Economic impact of agriculture in the Southern Albuquerque, New Mexico metropolitan area

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Economic Impact of Agriculture in the Southern Albuquerque, New Mexico Metropolitan Area
Research Report 785
Tyler Holmes and Rhonda Skaggs1
Agricultural Experiment Station • College of Agricultural, Consumer and Environmental Sciences
1Respectively, Former Graduate Research Assistant and Professor, Department of Agricultural Economics and Agricultural Business (MSC 3169, PO Box 30003, Las Cruces, NM 88003; 575-646-3215; rskaggs@nmsu.edu), New Mexico State University.
SUMMARY
The economic impact of agricultural production in the southern Albuquerque, NM, metropolitan area was es­timated using the IMpact Analysis for PLANning (IM­PLAN) model, with a geographic focus on Bernalillo and Valencia Counties. Hay and dairy production dom­inate agricultural economic activity in the two counties, while the formal economic contribution of high-value fruit and vegetable crop production is very low. Many of the small irrigated farms in the region are not engaged in commercial-scale or income-oriented agriculture and are not included in databases used for economic impact analysis. Relative to the larger regional economy, agri­cultural output and employment in the study region are small, although estimated multipliers indicate that increased agricultural production would positively con­tribute to overall economic activity.
INTRODUCTION
New Mexico’s Middle Rio Grande (MRG) is undergo­ing rapid urbanization, population increase, and eco­nomic growth. Traditional agricultural use of land and water in the region is facing competition from new us­ers of these resources. The growing urban area requires water, while housing for new residents and commercial development are removing land from crop production. An expanding road network requires land, and there are demands on the region’s water resources for environ­mental restoration and endangered species.
Like many rapidly growing urban areas in the west­ern United States, the MRG is an irrigated river valley, where the future of agricultural land is closely linked to the future of water resources (and vice versa). Approxi­mately 90% of water consumed in the arid regions of the western United States is used by irrigated agriculture (Western Water Policy Review Advisory Commission, 1998). Agricultural water users throughout the West are frequently confronted by demands for agricultural water use accountability by non-agricultural interests. Emerging concerns about water use accountability are also leading to increased monitoring, regulation, and scrutiny of agriculture’s traditional claim on scarce water resources. The future of traditional irrigated agriculture in rapidly urbanizing communities is thus quite tenuous at a time when interest in preserving local agriculture and local food production is growing.
Some South Valley MRG residents have become very vocal and active in their efforts to increase local food production, reduce their region’s dependence on import­ed food supplies, and preserve their agricultural heritage and traditions (Wang, 2007). Wang (2007) concluded that a segment of citizens of the MRG’s South Val­ley believe that agriculture is not a temporary land use activity but one that has both tangible and intangible values. They believe that agriculture not only serves as a source of income but also provides the region with envi­ronmental benefits, such as open space, oasis-like micro­climate effects, and wildlife habitat (including for locally important threatened and endangered species) (Wang, 2007). These residents believe that small-scale irrigated agriculture is an essential component of their culture and heritage, is the foundation of their identity as land-based people, results in health benefits, and is something to which they are deeply connected.
Many of the non-market values identified by Wang (2007) as being associated with local agriculture cannot be measured using traditional methods or data. Howev­er, states and counties routinely use input–output mod­els to assess the economic contributions of agricultural production and related industries by quantifying the value of output, employment, and multiplier impacts. The economic effects of increased or reduced agricul­tural production can be estimated and then compared with the impacts of other types of economic activity or industries. In arid areas where crop production is not possible without irrigation, the economic effects of water transfers out of agriculture to other uses can