of uncertainty in the

development of its proposed numeric nutrient criteria. As a consequence, the EPA’s

proposed criteria for flowing waters yield rates of error pertaining to designated use

attainment decisions so large that the utility of the criteria as a management tool for

preventing and mitigating impairments of designated uses is severely

compromised. 51

The EPA should have used a systematic approach, such as the one presented in its

own guidance documents and consistent with the EPA’s systematic planning

process, to estimate and address quantifiable uncertainties in its evaluation of

stressor

‐ response and reference percentile approaches for proposing numeric

46 Hydroqual, Hydroqual Comments on EPA’s Water Quality Standards for the State of Florida’s Lakes and Flowing

Waters (EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596)

, April 19, 2010, 6. (To view the technical report in its entirety, refer to comments

submitted by Florida Pulp and Paper Association Environmental Affairs, Inc.).

47 Id.

48 Id. at 1.

49 Id. at 6.

50 Id. at 8.

51 National Council for Air and Stream Improvement, Inc. (“NCASI”), Analysis and Comments on Environmental

Protection Agency Water Quality Standards for the State of Florida’s Flowing Waters; Proposed Rule

, April 25,

2010, 16. (To view the technical report in its entirety, refer to comments submitted by Florida Pulp and Paper

Association Environmental Affairs, Inc.).Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596

April 28, 2010

Page 15

nutrient criteria, especially for flowing waters. Without a systematic process,

several key determinations that support the proposed criteria appear to be

arbitrary, including but not limited to: (a) determining what level of uncertainty in

cause

‐ and

‐ effect evidence and strength of correlation is acceptable to support

“scientifically defensible” criteria; (b) determining what should be done when these

uncertainties are unacceptably high; (c) selecting an appropriate response variable,

especially for flowing waters; and (d) developing proposed modified alternative

criteria for lakes but not flowing waters. 52

If the EPA chooses to reconsider the proposed criteria, it should conduct an

uncertainty analysis to quantify expected performance of the criteria and inform

stakeholders of those expectations. 53

VII. The EPA’s Proposal for Florida’s Lakes

The EPA’s proposed numeric nutrient criteria for Florida’s lakes is based on a dose

‐ response

relationship between total nitrogen (TN) or total phosphorus (TP) and chlorophyll

‐ a

concentrations, using a 20 ug/L chlorophyll

‐ a threshold for colored and clear alkaline lakes, and

a 6 ug/L threshold for clear, acidic lakes. The chlorophyll

‐ a thresholds proposed to be applied

statewide, incorrectly assume that designated uses cannot be met and/or aquatic flora and

fauna will be adversely affected in all lakes when chlorophyll

‐ a is above 20 ug/L in colored lake

and 6 ug/L in clear, acidic lakes. The proposed approach will likely harm flora and fauna and/or

diminish current designated uses. In fact, studies have shown that total fish biomass per unit

area was positively and significantly correlated with nutrients and algal biomass. 54

According to research conducted by Florida LAKEWATCH, School of Forest Resources and

Conservation at the University of Florida (“Florida LAKEWATCH”), a large proportion of the lakes

that will be considered impaired under the EPA’s proposed rule are actually functioning

normally due to natural geological factors and not human pollution. 55 Research shows that the

EPA’s proposed numeric nutrient criteria will not be protective of all of the naturally

oligotrophic lakes in Florida. 56

The EPA’s proposed numeric nutrient criteria for lakes includes several assumptions: (1) any

productive Florida lake classified as eutrophic or hypereutrophic is that way because of human

52 Id.

53 Id.

54 Bachmann, R.W., Jones, B.L., Fox, D.D., Hoyer, M., Bull, L.A., and Canfield, D.E., Relations Between Trophic State

Indicators and Fish in Florida (U.S.A.) Lakes

, Canadian Journal of Fisheries and Aquatic Science, 1996.

55 Bachmann, R.W., Hoyer, M.V, and Canfield, D.E., Draft Alternative Nutrient Criteria for Florida Lakes

, Florida

LAKEWATCH, School of Forest Resources and Conservation, University of Florida, Gainesville, Florida, March 25,

2010, 1.

56 Id.Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596

April 28, 2010

Page 16

activities that can be controlled through regulation; and (2) eutrophic lakes are less “healthy”

than less productive lakes. However, Florida LAKEWATCH data shows that the current nutrient

levels of most lakes are determined by natural factors, such as geology, soils and hydrology. 57

If the EPA fails to recognize the existence of Florida’s naturally eutrophic lakes, resources will be

wasted in an attempt to regulate a natural phenomenon. 58

VIII. The EPA’s Proposal for Florida’s Rivers and Stream

Understanding and preventing stream impairments related to nuisance algae and excessive

aquatic plant growth is difficult due to the numerous variables that can contribute to this

condition and the interrelationships between them. A further complexity is the fact that

nitrogen and phosphorus (potential causal variables themselves) are required components of

healthy aquatic systems. Numerous studies have shown that the accumulation of algae and

other aquatic plants is governed by many stream characteristics including shade, bottom

substrate, water depth, water velocity, water clarity, nutrient concentrations, temperature, and

other characteristics. 59

a. Lack of a Cause

‐ and

‐ Effect Relationship and Use of Reference Approach

Contrary to conclusions made by the EPA and the FDEP, there is insufficient scientific

support for the TP and TN criteria proposed by the EPA for flowing waters. As a

result, the EPA and the FDEP have mischaracterized the value of the “relationships”

shown between selected nutrients and response variables. A regression which

demonstrates statistical significance does not, by itself, indicate a useful cause

‐ and

‐

effect relationship exists between two variables. Without predictable cause

‐ and

‐

effect relationships there is no evidence that nutrient reduction will result in

predictable environmental improvement. 60

The EPA has developed a technical guidance manual 61 for the development of

numeric nutrient criteria in streams which addresses three general approaches for

criteria setting: (1) identification of reference reaches for each stream class based on

best professional judgment or percentile selections of data plotted as frequency

distribution; (2) use of predictive relationships; and (3) application and/or

57 Id. at 3.

58 Id at 4.

59 National Council for Air and Stream Improvement, Inc. (“NCASI”), Analysis and Comments on Environmental

Protection Agency Water Quality Standards for the State of Florida’s Flowing Waters; Proposed Rule

, April 25,

2010, 6. (To view the technical report in its entirety, refer to comments submitted by Florida Pulp and Paper

Association Environmental Affairs, Inc.).

60 Id. at 36.

61 Nutrient Criteria Technical Guidance Manual

– Rivers and Streams

, USEPA 2000.Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596

April 28, 2010

Page 17

modification of established nutrient/algal thresholds. 62 Regardless of the approach,

the technical guidance manual clearly states that it is critical to establish a cause

‐

and

‐ effect relationship between nutrients and an adverse response. The technical

guidance manual states:

“When evaluating the relationships among nutrients and

algal response within stream systems, it is important to

first understand which nutrient is limiting. Once the

limiting nutrient is defined, critical nutrient concentrations

can be specified and nutrient and algal biomass

relationships can be examined to identify potential criteria

to avoid nuisance algal levels.” 63

Rather than adequately evaluate the cause

‐ and

‐ effect relationship between

nutrients and an adverse response, the EPA chose to use percentile distributions of

reference/benchmark water bodies as a basis for proposed TN and TP criteria. 64

Reference or benchmark streams are selected as representative of waters that are

not significantly impacted by anthropogenic sources of pollution. The EPA chose to

base criteria at the 75 th percentile of the distribution of reference/benchmark

streams. Application of a single criterion at the 75th percentile means that 25% of

benchmark streams are declared to be impaired. Additionally, the EPA has failed to

recognize or communicate that if additional criteria are derived using the proposed

approach, the number of reference water bodies declared that will be impaired will

increase. If the EPA were to continue the practice of setting criteria using a

percentile of stream conditions, in time, nearly all streams would be declared as

impaired for some parameter. 65

b. Use of Total Nitrogen (TN) and Total Phosphorus (TP) as Measures of and

Predictors for Stream Health and Potential for Impairment

The EPA’s reliance on TN and TP as the basis for numeric nutrient criteria in flowing

waters is flawed. The EPA’s own analysis suggests, and the National Council for Air

and Stream Improvement, Inc. (NCASI), analysis clearly shows, that TN and TP

concentrations in Florida’s flowing waters are not predictive of stream health or

62 Id. at 13.

63 Id.

64 National Council for Air and Stream Improvement, Inc. (“NCASI”), Analysis and Comments on Environmental

Protection Agency Water Quality Standards for the State of Florida’s Flowing Waters; Proposed Rule

, April 25,

2010, 58. (To view the technical report in its entirety, refer to comments submitted by Florida Pulp and Paper

Association Environmental Affairs, Inc.).

65 Id.Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596

April 28, 2010

Page 18

stream impairments attributable to excessive nutrients. 66 In fact, NCASI’s evaluation

indicates that numerous variables such as percent canopy cover, stream color,

turbidity, and other variables tend to have stronger associations with water quality

response variables than TN or TP. 67 There is little scientific support for establishing

TN and TP criteria in the range of concentrations being proposed. Future proposed

criteria for flowing waters should at a minimum incorporate the effects of stream

color and percent canopy cover. 68

If the goal of the EPA in the establishment of numeric nutrient criteria is to protect

flowing waters from impairments caused by excessive nutrients, the EPA should

focus its attention on nutrient forms that are bioavailable. A substantial body of

literature exists showing that (a) only bioavailable forms of nutrients contribute to

algal growth; (b) refractory forms of organic nitrogen and organic phosphorus often

comprise a large portion of the TN and TP in flowing waters and point source

discharges; and (c) the conversion of refractory forms of nitrogen and phosphorus to

bioavailable nitrogen and phosphorus occur at rates that are too low to contribute

to the impairment of flowing waters or downstream estuaries. The EPA’s own

analysis shows that inorganic forms of nitrogen and phosphorus have a higher

correlation to nutrient

‐ related water quality exceedences than do TN and TP. 69

IX. The EPA’s Proposal for Florida’s Canals

a. Sub

‐ Regions in South Florida are Not Considered

In the proposed rule, the EPA recognizes sub

‐ regions throughout the State of

Florida, denoting regional differences in physical and chemical conditions. The EPA

originally reviewed four South Florida sub

‐ regions in its technical analysis of water

quality conditions. 70 However, the EPA’s proposed numeric nutrient criteria rule

only denotes one sub

‐ region for South Florida.

The SAB published a draft report (January 8, 2010), noting that the Everglades

Agricultural Area (EAA), with its unique geological features, should be a distinct sub

‐

66 National Council for Air and Stream Improvement, Inc. (“NCASI”), Analysis and Comments on Environmental

Protection Agency Water Quality Standards for the State of Florida’s Flowing Waters; Proposed Rule

, April 25,

2010, 8. (To view the technical report in its entirety, refer to comments submitted by Florida Pulp and Paper

Association Environmental Affairs, Inc.).

67 Id at 36.

68 Id.

69 Id at 8..

70 Technical Supporting Document for USEPA’s Proposed Numeric Nutrient Criteria for Florida’s Inland Surface

Waters, Chapter 4 (EPA

‐ HQ

‐ OW

‐ 2009

‐ 0596

‐ 0003.4), January 26, 2010, 4

‐ 1 through 4

‐ 4.Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

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‐ 2009

‐ 0596

April 28, 2010

Page 19

region. The report additionally notes that other regions of distinction include the

Everglades, Rocky Glades, Marl Prairie, Coastal Plain and Riverine.

The South Florida Water Management District (SFWMD) has long considered sub

‐

regions throughout South Florida. These areas have unique and distinct soils,

subsurface water movement, aquifers as well as the depth of the aquifer below the

ground surface. For example, south of the latitudinal line of Lake Okeechobee there

are several distinct areas, including but not limited to: the Caloosahatchee

(phosphate deposits), EAA (muck soils with rock at various depths), Lower East Coast

(rock/marl soils and surficial high volume Biscayne aquifer), and Lower West

Coast/Big Cypress (sandy soils). 71

b. Nitrogen Level in the Everglades Agricultural Area’s (EAA) Muck Soil is Inherently

High

The criteria proposed by the EPA for South Florida canals (including the EAA) is 1.6

mg/L. As with any other highly organic soil, the soil in the EAA is naturally high in

nitrogen and meeting a standard of 1.6 mg/L will be unattainable and out of the

bounds of the historic levels for the sub

‐ region.

Soils in the EAA have nitrogen concentrations ranging from 2%

– 4% by weight. This

concentration equates to water levels of 4 parts per billion or higher on a regular

basis. 72 Much of this nitrogen is utilized by extensive cropping in the EAA, thus

reducing or eliminating the need to add additional nitrogen to grow crops.

In 1989, landowners in the EAA created the Environmental Protection District (EPD).

The EPD is a taxing body, with a mission to conduct scientific research on

environmental matters related to air, water, and land management practices. 73

Extensive research has been performed on highly regulating ground water levels to

decrease aerobic mineralization while at the same time growing crops. This water

table management is a common BMP throughout the EAA. In addition, five distinct

Water Control Districts 74 fine

‐ tune water tables on farm fields on a daily basis. 75

71 South Florida Environmental Report, Volume 1, South Florida Water Management District, August 5, 2009, 1

‐ 2

(draft)

72 Gilbert, R.A., and Rice, R.W., Nutrient Requirements for Sugarcane Production on Florida Muck Soils

, University of

Florida/IFAS, 1998.

