Exporting Processed Instead of Raw Agricultural Products

Gerald Schluter and William Edmondson

No 278254, Staff Reports from United States Department of Agriculture, Economic Research Service

Abstract: Exporting processed agricultural products rather than raw commodities benefits society much more than just the increased value of the commodities themselves. Processing adds to the value of the products and generates greater business activity, more jobs, higher personal income, and greater tax revenues. The issue of adding value to exports becomes even more relevant in view of the recently expanded use of subsidies to spur growth of raw grain and oilseed exports. Do such subsidies fully exploit the U.S. agricultural competitive advantage? Processing wheat worth $1 million would generate as much as $9 million in business activity, 109 full-time jobs, $1.9 million in personal income, $160,000 in Federal personal income taxes, and $199,000 in Federal corporate income taxes. Processing other commodities could yield even greater economic benefits. Trade barriers, foreign demand, and domestic capacity could prevent full realization of the potential economic benefits.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 21
Date: 1989-11
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerssr:278254

DOI: 10.22004/ag.econ.278254

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