73 http://eaaepd.org/

. Everglades Agricultural Area Environmental Protection District Website.

74 Fla. Stat. Ch. 298 (2009).

75 Personal communication with David Davis, Administrator, South Florida Conservancy District, (2009)Water Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

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‐ 0596

April 28, 2010

Page 20

c. Canals versus Streams

The decision by the EPA to classify all canals located north of Lake Okeechobee as

streams and all canals south of Lake Okeechobee as canals, is arbitrary and

capricious. This decision leads to speculation that the EPA is unfamiliar with the

characteristics and biota of water bodies in South Florida.

Most South Florida canals were dug by the Federal government for one purpose, to

move water off of the land and out to sea. 76 When the canals were dug, no thought

was given to creating physical characteristics such as varying bottom depth or

oxbows to encourage natural flora and fauna to populate the canals. A majority of

the canals were dug as a box shaped structure with straight runs. Therefore, the

resultant flow characteristics are either very quick, carrying much sediment or

stagnant with no flow at all. Neither resultant flow characteristic promotes healthy

conditions for aquatic life. Additionally, designating canals as a Class III water body

does not meet the characteristics of their inherent structure.

The same biological expectation for streams should not be applied to canals. Canals

move water quickly with little interaction with the surrounding landscape. Streams,

in contrast, have a high level of interaction with the surrounding landscape. This is

especially true in Florida where streams move much slower than other areas of the

United States, due to topography. Oxbows and stream channeling cause a constant

mixing in the water profile. Some areas have very light mixing with little water

movement while other areas mix with much greater intensity. This variation creates

unique environments (riparian zones) for the growth of varied emergent and

submergent plant life. The numerous species of plant life promote healthy and

diverse aquatic life. The high interaction with the surrounding landscape

encourages land animals to interact in greater volume. None of this variation can be

found in a canal and biological expectations should not be similar to streams.

76 http://www.evergladesplan.org/a bout/restudy_csf_devel.aspx

. Comprehensive Everglades Restoration Plan

(CERP) websiteWater Docket, U.S. Environmental Protection Agency

Docket ID No. EPA

‐ HQ

‐ OW

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‐ 0596

April 28, 2010

Page 21

X. Conclusion

The EPA’s proposed numeric nutrient criteria will broadly classify waters throughout the State

of Florida as impaired, force communities and agricultural operations to reduce nutrients

regardless of demonstrated need, and unnecessarily exhaust the state’s critical economic

resources. Predicting that nutrients are causing problems, even in areas classified by the state

as pristine, demonstrates that the proposed rule bears no reasonable relationship to actual

environmental needs. The EPA’s proposed numeric nutrient criteria, in many instances, will

produce a net environmental detriment by wasting energy and severely impacting local

economies.

Florida Farm Bureau Federation requests that the EPA seriously consider withdrawal of the

proposed numeric nutrient criteria rule and allow the FDEP to develop scientifically defensible

criteria.

In the alternative, Florida Farm Bureau Federation asks that the EPA consider the following:

• Correct technical deficiencies within the proposed rule,

• Provide clear and concise implementing provisions,

• Provide viable alternative regulatory approaches, and

• Recognize the state’s existing TMDLs as SSAC.

Sincerely,

John L. Hoblick

President

Florida Farm Bureau Federation

# Attachment A1



## Economic Contribution s of Florida ’s Agricultur al

, Natural Resource,

Food and Kindred Product Manufacturing , Distribution and Service

Industries i n 200 8

By Ala n W. Hodges and Mohammad Rahmani

U niversity of F lorida

/IFAS, Food & Resource Economics Department

PO Box 110240, Gainesville, FL 32611

- 0240

First a uthor contact: Tel 352

- 392

- 1881 x312; email: awhodges@ufl.edu

February 4 , 2010



### Introduction

The state of Florida has nearly 24 million acres (36,000 square miles) in forests, crop lands , and ranches

,

or about two

- thirds of its total land area. T he agricultural and natural resource industries produce food

, fiber and

mineral commodities , and are linked to a broad range of other economic sectors for food and kindred product

manufacturing , wholesale and retail distribution, input suppl i es, support services and nature

- based recreation

. In

addition to farm ing , for est ry

, fisheries and mining , this includes other diverse activities such as fertilizer

manufacturing, sawmills, fruit and vegetable processing, landscaping, wholesale food distributors , retail food

stores, restaurants and other food service establishments, retail garden centers

, pest control, golf courses and

re creational fishing , for example

.

This report provides estimates of these industry’s economic contribution s to Florida in 200 8 , up dating a

previous study for 200 7 (Hodges and Rahmani

, 200 9 )

.



### Methods

Data for this analysis were obtained from the IMPLAN Professional database for Florida counties for

2001

- 0 8 (Minnesota IMPLAN Group) and other special studies conducted by the authors

. The se data were

derived from the National Income and Product Accounts for the United States ( U.S. Department of Comme rce).

Over 9 0 individual industry sectors in Florida were identified as related to agriculture and natural resource

commodity production, input suppl y and supporting services

, food and kindred product manufacturing,

distribution, and nature

- based recreatio n. A list of industry groups and individual sectors included in the analysis

is shown in Table 1

. Note that some industry sectors in this analysis were reclassified from their original

designation under the North American Industry Classification System (NAICS) to include as part of the broadly

defined agriculture and related industries. Economic contri butions were also evaluated for several recognizable

industry commodity groups that have linkages between production and processing/manufacturing sector s

,

including environmental horticulture (nursery and greenhouse production, landscape services , retail l awn and

garden centers ) ; fruit and vegetable farm ing and processing; forestry , logging and forest product manufacturing ;

sugarcane and refined sugar manufacturing; livestock an d animal products manufacturing; fishing and seafood

products.2

The total region al economic impacts for each sector were estimated using models developed with the

IMPLAN Pro

fessional software for social accounting and impact analysis (MIG, Inc.)

. This system enables

construction of input

- output models and social accounting matrices that represent the structure of a regional

economy in terms of transactions among industry sect ors, households and governments. The IMPLAN model

account s for industrial commodity production, employment, labor and property income, household and

institutiona l consumption, domestic and international trade (imports, exports)

, taxes paid to local, state and federal

governments, transfer payments such as welfare and retirement, and capital investment, among other factors.

Economic m

ultipliers derived for each ind ustry capture the secondary effects of new money to th e region that

generate s further economic activity as it is re

- spent in the local economy (Miller and Blair , 2009 ) . Indirect effects

multipliers represent the economic activity generated in the supply ch ain by p urchase of intermediate inputs from

vendor firms , while induced effects multipliers represent the impacts of spending by industry employee

household s and by local, state or federal governments

. The indirect and induced multipliers were applied only to

foreign and domestic exports, or sales outside the state of Florida. T he total economic impacts are calculated as

the sum of direct effects of industry sales or employment, plus the indirect and ind uced effects. Although the

estimates of this analysis are referred to as “economic impacts”, these values may be better understood as

“economic contributions” because they represent ongoing economic activity of existing industries rather than a

net change in activity resulting from external influences (Watson et al , 2007).

Measure s of economic impacts reported here include output or revenue, value added , employment

( including fulltime

, par t

- time and seasonal positions), labor income, property income, and in direct business taxes

paid to local/state and federal governments. Value added is a broad measure of economic activity that is

comparable to the Gross Domestic Product, and represents the net income created by an industry, comprised of

labor and property i ncome, indirect business taxes and capital consumption . Value added is also equivalent to the

difference between industry revenues and intermediate input s purchase d from other sectors

. A glossary of

economic impact analysis terminology is provided in Appen dix A.

Regional economic models were developed for the state of Florida and for all 67 counties in the state. The

regional models were constructed with the newly released version three of the I MPLAN Pro software and Florida

state/county data package for 2008 (MIG, Inc). All model parameters were kept at default settings, with

econometrically estimated regional purchase coefficients (RPCs) representing the share of commodities purchased

from local sources. Social /institutional accounts for households, state/local and federal governments, and capital

investment were incorporated endogenously within the model

.

Summary information was developed for the state, all counties, and for nine regions (shown in Figure 8).

These functional economic regions each re present a core urban area, surrounded by closely linked

nonmetropolitan counties. The regions were defined by the U.S. Commerce Department, Bureau of Economic

Analysis (USDOC/BEA) based on metropolitan areas, employee commuting patterns and other economic data

from the 2000 Census (Johnson and Kort, 2004). It should be n ote d that some Georgia counties included in the

north Florida regions were not evaluated in this analysis . D ue to differences in trade flows and accounting

adjustments at the state and county level, slight discrepancies in regional results were reconciled by forcing

county and regional estimates to match with state totals

.3

Values for some activities that we re not specifically identified in the IMPLAN model were estimat ed as a

share of their parent sector based on previous studies and other economic data: landscape services and pest control

services were 49 % and 15 % , respectively, of services to buildings (sector 388); w holesale food distribution was

20 % of wholesale tra de (sector 319) ; retail garden centers were 19% of building materials and garden stores

(sector 323) ; golf courses and recreational fishing were 48 % and 10% , respectively, of am usement and recreation

services (sector 410)

.

V alues for 2001 through 200 8 were expressed in 2008 dollars using the mid

- year (July) indices for the

Gross Domestic Product (GDP) Implicit Price Deflator (U.S. Dept. of Commerce) , which is a broad measure that

accounts for effects of price changes in the measurement of GDP

. IMPLAN d ata were not available for 2005.

Note that r esults for prior years were revised in light of new information, so finding s presented here do not

necessarily match those previously reported for 2001

- 200 7 (Hodges and Rahmani

, 200 9 )

.



### Results

Economic Contribution s by Industry Groups and Sectors

E conomic contributions by major industry groups and specific ind ustry sectors in Florida in 200 8 are

shown in Table 1 and summarized in Figures 1

- 4

. The industries are categorized in s even major groups: Crop,

Livestock, Forestry and Fisheries Production ; Mining ; Agricultural Inputs and Services ; Food & Kindred

Products Manufacturing ; Forest Products Manufacturing; Food & Kindred Products Distribution ; Nature

- based

Recreation. Results are reported below for eac h major group, for all groups combined, and for all groups

exc luding Food & Kindr ed Products Distribution

.

Total industry output or sales in 200 8 were about $ 133.65 billion (Bn)

. Total foreign and domestic

exports of goods and services to customers outside of Florida amounted to $ 52.52 Bn . A s a result of the indirect

and induced multipl i er effects arising from export sales , the total output impac ts were estimated at $ 162.70 Bn.

Direct employmen t in the industry was 1.38 million fulltime and part

- time jobs, while total employment im pacts

,

including multiplier effects, were estimated at 1.61 million jobs (Figure 1) . The direct value added contribu tion of

these industries was $ 60.89 Bn, and total value added impacts were $ 76.53 Bn. The total labor (earned) income

impact of employee wages and benefits and business proprietor income was $ 47.04 Bn. P roperty income impacts,

such as rents and dividends, amounted to $ 20.21 Bn. Indirect business tax impacts paid to local, state an d federal

gove rnments were $ 9.28 Bn.

Excluding the sectors for Food & Kindred Products distribution , such as restaurants, food stores

, and food

wholesalers , total economic values were output of $ 66.04 Bn

, exports of $ 23.25 Bn , output impacts of $ 86.34 Bn,

direct employment of 422,127 jobs, employment impacts of 581,820 jobs, direct value added of $21. 93 Bn, value

added impacts of $ 32.54 Bn, labor income impacts of $ 18.86 Bn, property income impacts of $ 11.06 Bn, and

indirect business tax impacts of $ 2.62 Bn (Table 1)

.

Crop, Livestock, Forestry and Fisheries Production includes sectors for production of basic unrefined

foo d and fiber commodities. In 2008 , t otal output of these sectors was $ 11.57 Bn, exports were $ 6.09 Bn, output

, impacts were $ 16.24 Bn, direct value added was $ 6.59 Bn, value added impacts were $ 9.22 Bn, direct4

employment was 178,838 jobs, direct employment was 178,838 jobs, and total employment impacts were

230,946 jobs (Table 1, Figure s 2 ,3

, 4 )

. Among individual industry sectors in thi s group, the highest value added

and employment impacts were for Greenhouse, Nursery & Floriculture Production ($2.04 Bn, 26,046 jobs), Fruit

F arming ($ 1.78 Bn

, 36,672 jobs ), Support Activities for Agriculture and Forestry ($ 1.68 Bn

, 84,057 jobs ), and

Vege table and Melon farming ($1.7 4 Bn

, 18,827 jobs ). Large value added and employment impacts were also

realized for the sectors of Forestry and Timber Tracts ($ 512 Million or Mn

, 12,758 jobs ) , Sugarcane Farming

($310 Mn, 18,995 jobs), and Commercial Logging ($288 Mn, 5,007 jobs) . Value added impacts of $100 to $200

million were ob tained for Dairy Farming, Poultry and Egg Production, Commercial Fishing, and All Other Crop

Farming.

Agricultural Inputs and Services includes a variety of sectors providing inputs or supporting services

for agricultural operations or management of buildings and grounds

. Output impacts in 2008 by this group totaled

$ 18.35 Bn, value added impacts were $ 6.90 Bn, direct employment was 135,496 jobs and employment impacts

were 164,408 jobs (Table 1, Figure s 2

, 3 & 4 )

. Among leading sectors in this group

, La ndscape S ervices had

value added impacts of $ 2.62 Bn and employment impacts of 84,728 jobs

, followed by Fertilizer M anufacturing

($ 2.34 Bn

, 24,962 jobs )

, Veterinary S ervices ($ 988 Mn

, 27,379 jobs ), Pest Control Services ($ 802 Mn

, 25,937

jobs), and Pesticide and Other Agricultural Chemical Manufacturing ($ 64 Mn , 322 jobs) . Other minor sectors in

this group included Farm Machinery and Equipment Manufacturing and Lawn and Garden Equipme nt

Manufacturing.

M ining is a natural resource

- based activity for extraction of basic mineral commodities such as oil,

natural gas, stone, sand, gravel, clay, phosphate

, and a variety of metals. In 2008 , the Mining industries in Florida

collectively had direct output of $ 5.02 Bn, exports of $ 1.23 Bn, output impacts of $ 6.22 Bn, value added impacts

of $ 2.29 Bn, direct employment of 12,746 jobs, and employment impacts of 20,327 jobs (Table 1

, Figure s 2 ,3 &

4 )

. The largest individual sector was Extraction of O il and N atural G as , which h ad value added impacts of $1.12

Bn and generated employment impacts of 13,340 jobs. Other individual sectors with significant value added

impacts included Mining and Quarrying Other Nonmetallic Minerals ($496 Mn), Mining and Q uarrying S tone

($ 249 Mn) , Mining and Q uarrying S and, G ravel, C lay ($ 163 Mn) , and Drilling Oil and Gas Wells ($ 73 Mn).

F ood & Kindred Products Manufacturing industries c onvert unrefined agricultural commodities to

food pro ducts for final consump tion or use

. In 2008 , t his group of industries in Florida had direct output of $ 24.04

Bn, including exports of $ 5.83 Bn, with output impacts of $ 29.53 Bn, value added impacts of $ 8.15 Bn , direct

employment of 41,924 jobs and total employment impacts of 79,797 jobs (Table 1, Figure s 2 ,3 & 4 )

. This large

industry group includes 34 i ndividual sectors , of w hich the highest value added and employment impacts were

for Tobacco Product M anufacturing ($2.26 Bn , 4,940 jobs ), Fruit and Vegetable Canning, Pickling , and Drying

($811 Mn, 8,110 jobs), Soft Drink and Ice Manufacturing ($ 810Mn

, 10,158 jobs ), Sugar Manufacturing ($ 708

Mn

, 12,719 jobs ) , Breweries ($ 616 Mn

, 2,114 jobs ), Bread and Bakery Product Manufacturing ($426 Mn, 8,375

jobs), and Frozen Food Manufacturing ($348 Mn

, 4,435 jobs )

. Other sectors with significant value added impacts

included Coffee and Te a Manufacturing ($246 Mn), Animal Slaughtering ($ 207 Mn), Fluid Milk and Butter

Manufacturing ($ 193 Mn), and Snack Food Manufacturing ($ 156 Mn).5

Forest Products Manufacturing i s a group of industries for processing of raw timber or wood into

finished wood and paper products. In 2008 , this industry group had direct output valued at $ 7.86 Bn, with export

sales of $ 3.14 Bn, output impacts of $ 10.85 Bn , direct employment of 25,405 jobs, employment impacts of

46,675 jobs, and value added impacts of $ 3.62 Bn, including labor income impacts of $ 2.43 Bn, other property

income impacts of $ 976 Mn, and indirect business tax impacts of $ 209 Mn (Table 1, Figure s 2 ,3 & 4 ). Leading

sectors within this group for value added and employment impacts were Paper mills ($ 665 Mn

, 6,929 jobs ),

Sanitary Paper Product Manufacturing ($426 Mn, 2,618 jobs), Wood Window and Door Manufacturing ($380

Mn, 6,701 jobs), Paper board Co ntainer Manufacturing ( $ 297 Mn, 3,681 jobs) , Engineered Wood Member and

Truss Manufacturing ($ 296 Mn, 6,083 jobs), Pulp Mills ($246 Mn, 4,626 jobs), and Paperboard Mills ($ 235 Mn,

4,109 jobs). Other sectors with significant value added impacts included Sa wmills and Wood Preservation ($190

Mn), Statio nary Product Manufacturing ($140 Mn), and Veneer and Plywood Manufacturing ($132 Mn).

Nature

- B ased Recreation includes recreational activities that are generally tied to natural resources or

managed landscapes

, such as golf, recreational fishing and hunting/trapping . In 2008 , this industry group in

Florida had total output of $ 3.64 Bn, exports or sales to Florida visitors of $1. 39 Bn, output impacts of $5.14 Bn,

direct employment of 27,699 jobs, employment impacts of 39,667 jobs, and value added impacts of $ 2.36 Bn

(Table 1 and Figures 2

, 3 & 4 ). Among individual sectors, Golf C ourses had value added impacts of $1. 89 Bn and

employment impacts of 31, 462 jobs

, followed by Recreational Fishing ( $ 394 Mn, 6,555 jobs ) , and Commercial

Hunting and Trapping ($ 69 Mn, 1,650 jobs).

Food & Kindred Products Distribution includes activities for wholesale and retail trade in a gricultural

and related products

. T his large group of industry sectors is only in directly related to agriculture and natural

resources because it serves to deliver products to final consumers, but is included here for perspective on the

scope of the entire market chain for fo od and kindred products. In 2008 , this industry group in Flor ida had total

output of $ 67.61 Bn, exports of $ 9.27 Bn, output impacts of $ 76.36 Bn, direct employment of 959,814 jobs,

employment impacts of 1,027,319 jobs, and value added impacts of $ 43.99 Bn , including labor income i m pacts of

$ 28.17 Bn, other property income impacts of $9. 15 Bn, and indir ect business tax impacts of $6.67 Bn (Table 1

and Figures 2 , 3 & 4 ). Collectively, this group represented about 57 per cent of total value added impact s and 63

percent of employment impacts for the entire set of industr ies defined in this report. Among i ndividual sector s

with in this group

, Food Services and D rinking P laces (restaurants and bars ) had by far the greatest value added

impacts ( $ 24.22 Bn ) and employment impacts ( 709,141 jobs )

, followed by Wholesale Trade in Food and Kindred

P roducts ($ 10.40 Bn

, 97,613 jobs ), Food and B everage Stores ($ 8.34 Bn

, 204,147 jobs ), and Retail Lawn and

Garden Centers ($ 942 Mn

, 18,418 jobs ).

Economic Contributions by Commodity Group s

In addition to the industry groups noted above, e conomic contribution s were also evaluated for groups of

food, fiber and mineral commodit ies having identifiable market chain linkages between producers, manufacturers

and service sectors . In this section, some sectors are regrouped to reflect these linkages, with results summarized6

in Figures 5, 6 and 7

. Environmental Horticulture which includes the sectors N ursery and G reenhouse

P roduction

, L a ndscape S ervices , and Retail Lawn and Garden Stores, had value added impacts of $ 5.60 Bn and

employment imp acts of 127,192 jobs

. Forestry and Forest Products , which includes the sectors for Forestry and

Tim ber Tracts, Logging, and 16 forest product manufacturing sectors, had value added impacts of $ 4.42 Bn and

employment impacts of 64,440 jobs. Fruit and Vegeta b le Farming and Processing , including sectors for F rozen

Food Manufacturing and Fruit and Vegetable Canning, Pickling and Drying, as well Fruit Farming and Vegetable

and Melon Farming, had value add impacts of $ 4.68 Bn and employment impacts of 68,184 jobs

. Sugarcane

Farming and Refined Sug ar Manufacturing had value added impacts of $1 .02 Bn and employment impacts of

31,714 jobs. Livestock and Dairy Farming and Ani mal Products Manufacturing , including the processing sectors

Animal Slaughtering, Poultry Pro cessing, Cheese Manufacturing, and Ice Cream Manufacturing

, had total value

added impacts of $1.07 Bn, and employment impacts of 25,007 jobs . A gricultural Input s and Services , similar to

that noted in the previous section, but with some sectors removed, ha d total value added impacts of $5.16 Bn and

employment impacts of 137,800 jobs

. F ishing and Seafood Products had value added impacts of $ 297 Mn and

employment impacts of 10, 341 jobs. The commodity group Grain and Oilseed Farming and Processing had value

ad ded and employment impacts of $1 76 Mn and 1, 380 jobs, respectively.

Economic Contributions in Florida Regions and Counties

Regional impacts of agricultur e

, natural resource s, and related m anufacturing , distribution and service

industries in 2008 w ere evaluated for nine economic regions of Florida , as illustrated in Figure 8 , with results

summarized in Table 2 and Figure s 9 and 10

. The region with the highest value adde d and employment impacts

w as Miami

- Ft. Lauderdale ($ 25.51 Bn

, 526,061 jobs ), followed by Orlando ($ 18.32 Bn

, 400,121 jobs ), Tampa

- St.

Petersburg ($ 12.32 Bn

, 249,529 jobs ), Jacksonville ($ 7.65 Bn

, 122,151 jobs ), Sarasota

- Bradenton ($ 6.98 Bn

,

161,744 jobs ), Gainesville ($ 2.01 Bn , 53,369 jobs ), Pensacola ($ 1.96 Bn

, 49,102 jobs ), Talla hassee ($ 1

. 51 Bn

,

36,719 jobs ), and Panama City ($ 359 Mn

, 8,831 jobs )

.

E conomic impacts were also evaluated for all 67 counties in Florida as shown in Table 2

. T he eight

largest counties in terms of value added impacts and emp loyment impacts in 2008 were Miami

- Dade ($9.38 Bn

,

176,391 jobs ), Hillsborough ($ 7.10 Bn

, 138,468 jobs ), Orange ( $ 6.52 Bn

, 130,610 jobs )

, Broward ( $6.24 Bn,

127,541 jobs), Palm Beach ($ 6.01 Bn

, 130,192 jobs ), Duval ($5.76 Bn, 82,259 jobs), Pinellas ($4.16 Bn

, 80,831

jobs ) and Polk ($ 3.69 Bn

, 65,986 jobs )

. Eight o ther counties with value added impacts exceeding $ 1 billion were

Lee ($ 2 .04 Bn), Collier ($ 1.73 Bn)

, Manatee ($1.73 Bn) , Brevard ($1.55 Bn), Seminole ($1.47 Bn), Volusia

($1.29 Bn), Sarasota ($1.15 Bn), and Marion ($1.04 Bn)

.

Trends in Economic Contribution s f or 2001 t hrough 20 0 8

In addition to t he economic contributions in 200 8 , it is important to understand how these values have

changed over time. Trends in economic im pacts of agriculture, natural resources and related industries between

2001 and 200 8 are shown in Figures 11 t hrough 1 4

. Annual average growth rate were estimated for 2001 through

2007 and for 2007 to 2008 in order to show the impact of the recent recession on these i ndustr ies

. Note again that

all values were adjusted for inflation to express in constant 200 8 dollar s

. Overall value added impacts grew from7

$ 63.82 Bn in 2001 to $ 76.53 Bn in 2007 , representing an average annual growth rate of 3.6 percent for the time

period of 2001

- 07 . H owever, total value ad ded impacts declined by more than 18 percent for 2 007

- 08. T otal

output impacts grew by an average of 5.3 percent annually during 2001 to 2007

, but declined by more than 1 3

percent from 2007 to 2008. T otal employment impacts inc reased by 1.7 percent annually during 2001

- 2007 but

reversed course and declined nearly 14 percent from 2007 to 2008. Although the direct output, value added and

employment (excluding multiplier effects) actually increased modestly from 2007 to 2008, the severe declin e in

export activity for virtually all sectors in 2008 lead to the sharp decrease in estimated total impacts (including

multiplier effects). Also n ote that these trends may reflect changes in the structure of the Florida economy as well

as changes in indus try activity and commodity prices.

Among industry groups, average annual growth in value added impacts during the 2001

- 07 period was

highest for Mining (19. 1 %) and Crop, Livestock, Fo restry & Fishery Production (10.2 %), followed by Food and

Ki ndred Products Distribution (4.9 %) and Forest P roduct Manufacturing (3.0%)

. From 2007 to 2008 Forest

Product Manufacturing and Agricultural Input and Services suffered the highest setback, with value added

impacts declin ing by 35 and 34 percent, respectively, w hile Minin g was down by 33 percent . In the latter period

,

value added impacts of Food & Kindred Products Manufacturing decline d by 27 percent, and Crops, Livestock,

Forestry and Fishery Products decreased by 22 percent. Employment and output impacts decli ned significantly as

well in the 2007

- 0 8 period

. Employment impacts in Mining

, Forest Products Manufacturing, and Agriculture and

Input Services declined by 45, 34 and 23 percent, respectively, during th is period. O utput impacts declined by 22

percent fo r Forest Products Manufacturing and Food & Kindred Products Manufacturing

. Mining was one of the

few industry groups that saw increased output impacts of 40 percent.

The effect of the recession on individual industry sectors varied widely . While many se ctors experienced

significant decline during 2007

- 2008, there were some sectors that enjoyed significant growth during this p eriod.

Individual sectors with positive growth in value added impacts included Lawn and garden equipment

manufacturing (498 % ), Tre e nut farming (234 % ), Oilseed farmin g (169 % ), Coffee and tea manufacturing (156 %)

and Cheese manufacturing (79 % ). Individual i ndustry sectors with the highest decline in value added impacts

were Seasoning and dressing manufacturing (

- 122 % ), Distillers (

- 90 % ), Coal mining (

- 82 % ), Commercial hunting

and trapping (

- 80%), Soft drink and ice manufacturing (

- 66 percent), Fruit and vegetable canning, picking and

drying (

- 54 percent), Forestry, forest products and timber tracts (

- 48 % ), and Sugar manufacturing (

- 3 8 % ).

Share of Gross State Product and Employment

The relative importance of the agricultur e

, natural resources, and related manufacturing, distribution an d

service i ndustries in Florida can be gauged by its share of overall economic activity in the state . The Gross State

Product of Florida in 2008 was $7 22 Bn , which is equivalent to the sum of value added for all in dustries , and t otal

employment in the state was 10.1 million jobs. The direct value added contributed by agriculture, natural resource

and related industries ($60.89 Bn) represented 8.2 percent of Florida’s Gross State Product, and rank ed fourth

a mong major industry groups ( Figure 15 ). D irect employment in these industries represented 13.4 percent of all

jobs in the state

, ranking second among major industry groups , behind Professional and Technical Services8

(Figure 16 )

. Excluding Food & Kindred Product Distribution, the agriculture, natural resources and related

industries represented 3.0 percent of Gross Sta te Product and 4.1 percent of total state employment.



### Conclusions

This analysis showed that agriculture and natural resources are link ed to a broad array of economic

sectors for commodity production, food and kindred product manufacturing, distribution, and re lated service

activities. These industries collectively have a significant economic impact on the Florida economy , accounting

for about 8.4 percent of Gross State Products and 13.7 percent of total employm ent, which is ranked second

among major industry groups. Food and Kindred Products Distribution is by far the largest segment of the

industry, representing 64 percent of value added impacts and 64 percent of employment impacts. These industries

are presen t throughout the state, with major activity in urbanized metro areas as well as rural counties, where it

may be relatively more important as a share o f total economic activity , although less in absolute magnitude

. The

industries have grown substantially si nce 2001 , however, g rowth significantly slowed during the 2007

- 0 8 period

along with the overall Florida and U.S. economy

.

In addition to these estimates of commercial activity and employment, agricultural and forest lands

provide valuable non

- marketed environmental services for water supply, water quality improvement, pollution

abatement, erosion control and shoreline protection, carbon sequestration and climate stabilization, wildlife

habitat, and open space for comm unity buffers and outdoor recreation. These non

- market values, however, are

beyond the scope of this analysis.



### Literature and Information Sources Cited

Hodges, Alan W., and John J. Haydu. Economic Impacts of the Florida Environmental Horticulture Industry in

2005. University of Florida/IFAS Extension document FE675, Gainesville, October 2006. Available at

http://edis.ifas.ufl.edu/fe675

.

Hodges, Alan W., and John J. Haydu. Economic Impacts of the Florida Golf Course Industry

. University of

Florida/IFAS , Food & Resource Economics Department, Economic Information Report EIR 02

- 04, 34

pages, June 200 2

. Executive summary a vailable at http://edis.if as.ufl.edu/pdffiles/FE/FE34400.pdf

Hodges, Alan W., W. David Mulkey, Janaki R. Alavalapati and Douglas R. Carter. Economic Impacts of the

Forest Industry in Florida, 2003. University of Florida/IFAS Extension document FE538, Gainesville, April

2006. Availa

ble at http://edis.ifas.ufl.edu/fe538

.

Hodges, Alan W., M. Rahmani, and W. David Mulkey. Economic Impacts of the Florida Citrus Industry in 2003

-

04. University of Florida/IFAS Extension document FE633, Gainesvil le, February 2005. Available at

http://edis.ifas.ufl.edu/fe633

.

Hodges, Alan W., M. Rahmani, and W. David Mulkey. Economic Contributions of Agricultur al , Food

Manufacturing and Natural Resource Industries in Flo rida in 200 6 . University of Florida/IFAS Extension

document FE 702

, 16 pages, Gainesville, Revised March 200 8 . Available at http://edis.ifas.ufl.edu/fe702

.9

Hodges, Alan W. and M. Rahmani

. Economic Contributions of Florida’s Agricultural, Natural Resource, Food

and Kindred Product Manufacturing, Distribution and Service Industries in 200 7. University of Florida/IFAS

Extension document FE 800

, 27 pages, Gainesville, March 200 9 . Available at http://edis.ifas.ufl.edu/fe800

.

Johnson, K. and J. Kort. Redefinition of the BEA Economic Areas

. Bureau of Economic Analysis, U.S.

Department of Commerce, Survey of Current Business , pp. 68

- 75, Nov. 2004. Available at

http://www.bea.gov/scb/pdf/2004/11November/1104Econ

- Areas.pdf

Miller, R. E. and P.D. Blair. Input

- Output Analysis: Foundations and Extensions. 2 nd edition. 750 p., Cambridge

University Press , 2009

.

Minnesota IMPLAN Group, Inc. (MIG). IMPLAN System (data and software), 1725 Tower Drive West, Suite

140, Stillwater, MN 55082. Web resources available at www.implan.com

.

U.S. Department of Commerc e, Bure au of Economic Analysis. Gross D omestic P roduct I mplicit P rice D eflator,

1970

- 2008 quarterly. Available at http://research.stlouisfed.org/fred/data/gdp/gdpdef , accessed Dec. 2008

.

Wa tson, P

. , J

. Wilson, D . T hilmany, and S . Wi nter. Determining Economic Contributions and Impacts: What is

the difference and why do we care? Journal of Regional Analysis and Policy , Vol. 37 ( 2 ): 140

- 146, 2007.

Available at http://www.jrap

- journal.org/pastvolumes/2000/v37/F37

- 2

- 6.pdf

.10 Appendix A: Glossary of Economic Impact Terms

Terms are presented in a logical order rather than alphabetical order

Region defines the geographic area for which impacts are estimated. Regions are generally an aggregation of one or more

counties. Economic regions identified in this paper were defined based on worker com muting patterns.

Sector is a grouping of industries that produce similar products or services, or production processes. Most economic

reporting and models in the U.S. are based on the Standard Industrial Classification system (SIC code) or the North Americ an

Industrial Classification System (NAICS).

Impact analysis estimates the impact of a change in output or employment resulting from a change in final demand to

households, governments or exports.

Input

- output (I

- O) model . An input

- output model is a repre sentation of the flows of economic activity between industry

sectors within a region. The model captures what each business or sector must purchase from every other sector in order to

produce its output of goods or services. Using such a model, flows of ec onomic activity associated with any change in

spending may be traced backwards (e.g., purchases of plants that leads growers to purchase additional inputs

-- fertilizers,

containers, etc.). Multipliers for a region may be derived from an input

- output model of the region's economy.

IMPLAN is a micro

- computer

- based input output modeling system and Social Accounting Matrix (SAM). With IMPLAN,

one can estimate I

- O models of up to 440 sectors for any region consisting of one or more counties. IMPLAN includes

procedures for generating multipliers and estimating impacts by applying final demand changes to the model. The current

version of the software is IMPLAN Pro 2.

Direct effects are the changes in economic activity during the first round of spending. Secondary effects are the changes in

economic activity from subsequent rounds of re

- spending. There are two types of secondary effects: Indirect effects are the

changes in sales, income o r employment within the region in backward

- linked industries supplying goods and services to

businesses. For example, the increased sales in input supply firms resulting from more nursery industry sales is an indirect

effect. Induced effects are the increa sed sales within the region from household spending of the income earned in the direct

and supporting industries. Employees in the direct and supporting industries spend the income they earn on housing, utilities

, groceries, and other consumer goods and se rvices. This generates sales, income and employment throughout the region’s

economy. Total effects are the sum of direct, indirect and induced effects.

Multipliers capture the total effects, both direct and secondary, in a given region, generally as a ratio of the total change in

economic activity in the region relative to the direct change

. Multipliers may be expressed as ratios of sales, income or

employment, or as ratios of total income or employment changes relative to direct sales. Multipliers expr ess the degree of

interdependency between sectors in a region’s economy and therefore vary considerably across regions and sectors. Type I

multipliers include only direct and indirect effects. Type II multipliers also include induced effects. Type SAM mult ipliers

used by IMPLAN additionally account for capital investments and transfer payments such as welfare and retirement income.

A sector

- specific multiplier gives the total changes to the economy associated with a unit change in output or employment

in a given sector

.

Purchaser prices are the prices paid by the final consumer of a good or service. Producer prices are the prices of goods at

the factory or production point. For manufactured goods the purchaser price equals the producer price plus a retail m argin, a

wholesale margin, and a transportation margin. For services, the producer and purchaser prices are equivalent.

Margins. The retail, wholesale and transportation margins are the portions of the purchaser price accruing to the retailer,

wholesaler, and grower, respectively. Only the retail margins of many goods purchased by consumers accrue to the local

region, as the wholesaler, shipper, and manufacturer often lie outside the local area.

Sales or output is the dollar volume of a good or service pro duced or sold. Final Demand is sales to final consumers,

including households, governments, and exports. Intermediate sales are sales to other industrial sectors. Income is the

money earned within the region from production and sales. Total income includes personal income (wage and salary income,

including income of sole proprietor’s profits and rents). Jobs or employment is a measure of the number of jobs required to

produce a given volume of sales/production, usually expressed as full time equivalents, or as the total number including part

time and seasonal positions. Value Added is the sum of total income and indirect business taxes. Value added is the most

commonly used measure of the contribution of a region to the national economy, as it avoids double counting of intermediate

sales and captures only the “value added” by the region to final products.11 Figures and T ables

Figure 1. Structure of economic activity in Florida agriculture, natural resources, food and kindred product

manufacturing, distribution and service industries in 200 8

.

Figure 2. Output impacts of agriculture

, natural resources , food and kindred product manufacturing , distribution

and service industries in Florid a in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 )

. 0 10 20 30 40 50 60 70 80

Food & Kindred Products

Distribution

Crop, Livestock, Forestry

& Fisheries Production

Agricultural Inputs &

Services

Food & Kindred Products

Manufacturing

Nature

- based

Recreation

Forest Products

Manufacturing

Mining Billion Dollars

Direct

Indirect &

Induced12

Figure 3

. Employment impacts of agriculture

, natural resources , food and kindred product manufacturing

, distribution and service industries in Florid a in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ).

Figure 4

. Value added (income) impacts of agriculture

, natural resources , food and kindred product

manufacturing , distribution and service industries in Florid a in 2008.

Source: IMPLAN Professional data for Florida (MIG, Inc, 2009). 0 200 400 600 800 1,000 1,200

Food & Kindred Products

Distribution

Crop, Livestock, Forestry

& Fisheries Production

Agricultural Inputs &

Services

Food & Kindred Products

Manufacturing

Nature

- based

Recreation

Forest Products

Manufacturing

Mining Thousand Jobs (fulltime, part

- time)

Direct

Indirect &

Induced

0 10 20 30 40 50

Food & Kindred Products

Distribution

Crop, Livestock, Forestry

& Fisheries Production

Agricultural Inputs &

Services

Food & Kindred Products

Manufacturing

Nature

- based

Recreation

Forest Products

Manufacturing

Mining Billion Dollars

Direct

Indirect &

Induced13

Figure 5

. Output impacts of food and fiber commodity groups in Florid a in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ).

Figure 6

. Employment impacts of food and fiber commodity groups in Florid a in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). 0 5 10 15 20

Environmental Horticulture

Agricultural Inputs & Services

Fruit & Vegetable Farming & Processing

Forestry, Wood & Paper Product

...

Other Food Product Manuf.

Livestock & Dairy Farming & Animal

...

Sugarcane Farming, Sugar Refining

Mining

Fishing & Seafood Products

Other Crop Farming

Wildlife (hunting)

Grain & Oilseed Farming & Processing Billion Dollars

Direct

Indirect &

Induced

0 50 100 150

Environmental Horticulture

Agricultural Inputs & Services

Fruit & Vegetable Farming & Processing

Forestry, Wood & Paper Product

...

Other Food Product Manuf.

Livestock & Dairy Farming & Animal

...

Sugarcane Farming, Sugar Refining

Mining

Fishing & Seafood Products

Other Crop Farming

Wildlife (hunting)

Grain & Oilseed Farming & Processing Thousand Jobs (fulltime, part

- time)

Direct

Indirect &

Induced14

Figure 7

. Value added (income) impacts of food and fiber commodity groups in Florid a in 200 8.

Source: IMPLAN Professional data for Florida (MIG, Inc, 2009).

Figure 8

. Economic regions of Florida.

S ource: U.S. Commerce Department, Bureau of Economic Analysis (UD DOE

- BEA). 0 1 2 3 4 5 6

Environmental Horticulture

Agricultural Inputs & Services

Fruit & Vegetable Farming & Processing

Forestry, Wood & Paper Product

...

Other Food Product Manuf.

Livestock & Dairy Farming & Animal

...

Sugarcane Farming, Sugar Refining

Mining

Fishing & Seafood Products

Other Crop Farming

Wildlife (hunting)

Grain & Oilseed Farming & Processing Billion Dollars

Direct

Indirect &

Induced15

Figure 9

. V alue added impacts in Florid a regions by agriculture

, natural resources , food and kindred product

manufacturing

, distribution and service industries in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). Impact estimates include regional multiplier effects.

Figure 10

. Employment impacts in Florid a regions by agriculture

, natural resources , food and kindred product

manufacturing , distribution and service industries in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). Impact estimates include regional multiplier effects. 0 5 10 15 20 25 30

Billion Dollars Food & Kindred Products

Distribution

Nature

- based Recreation

Mining

Forest Products

Manufacturing

Food & Kindred Products

Manufacturing

Agricultural Inputs &

Services

Crop, Livestock, Forestry &

Fisheries Production

0 100 200 300 400 500 600 Thousand Jobs (fulltime, part - time)

Food & Kindred Products

Distribution

Nature

- based Recreation

Mining

Forest Products

Manufacturing

Food & Kindred Products

Manufacturing

Agricultural Inputs &

Services

Crop, Livestock, Forestry &

Fisheries Production16

Figure 1 1

. Trend s in employment impacts during 2001

- 0 8 for Florida agriculture

, natural resources , food and

kindred product manufacturing , distribution and service industries

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ).

Impact estimates include regional multiplier effects. Note that data were not available for 2005. 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 Thousand Jobs

(fulltime & part

time)

Grand Total

Food & Kindred

Products

Distribution

0 50 100 150 200 250 300

2001 2002 2003 2004 2005 2006 2007 2008 Crop, Livestock,

Forestry & Fisheries

Production

Agricultural Inputs

& Services

Food & Kindred

Products

Manufacturing

Forest Products

Manufacturing

Nature

- based

Recreation

Mining17

Figure 1 2

. Trend s in value added impacts during 2001

- 0 8 for industry groups of Florida agriculture

, natural

resources , food and kindred product manufacturing , distribution and service s

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). Values expressed in 2008 dollars using GDP Implicit Price

Deflator (U.S. Commerce Department). Impact estimates include regional multiplier effects. Note that data were not

available for 2005. 30 40 50 60 70 80 90 100

Billion 2008 Dollars

Grand Total

Food & Kindred

Products

Distribution

0 2 4 6 8 10 12 14 16

2001 2002 2003 2004 2005 2006 2007 2008 Crop, Livestock,

Forestry & Fisheries

Production

Food & Kindred

Products

Manufacturing

Agricultural Inputs &

Services

Forest Products

Manufacturing

Nature

- based

Recreation18

Figure 1 3

. Trend s in employment impacts for Florida food and fiber commodity groups, 2001

- 08.

Source: IMPLAN Professional data for Florida (MIG, Inc, 2009).

Impact estimates include regional multiplier effects. Note that data were not available for 2005.

Figure 1 4

. Trend s in value added impacts for Florida food and fiber commodity groups, 2001

- 08.

Source: IMPLAN Professional data for Florida (MIG, Inc, 2009). Values expressed in 2008 dollars using GDP Implicit Price

Deflator (U.S. Commerce D epartment). Impact estimates include regional multiplier effects. Note that data were not

available for 2005. 0 20 40 60 80 100 120 140 160 180

2001 2002 2003 2004 2005 2006 2007 2008 Thousand Jobs

(fulltime & part

time)

Environmental Horticulture

(nursery & greenhouse,

landscape services)

Fruit & Vegetable Farming &

Processing

Forestry, Wood & Paper

Product Manufacturing

Sugarcane Farming, Refined

Sugar & Confections

Livestock & Dairy Farming &

Animal Products

Manufacturing

Mining

Fishing & Seafood Products

Grain & Oilseed Farming &

Processing

0 1 2 3 4 5 6 7 8

2001 2002 2003 2004 2005 2006 2007 2008 Billion 2008 Dollars Environmental Horticulture

(nursery & greenhouse,

landscape services)

Fruit & Vegetable Farming

& Processing

Forestry, Wood & Paper

Product Manufacturing

Mining

Sugarcane Farming, Refined

Sugar & Confections

Livestock & Dairy Farming

& Animal Products

Manufacturing

Fishing & Seafood Products

Grain & Oilseed Farming &

Processing19

Figure 1 5

. Contribution to Gross State Product of Florida by major industry grou ps in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). Agriculture,

Natural

Resources,

Related

Manufacturing,

Distribution &

Services, 60,886,

8%

Construction,

37,297, 5% Consumer

Services,

22,985, 3%

Education, 4,033,

1%

Government,

90,741, 13%

Health Care,

52,849, 7%

Households,

50,397, 7%

Information and

Communications,

25,927, 4% Manufacturing,

30,856, 4% Professional and

Technical

Services, 87,716,

12% Real Estate and

Financial

Services, 113,607,

16% Retail Trade,

46,437, 6% Social Services &

Organizations,

9,003, 1% Transportation,

20,649, 3% Travel and

Entertainment

Services,

22,640, 3%

Utilities, 11,336,

2% Wholesale Trade,

34,909, 5%

Values in millions dollars20

Figure 1 6

. Direct e mployment by major in dustry groups in Florida in 200 8

.

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ). Agriculture,

Natural

Resources,

Related

Manufacturing,

Distribution &

Services,

1,381,921, 14%

Construction,

744,109, 7% Consumer

Services,

369,094, 4%

Education,

107,318, 1%

Government,

1,181,479, 12%

Health Care,

860,920, 9%

Households,

179,324, 2% Information and

Communications,

190,866, 2% Manufacturing,

320,846, 3% Professional and

Technical

Services,

1,430,518, 14% Real Estate and

Financial

Services,

1,068,266, 11% Retail Trade,

955,041, 9% Social Services &

Organizations,

329,760, 3% Transportation,

313,627, 3% Travel and

Entertainment

Services, 362,579,

4% Utilities,

24,456, 0% Wholesale Trade,

294,001, 3%

Jobs include fulltime and part

- time positions21

Table 1. Economic contributions of Florid a agriculture

, natural resources , food and kindred product

manufacturing , distribution and service industr y groups and sectors in 200 8

.

Industry Group / Sector Direct

Employ

ment

(Jobs) Employ

ment

Impacts

(Jobs) Direct

Output

(million $) Exports

(million $) Output

Impacts

(million $) Value

Added

Impacts

(million $)

Crop, Livestock, Forestry & Fisheries Production 178,838 230,946 11,566.2 6,090.2 16,241.6 9,221.9

Support activities for agriculture and forestry 75,771 84,057 1,564.6 844.4 2,654.4 1,678.9

Fruit farming 24,830 36,672 1,972.0 1,302.5 2,884.9 1,775.9

Greenhouse, nursery, and floriculture production 19,702 26,046 1,930.2 1,353.5 2,613.8 2,037.2

Sugarcane and sugar beet farming 16,740 18,995 442.2 264.4 642.4 310.1

Vegetable and melon farming 12,654 18,827 2,164.3 999.3 2,689.6 1,739.2

Commercial Fishing 7,754 8,485 259.5 167.0 351.2 101.4

Animal production, except cattle and poultry and eggs 4,745 4,851 174.8 21.5 186.2 99.5

Cattle ranching and farming 4,204 4,542 404.0 44.4 442.9 87.1

Dairy cattle and milk production 4,202 4,284 463.8 17.7 475.2 181.1

Commercial logging 3,516 5,007 724.3 102.3 876.6 288.4

All other crop farming 1,669 2,986 322.6 167.6 440.3 188.3

Forestry, forest products, and timber tract production 1,364 12,758 658.5 437.8 1,233.8 512.0

Poultry and egg production 887 2,125 403.0 295.8 621.8 155.7

Grain farming 287 345 20.1 11.3 25.8 13.9

Cotton farming 284 602 42.1 42.1 71.3 36.4

Oilseed farming 83 117 7.5 7.5 10.8 6.1

Tree nut farming 74 140 8.6 7.1 13.3 7.7

Tobacco farming 73 106 4.0 4.0 7.1 2.8

Agricultural Inputs & Services 135,496 164,408 13,548.0 5,574.7 18,346.5 6,902.6

Landscape services 79,598 84,728 4,201.8 737.0 4,837.6 2,619.3

Veterinary services 26,006 27,379 1,936.0 184.9 2,116.6 988.4

Pest control services 24,367 25,937 1,286.3 225.6 1,480.9 801.8

Fertilizer manufacturing 5,017 24,962 5,696.8 4,234.0 9,349.0 2,342.0

Farm machinery and equipment manufacturing 277 897 142.6 128.0 234.6 74.3

Pesticide and other agricultural chemical manuf

. 161 322 258.1 39.0 284.3 64.0

Lawn and garden equipment manufacturing 71 183 26.4 26.2 43.5 12.7

Mining 12,746 20,327 5,019.3 1,232.8 6,225.6 2,289.3

Extraction of oil and natural gas 7,914 13,340 3,302.7 786.8 4,199.4 1,117.1

Mining and quarrying other nonmetallic minerals 1,491 2,718 674.7 243.0 847.7 495.9

Mining and quarrying stone 1,362 1,562 374.0 33.3 401.4 248.6

Mining and quarrying sand, gravel, clay, and ceramics 1,189 1,453 250.6 40.6 287.2 163.4

Drilling oil and gas wells 315 386 116.6 18.8 126.9 72.9

Support activities for oil and gas operations 207 207 51.0 0.0 51.0 19.0

Mining gold, silver, and other metal ore 83 281 124.1 61.2 156.2 95.8

Support activities for other mining 82 85 32.8 0.4 33.2 9.4

Mining iron ore 63 222 61.2 41.2 86.7 45.0

Mining coal 25 31 13.5 1.2 14.4 8.4

Mining copper, nickel, lead, and zinc 16 41 17.9 6.4 21.6 13.9

Food & Kindred Products Manufacturing 41,924 79,797 24,400.6 5,832.3 29,534.9 8,149.0

Soft drink and ice manufacturing 7,267 10,158 4,787.1 663.0 5,268.0 810.3

Bread and bakery product manufacturing 6,770 8,375 1,046.2 205.6 1,263.9 424.8

Fruit and vegetable canning, pickling, and drying 3,402 8,110 1,878.6 769.1 2,588.9 810.7

Frozen food manufacturing 3,136 4,435 1,036.8 198.4 1,222.3 348.4

Tobacco product manufacturing 2,342 4,940 4,668.2 986.6 5,192.0 2,256.7

All other food manufacturing 2,312 4,795 678.2 321.8 1,014.5 318.7

Animal (except poultry) slaughtering, rendering, and proc

. 2,267 4,369 1,049.1 223.3 1,286.6 207.2

Fluid milk and butter manufacturing 1,947 2,188 1,366.1 29.1 1,399.1 193.1

Seafood product preparation and packaging 1,689 1,856 582.8 22.0 602.1 97.3

Sugar cane mills and refining 1,614 12,719 1,263.6 887.2 2,380.4 708.222 Industry Group / Sector Direct

Employ

ment

(Jobs) Employ

ment

Impacts

(Jobs) Direct

Output

(million $) Exports

(million $) Output

Impacts

(million $) Value

Added

Impacts

(million $)

Poultry processing 1,302 1,552 286.0 54.2 324.0 70.0

Seasoning and dressing manufacturing 1,255 2,589 599.2 247.7 803.2 188.7

Cookie, cracker, and pasta manufacturing 968 1,496 380.2 91.7 463.6 118.9

Breweries 906 2,114 1,638.2 292.7 1,846.5 616.3

Coffee and tea manufacturing 717 3,077 502.0 267.7 791.7 245.6

Snack food manufacturing 665 1,446 442.9 158.8 557.9 156.0

Ice cream and frozen dessert manufacturing 651 828 320.9 27.7 348.8 61.6

Confectionery manufacturing from purchased chocolate 616 1,005 163.6 68.0 224.1 54.0

Other animal food manufacturing 560 693 528.0 40.6 551.0 55.3

Wineries 371 437 186.8 9.4 195.7 41.8

Nonchocolate confectionery manufacturing 360 637 101.4 51.5 143.9 37.7

Flour milling and malt manufacturing 200 866 301.4 119.1 400.9 151.9

Distilleries 125 190 106.9 18.9 116.5 64.8

Dog and cat food manufacturing 124 163 123.8 10.5 129.9 23.5

Flavoring syrup and concentrate manufacturing 113 161 209.4 10.7 216.3 46.7

Tortilla manufacturing 90 90 15.8 0.0 15.9 4.2

Chocolate and confectionery manufacturing from cacao 71 189 40.1 20.2 57.4 11.4

Cheese manufacturing 49 128 45.1 11.3 55.6 10.5

Dry, condensed, and evaporated dairy product manuf

. 24 141 25.7 16.8 42.1 10.1

Fats and oils refining and blending 9 11 14.5 1.0 14.8 0.9

Wet corn milling 4 37 8.0 6.8 12.7 3.6

Soybean and other oilseed processing 1 3 4.2 0.8 4.5 0.3

Breakfast cereal manufacturing 0 0 0.0 0.0 0.0 0.0

Beet sugar manufacturing 0 0 0.0 0.0 0.0 0.0

Forest Products Manufacturing 25,405 46,675 7,858.6 3,137.0 10,848.5 3,620.4

Wood windows and doors and millwork manufacturing 4,693 6,701 752.1 271.8 1,022.5 389.9

Engineered wood member and truss manufacturing 4,532 6,083 525.1 199.3 734.3 296.0

Paperboard container manufacturing 3,375 3,681 1,208.1 53.3 1,253.3 297.1

Sawmills and wood preservation 2,750 3,842 636.8 84.1 769.4 198.9

Sanitary paper product manufacturing 1,597 2,618 1,294.2 270.4 1,455.4 426.4

Wood container and pallet manufacturing 1,413 1,465 176.3 8.1 183.5 71.8

Paper mills 1,288 6,929 947.3 934.9 1,769.7 665.3

Stationery product manufacturing 1,061 1,810 332.8 122.9 443.4 140.6

Veneer and plywood manufacturing 1,043 1,930 213.4 90.8 323.3 132.5

Paperboard Mills 891 4,109 665.0 466.0 1,122.2 388.2

Pulp mills 652 4,626 499.2 499.2 1,051.7 391.8

All other miscellaneous wood product manufacturing 556 646 92.9 11.3 104.9 43.7

All other converted paper product manufacturing 496 696 141.2 32.3 169.8 49.3

Coated and laminated paper, packaging paper / film manuf

. 470 647 208.7 36.7 235.8 64.7

All other paper bag and coated and treated paper manuf

. 429 636 125.7 39.7 156.4 46.8

Reconstituted wood product manufacturing 163 255 39.7 16.2 52.7 17.5

Food & Kindred Products Distribution 959,814 1,027,319 67,611.9 9,268.7 76,365.3 43,991.7

Food services and drinking places 670,117 709,141 40,266.7 5,478.2 45,477.4 24,218.7

Retail Stores

- Food and beverage 200,088 204,147 12,504.0 518.4 13,013.7 8,345.8

Wholesale trade, food & kindred products 73,500 97,613 13,438.2 3,231.1 16,432.3 10,485.1

Retail lawn and garden centers 16,109 16,418 1,403.0 40.9 1,441.9 942.1

Nature

- based Recreation 27,699 39,667 3,643.8 1,388.4 5,141.6 2,357.0

Golf courses 21,689 31,462 2,885.8 1,127.1 4,109.6 1,893.1

Recreational fishing 4,518 6,555 601.2 234.8 856.2 394.4

Commercial hunting and trapping 1,492 1,650 156.8 26.5 175.8 69.5

Grand Total 1,381,92

1 1,609,139 133,648.3 32,524.2 162,704.0 76,531.9

S ource: IMPLAN data for Florida (MIG, Inc., 200 9 ). Total i mpact estimates include regional multiplier effects.23

Table 2

. E mployment impacts (job s ) in Florid a regions and counties by agriculture

, natural resources , food and

kindred product manufacturing , distribution and service industries in 200 8

.

Region / County Crop,

Livestock,

Forestry &

Fisheries

Production Agricultural

Inputs &

Services Food &

Kindred

Products

Distribution Mining Food &

Kindred

Products

Manufac

turing Forest

Products

Manufac

turing Nature

based

Recreation Total

Gainesville 19,871 3,059 25,096 806 1,469 1,277 290 51,868

Alachua 2,045 1,826 17,342 299 214 271 71 22,068

Bradford 436 106 847 239 49 104 26 1,807

Columbia 787 201 3,014 7 86 291 53 4,439

De Soto 8,086 146 636 0 216 0 71 9,156

Dixie 1,234 28 409 4 0 385 7 2,067

Gilchrist 806 62 271 6 59 81 3 1,289

Lafayette 643 301 182 35 0 13 32 1,205

Levy 1,774 105 1,195 82 13 25 11 3,205

Suwannee 3,801 169 1,099 115 828 12 3 6,027

Union 259 114 102 17 3 96 14 605

Jacksonville 5,362 10,197 80,666 1,310 6,391 5,278 2,255 111,459

Baker 246 178 700 0 0 0 0 1,123

Clay 487 1,190 7,462 598 4 217 110 10,067

Duval 1,109 6,708 55,588 527 6,246 2,538 981 73,697

Nassau 1,294 586 3,267 3 36 950 214 6,351

Putnam 1,139 278 2,033 134 0 1,421 55 5,059

St. Johns 1,088 1,258 11,617 48 105 151 894 15,161

Miami

- Fort Lauderdale 80,197 52,118 347,141 7,636 14,077 3,706 14,226 519,100

Broward 2,227 13,782 102,079 1,718 2,731 559 3,282 126,378

Glades 953 33 130 30 20 0 44 1,210

Hendry 12,894 195 1,495 194 1,644 0 17 16,439

Indian River 7,917 1,910 6,521 124 64 43 950 17,529

Martin 3,869 2,483 8,111 49 332 63 1,563 16,470

Miami

- Dade 12,661 14,479 134,878 3,072 4,299 2,183 1,508 173,080

Monroe 1,861 721 9,424 288 40 4 511 12,848

Okeechobee 3,127 298 1,382 57 179 0 26 5,069

Palm Beach 24,747 16,222 74,494 1,845 4,355 687 5,795 128,145

St. Lucie 9,941 1,995 8,627 259 412 168 531 21,933

Orlando 59,607 45,762 256,107 8,805 11,943 4,004 7,887 394,115

Brevard 715 2,989 25,499 259 143 205 1,261 31,071

Citrus 582 717 4,842 240 36 29 421 6,867

Flagler 695 613 2,748 160 16 34 45 4,312

Hardee 7,398 137 597 274 74 45 53 8,578

Highlands 12,931 484 3,540 139 37 61 313 17,506

Lake 4,061 2,735 11,739 623 658 230 321 20,368

Marion 6,888 2,926 12,472 692 643 350 550 24,521

Orange 5,798 11,385 105,108 481 3,000 643 1,781 128,198

Osceola 1,702 1,902 14,720 402 173 62 424 19,385

Polk 14,155 12,015 21,433 5,005 6,344 1,724 974 61,648

Seminole 651 6,356 24,378 133 276 451 411 32,657

Sumter 916 389 3,067 306 147 92 568 5,486

Volusia 3,115 3,114 25,964 89 396 78 765 33,520

Panama City 2,767 536 4,278 361 62 418 282 8,704

Bay 246 178 700 0 0 0 0 1,123

Calhoun 510 16 447 33 0 67 42 1,114

Gulf 299 21 500 7 6 58 9 900

Holmes 444 54 394 3 32 17 93 1,037

Jackson 913 80 1,670 254 14 269 83 3,284

Washington 357 188 567 63 10 7 55 1,246

Pensacola 2,738 4,414 38,246 1,693 344 1,007 798 49,240

Escambia 1,127 1,362 16,201 869 95 887 348 20,89024

Region / County Crop,

Livestock,

Forestry &

Fisheries

Production Agricultural

Inputs &

Services Food &

Kindred

Products

Distribution Mining Food &

Kindred

Products

Manufac

turing Forest

Products

Manufac

turing Nature

based

Recreation Total

Okaloosa 505 1,445 13,479 304 118 15 317 16,182

Santa Rosa 716 878 4,428 505 30 43 84 6,683

Walton 391 729 4,138 16 101 62 48 5,485

Sarasota

- Bradenton 30,026 20,964 95,178 3,273 2,780 759 10,032 163,012

Charlotte 1,285 1,551 6,759 240 7 71 522 10,434

Collier 11,713 4,483 18,993 992 107 70 3,972 40,331

Lee 2,516 6,500 33,720 998 305 174 2,942 47,154

Manatee 13,787 3,509 15,350 475 2,308 331 1,320 37,082

Sarasota 725 4,921 20,355 569 53 113 1,276 28,010

Tallahassee 6,084 4,238 21,732 1,331 579 1,399 596 35,961

Franklin 55 32 727 94 14 0 26 949

Gadsden 2,332 253 934 663 27 321 72 4,602

Hamilton 375 1,099 264 0 0 0 40 1,778

Jefferson 614 92 278 43 8 0 38 1,074

Leon 707 2,491 17,394 267 106 15 185 21,165

Liberty 352 20 173 51 0 286 152 1,034

Madison 759 9 508 0 289 40 38 1,645

Taylor 740 62 775 208 87 737 14 2,623

Wakulla 150 181 680 4 48 0 29 1,092

Tampa

- St. Petersburg 24,293 23,120 158,875 54,582 9,031 2,479 3,302 275,681

Hernando 598 918 6,175 453 14 15 321 8,493

Hillsborough 19,936 12,599 86,607 1,987 7,471 1,546 1,523 131,669

Pasco 2,857 3,163 14,813 373 325 133 513 22,176

Pinellas 903 6,440 51,280 51,769 1,221 785 945 113,343

Total 230,946 164,408 1,027,319 79,797 46,675 20,327 39,667 1,609,139

Source: IMPLAN Professional data for Florida (MIG, Inc, 200 9 ).

Impact estimates include regional multiplier effects . Employment includes fulltime and part

- time positions.

# Attachment B1 

### Economic Impacts and Compliance Costs of Proposed EPA Numeric

Nutrient Criteria for Florida Agriculture

Richard Budell, Terry Pride, Holly Stone, and James Clements

Florida Department of Agriculture and Consumer Services, Office of Agricultural Water Policy

Alan W. Hodges, Thomas J. Stevens, Mohammad Rahmani, and Tatiana Borisova

University of Florida/IFAS, Food & Resource Economics Department

Del Bottcher

Soil and Water Engineering Technology, Inc.

April 22, 2010

Abstract

This document provides a projection of costs and total economic impacts for Florida agricultural

producers to attempt to meet the U. S. Environmental Protection Agency’s proposed numeric

nutrient criteria through the implementation of typical Best Management Practices (BMPs) and

additional on-farm storm water treatment and retention practices.

Because the agricultural implementation of the proposed criteria has not been described in the EPA

proposal, there is uncertainty in estimating the final compliance costs. For this reason, the

assessment is presented as a range of compliance costs. Throughout the state and among all

agricultural sectors, these costs will vary and may require expenditures in excess of those estimated,

depending on the implementation requirements. Furthermore, implementation of all described

applicable practices will not necessarily lead to a ttainment of the EPA-proposed nutrient criteria.

The total initial and recurring costs for Florida agriculture (including planted tree farms) to implement

all applicable practices necessary to attempt to m eet the EPA-proposed numeric nutrient criteria will

vary depending on the amount of land involved and the types of practices required. In addition to

typical BMPs such as nutrient management, irri gation management, fencing and rotational grazing,

the authors conclude that more extensive additional; practices including the construction of on-farm

water treatment/retention facilities will be necessary for all sectors of Florida agriculture. It is

estimated that the total initial costs for Florida agriculture to implement all applicable practices will

range from $855 million to $3.069 billion. The total recurring (annual) costs, which include the

amortized initial capital costs, are estimated to range from $271 to $974 million. Lost revenues

associated with land taken out of production to implement on-farm water treatment/retention

practices are estimated to be $631 million annually. Thus, total recurring expenditures and revenue

reductions for agriculture are estimated to range from $902 million to $1.605 billion annually.2 Beyond the direct impact on the agricultural sector , Florida’s economy as a whole will be affected

significantly by these lost agricultural revenues. The total output impacts resulting from the $631

million in lost agricultural revenues and the secondary ripple effects on suppliers and employee

spending are estimated to equal

- $1.148 billion annually. The value-added impacts of these lost

agricultural revenues are estimated to equal -$682 million per year. Annual impacts to Florida’s

labor income are estimated to be

- $326 million, and the estimated loss of full-time, part-time, and

seasonal jobs is -14,545.

Introduction

The numeric nutrient criteria for Florida water bodies recently proposed by the U. S. Environmental

Protection Agency (EPA) would establish acceptable nutrient concentrations in surface waters at

extremely low levels. This has created a great deal of controversy among stakeholders throughout

the state, including local governments, utilities, bu sinesses, agricultural producers, and others who

are concerned that compliance with the proposed criteria may be impossible to achieve and may

cause significant economic damages. Agricultural interests are particularly concerned that

enforcement of these criteria would threaten the viability of agriculture in the state. The collective

stakeholder concern is further escalated by the uncertainty and lack of transparency of the scientific

basis from which the proposed numeric nutrient criteria were derived.

In its preliminary estimate of potential compliance costs, EPA estimated the annual costs for

implementation of agricultural BMPs at $34.8 m illion ($27.9 million for nutrient management, $5.0

million for forest buffers, and $1.9 million for livestock fencing 1 ). Initial capital costs for these BMPs

were estimated at $112.9 million. EPA’s cost estimates were generated using the assumption that

the Florida Department of Environmental Protection (FDEP) draft numeric nutrient criteria would

already be in place as part of Florida’s water quality standards, that actions would have been taken

and paid for to meet those criteria, and that EPA’s proposed criteria would have only an

“incremental” impact. However, no such cr iteria have even been proposed for adoption by the

FDEP. EPA‘s assumption results in an estimate that only 45% of Florida’s agricultural lands (6.13

million acres) would be affected by its proposed cr iteria. This document was developed to provide a

more realistic projection of compliance costs and total economic impacts for Florida agricultural

producers to attempt to meet the proposed criteria, based on the fact that Florida has not yet

adopted numeric nutrient criteria and the authors related conclusion that the EPA-proposed criteria,

if adopted, will affect 13.6 million acres of agr icultural land rather than the EPA-estimated 6.13

million acres.

1 U.S. EPA, Office of Water, Office of Science and Technology, “Preliminary Estimate of Potential Compliance Costs and

Benefits Associated with EPA’s Proposed Numeric Nutrient Criteria for Florida”. January, 2010.3 Costs of BMP & Water Treatment/Retention Implementation for Compliance

A range of estimated BMP and on-farm water treatment/retention costs for various agricultural land

uses are presented in Tables 1a, 1b, and 1c. Table 1a represents the low end of the compliance

cost estimates, and was created using net (harvested) agricultural acres and estimated costs per

acre of typical BMPs. Typical BMPs are practices that would only be applied to harvested acres as

defined in the Census of Agriculture. Table 1b represents the incremental costs of additional onfarm water treatment/retention facilities that would be applied not only to harvested acreage, but to

the gross farm area. Based on modeled reduction es timates for typical BMPs, it is assumed that

these additional treatment/retention facilities will be required to attempt to achieve EPA-proposed

nutrient criteria. Table 1c includes both typical BMP and water treatment/retention costs added

together, and represents the high end of the estimated cost of compliance.

The net and gross area (acres) of land used in Florida for each agricultural industry or commodity

that would be subject to the new standards was ta ken from the 2007 Census of Agriculture (USDANASS, 2009) and the Forest Inventory and Analysis (U SDA-Forest Service). While the agricultural

sectors shown in Tables 1a, 1b, and 1c were classified according to the North American Industry

Classification System (NAICS), some sectors represent an amalgamation of several different

commodities; for example, row crops includes oilseeds, grains, vegetables and melons, tobacco,

cotton, peanuts, strawberries, and other crops. The net area of specified agricultural land uses in

Florida for 2007 was 11.63 million acres, including 4.85 million acres for tree plantations, 4.55 million

acres for improved/unimproved pasture for beef cattle, 665,000 acres for citrus, 379,000 acres for

sugarcane, and 331,000 acres for row crops. Gross farm area of specified agricultural land uses in

2007 was 13.60 million acres. Note that the silviculture acreage in tables 1a and 1b includes only

managed (planted) acres.

The estimated per-acre costs for agricultural producers to implement the required BMPs were taken

from a report prepared for the South Florida Wate r Management District by Soil & Water Engineering

Technology, Inc. (SWET, 2008). The cost estimates in the SWET report are based, in part, on

actual expenditures by the Florida Department of Ag riculture and Consumer Services for agricultural

BMP implementation and cost-share programs during the eight-year period prior to the report.

Subsequently, the cost estimates in the report formed the basis of annual budget requests to the

Florida Legislature to fund the agricultural component of the Northern Everglades and Estuaries

Protection Program.

The initial and annual operating costs per acre for each agricultural sector or land use are itemized in

Tables 1a and 1b. BMPs covered in this analysis included the full range of typical owner-4 implemented practices, such as ferti lizer management, grazing management, and livestock

exclusion from waterways. Additional on-farm water treatment/retention practices include wetland

restoration, water recovery/re-use systems, and on- site water treatment/retention systems. Initial

(capital) costs for implementation of all practices include materials, labor, and engineering. Annual

operating costs were estimated at 20 percent of the initial costs, consistent with good engineering

practice, plus amortization of the capital investment at 10 percent interest over 20 years.

Initial costs per acre for typical BMPs range from $22 for Tree Plantations to $1,045 for Dairy farms,

while annual costs per acre range from $8 to $332 (Table 1a). Initial costs per acre for additional onfarm treatment/retention range from $73 for Beef Cattle Ranching, to $750 for Dairy farms, while

annual per-acre costs for additional practices range from $23 to $238 (Table 1b).

The estimated statewide total initial and annual co sts to comply with the proposed EPA numeric

nutrient criteria were calculated simply by multiplying the average cost per acre against the

appropriate total acreage for each agricultural sector in the state (Tables 1a & 1b). The combined

total costs were calculated by simple addition (Table 1c). Total initial costs for the implementation of

typical BMPs were highest in the Citrus, Dairy, and Beef sectors, at $326, $130 and $115 million

respectively. The largest total annual costs for typical BMPs occurred in the same three sectors, at

$104, $41, and $36 million per year, respectively (Tabl e 1a). Row crops, Silviculture, and Citrus are

estimated to incur the largest initial costs in implementing additional on-farm water

treatment/retention practices, at $681, $534, and $337 million respectively. The same three sectors

are also projected to incur the largest recurring annual costs for implementing these practices, at

$216, $169, and$107 million per year, respectively (Table 1b).

Both modeling (Watershed assessment Model, SWET) and empirical water quality data (STORET,

FDEP) indicate that all applicable typical BMPs and additional on-farm water treatment/retention

practices would be required to attempt to meet the EPA-proposed numeric nutrient criteria. For this

reason, the combined estimated costs shown in Table 1c reflect the best estimate of the costs of

implementation to attempt to comply with EPA-proposed criteria. The total initial cost for

implementing both typical BMPs and water treatment/ret ention practices for all agricultural sectors in

Florida is estimated to be $3.069 billion (Table 1c). The individual agricultural sectors expected to

experience the greatest initial total costs for implementing all applicable practices are Row Crops,

Citrus, and Silviculture, at $754, $663, and $641 million respectively. Recurring annual costs for the

operation, maintenance, and debt service for all applicable practices over all agricultural sectors are

estimated to total $974 million (Table 1c). Among the different agricultural sectors, total annual

costs for all applicable practices combined were greatest for the same three sectors (Row Crops,

Citrus, Tree Plantations), at $239, $211, and $203 million per year, respectively.5 Table 1a. Estimated Costs of Typical BMPs for Florida’s Agricultural Producers to Comply with EPA

‐ proposed Numeric Nutrient Criteria

Agricultural Sector by North American

Industry Classification Net Area

Used or

Harvested,

2007 (acres) Typical BMP Costs

per Acre Typical BMP Total

Costs

Initial

($) Annual

($) Initial

(million $) Annual

(million $)

Row crops (1111, 11121, 11191, 111192, 111333) 330,582 220.0 69.8 72.7 23.1

Citrus (11131, 11132) 664,847 490.0 155.6 325.8 103.5

Ornamentals (1114) (net of sod and food crops

under cover) 67,359 220.0 69.8 14.8 4.7

Sod production 84,430 110.0 34.9 9.3 2.9

Sugarcane farming (11193) 378,587 110.8 35.2 41.9 13.3

Hay farming (11194) 297,578 58.0 18.4 17.3 5.5

Non-citrus fruit and berry farming (11133) 17,242 490.0 155.6 8.4 2.7

Beef cattle ranching and farming (11211) 4,549,384 25.3 8.0 115.1 36.4

Dairy cattle and milk production (11212) 124,128 1,045.0 331.7 129.7 41.2

Horse and other equine production (11292 ) 202,176 49.5 15.7 10.0 3.2

Poultry and egg production (1123) 58,078 58.0 18.4 3.4 1.1

Silviculture tree plantations (1131) (net of

woodland pastures) 4,852,527 22.0 7.0 106.8 34.0

Total for All Agricultural Uses 11,626,918 855.2 271.6

Table 1b. Estimated Costs of Additional On-Farm Water Treatment/Retention for Florida Agricultural

Producers to Comply with EPA- proposed Numeric Nutrient Criteria

Agricultural Sector by North American

Industry Classification Gross Farm

Area

2007 (acres) Treatment/Retention

Costs per Acre Treatment/Retention

Total Costs

Initial

($) Annual

($) Initial

(million $) Annual

(million $)

Row crops (1111, 11121, 11191, 111192, 111333) 1,548,413 440.0 139.7 681.3 216.3

Citrus (11131, 11132) 1,394,373 242.0 76.8 337.4 107.1

Ornamentals (1114) (net of sod and food crops

under cover) 67,359 440.0 139.7 29.6 9.4

Sod production 84,430 330.0 104.8 27.9 8.8

Sugarcane farming (11193) 378,587 275.0 87.3 104.1 33.1

Hay farming (11194) 297,578 110.0 34.9 32.7 10.4

Non-citrus fruit and berry farming (11133) 47,861 242.0 76.8 11.6 3.7

Beef cattle ranching and farming (11211) 4,549,384 73.3 23.3 333.6 105.9

Dairy cattle and milk production (11212) 124,128 750.0 238.1 93.1 29.6

Horse and other equine production (11292 ) 202,176 110.0 34.9 22.2 7.1

Poultry and egg production (1123) 58,078 110.0 34.9 6.4 2.0

Silviculture tree plantations (1131) (net of

woodland pastures) 4,852,527 110.0 34.9 533.8 169.5

Total for All Agricultural Uses 13,604,894 2,213.7 702.9

Notes: Annual costs represent amortized initia l capital costs at 10% interest over tw enty-years, plus operation and maintenance at

20% of capital costs. Costs for beef cattle calculated as average for improved pasture, unimp roved pasture and woodland pasture . No

cost values available for non-citrus fruits and berries; citrus values us ed to calculate cost because of similarity in manageme nt.

Sources : Agricultural acreage: USDA-NASS, 2007 Census of Agriculture, Florida , Vol. 1, Geographic Area Series, Part 9, State and

County data, Tables 8, 37, 46. Forest acreage: USDA-Forest Service, Forest Inventory and Analysis . Data for Florida, 2007, available

at http:// fiatools.fs.fed.us/fido/standardreport.html. All Costs: Soil & Water Engineering Tec hnologies, Inc. (SWET), 2008. Nutrient

Loading Rates, Reduction Factors and Implementati on Costs Associated with BMPs and Technologies , Appendix A, tables for

phosphorous and nitrogen reduction BMPs.6 Table 1c. Estimated Combined Costs of Typical BMPs and Additional On-Farm Water

Treatment/Retention for Florida Agricultural Producers to Comply with EPA-proposed Numeric

Nutrient Criteria

Agricultural Sector by North American Industry

Classification Combined

Total Costs

Initial

(million $) Annual

(million $)

Row crops (1111, 11121, 11191, 111192, 111333) 754.0 239.4

Citrus (11131, 11132) 663.2 210.6

Ornamentals (1114) (net of sod and food crops under cover) 44.4 14.1

Sod production 37.2 11.7

Sugarcane farming (11193) 146.0 46.4

Hay farming (11194) 50.0 15.9

Non-citrus fruit and berry farming (11133) 20.0 6.4

Beef cattle ranching and farming (11211) 448.7 142.3

Dairy cattle and milk production (11212) 222.8 70.8

Horse and other equine production (11292 ) 32.2 10.3

Poultry and egg production (1123) 9.8 3.1

Silviculture tree plantations (1131) (net of woodland pastures) 640.6 203.5

Total for All Agricultural Uses 3,069.0 974.5

Notes: Annual costs represent amortized initia l capital costs at 10% interest over tw enty-years, plus operation and maintenance at

20% of capital costs. Costs for beef cattle calculated as average for improved pasture, unimp roved pasture and woodland pasture . No

cost values available for BMPs on non-citrus fruits and berries; citrus va lues used to calculate cost because of similarity in

management. No cost values available for poultry operations; hay farming values used to calculate cost because of land applica tion

use

Sources : Agricultural acreage: USDA-NASS, 2007 Census of Agriculture, Florida , Vol. 1, Geographic Area Series, Part 9, State and

County data, Tables 8, 37, 46. Forest acreage: USDA-Forest Service, Forest Inventory and Analysis . Data for Florida, 2007, available

at http:// fiatools.fs.fed.us/fido/standardreport.html. All Costs: Soil & Water Engineering Tec hnologies, Inc. (SWET), 2008. Nutrient

Loading Rates, Reduction Factors and Implementati on Costs Associated with BMPs and Technologies , Appendix A, tables for

phosphorous and nitrogen reduction BMPs.

Regional Economic Impacts of Production Land Displacement

For Florida agricultural producers to attempt to comply with the EPA-proposed numeric nutrient

criteria, it is anticipated that a significant amount of agricultural land will be displaced from production

due to implementation of on-farm water treatment/r etention systems. According to estimates

provided by Florida agricultural engineer Del Bottc her, approximately 10 percent of the agricultural

land affected by the EPA-proposed criteria will be needed to construct on-farm water treatment/

retention systems (personal communication). This will lead to a recurring reduction in agricultural

industry output (revenues).

It is expected that agricultural producers will strive to locate on-farm treatment/retention systems on

marginal or non-productive lands to the extent possible, such that overall production volume and

value would decrease by less than 10 percent. Economic research has documented that farmers

respond to reductions in their production acreage through a variety of adaptive strategies, including

intensification of production on the remaining land base, and shifting cultivation to less marginal7 land 2 . The effective reduction in production volume is typically 60 to 80 percent of the acreage

reduction. For this analysis, we chose a mid-range value of 70 percent, meaning that for a 10-

percent reduction in production acreage, production volume would fall by 7 percent.

Total industry output (revenue) for agricultural sectors in Florida was about $9.02 billion in 2008

(latest data available, Table 2). Therefore, if the projected 7-percent decrease in annual output due

to land displacement occurred uniformly across all agricultural sectors, the total annual revenue loss

would be $631 million (Table 2). The largest changes in direct output would occur for Vegetable and

Melon Farming ($152 million), Greenhouse and Nurseries ($135 million), and Fruit Farming ($138

million). Note that this analysis includes some additional agricultural sectors/commodities beyond

those evaluated in Tables 1a, 1b, and 1c.

Exhibit 6-1 in the January 2010 Economic Analysis report by EPA indicated that the total area of

agricultural and forest lands in Florida surrounding water bodies incrementally affected by their

proposed numeric nutrient criteria is 6.13 million acres (Figure 1) 3 . This contrasts with a total of 13.6

million acres estimated by the USDA to be used for agricultural and planted forestry activities in

Florida. Thus, by EPA estimates, only around 45 percent of Florida’s agricultural lands will be

affected by EPA-mandated numeric nutrient criteria (though this percentage varies across different

agriculture sectors).

The authors contend that, rather than 6.13 million agricultural acres being affected by the EPAproposed numeric nutrient criteria, a more realistic estimate of affected acres, based on modeling

and water quality data, is 13.6 million acres. EPA assumed that Florida had adopted into its water

quality standards draft numeric nutrient criteria being developed by FDEP and that agriculture is

already in compliance with these FDEP draft criteria. However, no such criteria have been proposed

or adopted into Florida law, and virtually all agricultural acreage statewide will be subject to

implementation of typical BMPs and additional on-farm water treatment/retention practices to attempt

to comply with EPA’s proposed criteria. Consequently, the analysis that follows uses the latter

estimate of affected agricultural acres to derive a high-end estimate of economic impact and uses

the EPA-estimated acreage to derive a low-end estima te of economic impact. The analysis includes

direct and indirect impacts to agriculture and related industries.

2 For example, see paper by Erickson, M.H. and K. Collins, Effectiveness of acreage reduction programs. USDA

‐ Economic

Research Service, AER

‐ 530, Agricultural

‐ Food Policy Review

, July 1985, pp. 166

‐ 84.

3 Incrementally impaired waters represent those water bodies that would not meet the new water quality standard

above and beyond the baseline standard. This differs from the basis used in estimating compliance costs in Tables 1a,

1b, and 1c.8 Figure 1. Incrementally Impaired Waters and Point Sources with Potential to Discharge Nutrients

(Exhibit 6-2. EPA Jan. 2010)

The total regional economic impacts of reduced output by Florida agriculture were estimated using

the Impact Analysis for Planning (IMPLAN) input-output software, and 2008 state dataset for Florida

(Minnesota Implan Group, Inc., 2009). Input-output analysis is a well-established methodology for

estimating the economy-wide effects of changes in indu stry activity arising from associated changes

in business supply chain purchases of inputs and employee household spending, known as the

indirect and induced multiplier effects, respectively. 4

As shown in Tables 3 and 4, the high-end economic impact scenario results in a direct loss of annual

industry output of $631 million, which leads to a total output impact of

- $1.148 billion, including the

indirect (supply chain) and induced (employee spending) effects. The direct loss of employment to

the agricultural sectors is estimated at 7,780 full-time and part-time jobs, and total employment

losses to the Florida economy are estimated at 14,545 jobs. Total value-added impacts to the state

are estimated at

- $682 million, including

- $327 million in impacts on labor income (wages, salaries,

4 Miller, R.E. and P.D. Blair, Input

‐ Output Analysis: Foundations and Extensions

, 2 nd Edition, Cambridge Press, 750 pages,

2009.9 benefits, proprietor income), and

- $317 million in impacts on property income (rents, dividends,

interest, etc.). Impacts on indirect business taxes paid to local and state governments were

estimated at

- $38 million, including taxes on property and sales, as well as other minor taxes,

licenses and fees.

While total economic impacts of BMP implementati on would be greatest in the agricultural sector,

significant impacts would also occur in other indu stries due to the indirect/induced multiplier effects,

as shown in Table 4. Other industries projected to incur significant employment impacts include

Retail Trade (

- 608 jobs), Health and Social Services (

- 578 jobs), Government (

- 538 jobs), and

Accommodation and Food Services (

- 333 jobs).

Table 2. Current Industry Output in Florida Agricu ltural Sectors and Projected Reduction in Output

due to Implementation of On-farm Water Treatment/Retention for Compliance with EPA–proposed

Numeric Nutrient Criteria

Agricultural Sector Output

(Revenue)

in 2008

(million $) 1 Projected

Revenue

Losses from a

7 % reduction

on 13.6 million

acres (million $) Projected

Revenue

Losses from a

7 % reduction

on 6.1 million

acres (million $)

Oilseed farming 7.5 -0.53 -0.4

Grain farming 20.1 -1.41 -1.2

Vegetable and melon farming 2,164.3 -151.50 -124.0

Fruit farming 1,972.0 -138.04 -49.7

Tree nut farming 8.6 -0.60 -0.2

Greenhouse, nursery, & floriculture 1,930.2 -135.12 -85.0

Tobacco farming 4.0 -0.28 -0.2

Cotton farming 42.1 -2.95 -2.4

Sugarcane & sugar beet farming 442.2 -30.95 -25.3

All other crop farming 322.6 -22.58 -24.2

Cattle ranching and farming 404.0 -28.28 -9.9

Dairy cattle and milk production 463.8 -32.46 -1.6

Poultry and egg production 403.0 -28.21 -2.5

Animal production except cattle & poultry 174.8 -12.24 -1.1

Forestry, forest products & timber tracts 658.5 -46.10 -22.4

Total All Sectors 9,017.8 -631.24 -350.3

Source : IMPLAN Professional software, and Florida regional data. Minnesot a Implan Group, Inc., Stillwater, MN, 2009.10 Table 3. Summary of Annual Economic Impacts in Flor ida from Change in Agricultural Industry Output

due to Implementation of On-farm Water Treatm ent/Retention for Compliance with EPA-proposed

Numeric Nutrient Criteria on 13.6 Million acres (2008 dollars)

Impact Type Employment

(fulltime &

part-time

jobs) Labor

Income

(million $) Value

Added

(million $) Output

(million $)

Direct Effect -7,780 -121.1 -370.1 -631.2

Indirect Effect -2, 967 -65.4 -82.6 -145.9

Induced Effect -3,798 -140.0 -229.1 -371.3

Total -14,545 -326.5 -681.8 -1,148.4

Source : IMPLAN Professional software and Florida regional data. Minnes ota Implan Group, Inc., Stillwater, MN, 2009.

Table 4. Total Economic Impacts in Florida, by Major Industry Group, of Change in Agricultural

Industry Output due to Implementation of On-farm Water Treatment/Retention for Compliance with

EPA-proposed Numeric Nutrient Criteria on 13.6 million acres (2008 dollars)

Industry Group Employment

(fulltime &

part-time

jobs) Output

(million $) Value

Added

(million $) Labor

Income

(million $) Other

Property

Type

Income

(million $) Indirect

Business

Taxes

(million $)

Agriculture, Forestry, Fisheries - 10,147 -685.0 -402.9 -160.5 -229.0 -13.4

Mining -7 -2.5 -0.5 -0.2 -0.3 0.0

Utilities -24 -13.4 -9.4 -2.8 -5.2 -1.5

Construction -244 -26.6 -10.6 -9.6 -0.9 -0.1

Manufacturing -103 -42.1 -9.2 -5.5 -3.3 -0.5

Wholesale Trade -194 -30.3 -19.7 -11.4 -4.1 -4.2

Retail Trade -608 -35.8 -24.4 -14.9 -4.2 -5.3

Transportation & Warehousing -163 -15.3 -8.3 -5.8 -2.2 -0.4

Information -53 -14.5 -5.8 -3.4 -1.9 -0.5

Finance & Insurance -243 -42.5 -23.0 -12.8 -9.3 -1.0

Real Estate & Rental -278 -72.7 -51.4 -5.9 -37.6 -7.9

Professional & Tech. Services -286 -29.8 -18.0 -14.9 -2.6 -0.4

Management of Companies -24 -4.3 -2.6 -2.0 -0.6 0.0

Administrative & Waste Services -241 -11.8 -7.3 -5.7 -1.4 -0.2

Educational Services -89 -4.4 -2.6 -2.4 -0.2 0.0

Health & Social Services -578 -43.6 -27.3 -23.3 -3.7 -0.4

Arts- Entertainment & Recreation -83 -6.7 -3.6 -2.1 -1.0 -0.5

Accommodation & Food

Services -333 -17.8 -9.9 -6.5 -2.3 -1.1

Other Services -310 -15.3 -8.6 -6.2 -1.7 -0.7

Government & non-classified -538 -34.0 -36.6 -30.7 -5.9 0.0

Total All Industries -14,545 -1 ,148.4 -681.8 -326.5 -317.4 -38.0

Source : IMPLAN Professional software and Florida regional data. Minnes ota Implan Group, Inc., Stillwater, MN, 2009.11 The reductions in agricultural revenues under the low-end scenario, based on EPA estimates of

affected agricultural acres, are shown in Tables 2, 5, and 6. The projected decrease in annual

output on affected acreage due to land displacement to construct on-farm water treatment/retention

facilities would be about $350 million per year. The largest changes in direct output would occur for

Vegetable and Melon Farming ($124 million), Greenhouse and Nurseries ($85 million), and Fruit

Farming ($50 million) as shown in Table 2.

The direct loss of annual industry output of $350 million leads to a total output impact of

- $635

million, including the indirect (supply chain) and induced (employee spending) effects. The direct

loss of employment to the agricultural sectors is estimated at 3,546 full-time and part-time jobs, and

total employment losses to the Florida economy are estimated at 6,660 jobs (Table 5). Table 6

shows total value-added impacts for the state, which are estimated at

- $388 million, including

- $177

million in impacts on labor income (wages, salaries, benefits, proprietor income), and

- $190 million in

impacts on property income (rents, dividends, interest, etc.). Impacts on indirect business taxes paid

to local and state governments are estimated at

- $21 million, including taxes on property and sales

as well as other minor taxes, licenses and fees.

While total economic impacts would be greatest in t he agricultural sector, significant impacts would

also occur in other industries due to the indirect/induced multiplier effects, as shown in Table 6.

Other industries projected to incur significant employment impacts include Retail Trade (

- 284 jobs),

Health and Social Services (

- 269 jobs), Government (

- 252 jobs), and Accommodation and Food

Services (

- 155 jobs).

Table 5. Summary of Annual Economic Impacts in Flor ida from Change in Agricultural Industry Output

due to Implementation of On-farm Water Treatm ent/Retention for Compliance with EPA-proposed

Numeric Nutrient Criteria on 6.1 Million acres (2008 dollars)

.

Impact Type Employment

(fulltime &

part-time

jobs) Labor

Income

(million $) Value

Added

(million $) Output

(million $)

Direct Effect -3,546 -65.9 -217.1 -350.3

Indirect Effect -1, 342 -34.9 -45.8 -78.5

Induced Effect -1,771 -76.6 -125.2 -206.6

Total -6,660 -177.4 -388.1 -635.4

Source : IMPLAN Professional software and Florida regional data. Minnes ota Implan Group, Inc., Stillwater, MN, 2009.12 Table 6. Total Economic Impacts in Florida, by Major Industry Groups, of Change in Agricultural

Industry Output due to Implementation of On-farm Water Treatment/Retention for Compliance with

EPA-proposed Numeric Nutrient Criteria on 6.1 Million acres (2008 dollars)

Industry Group Employment

(fulltime &

part-time

jobs) Output

(million $) Value

Added

(million $) Labor

Income

(million $) Other

Property

Type

Income

(million $) Indirect

Business

Taxes

(million $)

Agriculture, Forestry, Fisheries -4,600 -377.3 -234.6 -86.5 -140.9 -7.2

Mining -3 -1.4 -0.3 -0.1 -0.2 0.0

Utilities -11 -7.0 -5.1 -1.5 -2.8 -0.8

Construction -116 -14.3 -5.9 -5.4 -0.5 -0.1

Manufacturing -48 -22.8 -5.0 -3.0 -1.8 -0.3

Wholesale Trade -88 -16.1 -10.5 -6.1 -2.2 -2.2

Retail Trade -284 -19.5 -13.3 -8.2 -2.3 -2.9

Transportation & Warehousing -74 -8.2 -4.4 -3.0 -1.2 -0.2

Information -25 -7.9 -3.1 -1.8 -1.1 -0.2

Finance & Insurance -113 -23.2 -12.6 -7.0 -5.0 -0.5

Real Estate & Rental -142 -40.8 -29.4 -3.5 -21.4 -4.5

Professional & Tech. Services -132 -16.6 -9.8 -8.1 -1.5 -0.2

Management of Companies -11 -2.4 -1.4 -1.1 -0.3 0.0

Administrative & Waste Services -113 -6.5 -4.0 -3.1 -0.8 -0.1

Educational Services -41 -2.5 -1.4 -1.3 -0.1 0.0

Health & Social Services -269 -23.8 -14.9 -12.7 -2.0 -0.2

Arts- Entertainment & Recreation -38 -3.7 -2.0 -1.1 -0.6 -0.3

Accommodation & Food Services -155 -10.0 -5.4 -3.6 -1.2 -0.6

Other Services -144 -8.6 -4.7 -3.4 -0.9 -0.4

Government & non-classified -252 -22.6 -20.1 -16.8 -3.2 0.0

Total All Industries -6,660 -635.4 -388.1 -177.4 -190.0 -20.8

Source : IMPLAN Professional software and Florida regional data. Minnes ota Implan Group, Inc., Stillwater, MN, 2009.

Summary

EPA’s analysis of economic impact to Florida agricult ure and related industries was incomplete, both

in terms of the estimated number of agricultural acres affected and the methods used to determine

economic impact. Even using EPA’s estimates of affected acreage (6.13 million acres), our analysis,

excluding the direct implementation costs of all applicable practices, reveals that annual lost

revenues associated with land taken out of production to implement on-farm water

treatment/retention practices would be $350 million a year. A more realistic assessment, using

water quality modeling and monitoring data, shows that 13.6 million acres of agriculture will

experience direct costs. Rather than the $34.9 million total annual cost that EPA suggested, the

authors assert that a more justifiable estimate of direct costs is from $902 million to $1.605 billion

annually, with additional indirect economic impacts to the state of $1.148 billion annually.