Organic Apple Production in Washington State: An Input-Output Analysis

This paper provides an Input-Output (I/O) based economic impact analysis for organic apple production in Washington State. The intent is to compare the economic “ripple” effect of organic production with conventional production. The analysis is presented in two scenarios: first we compare the economic impact of organic versus conventional apple production for a l demand increase of one million US$ as measured in sales. The second analysis looks at the economic impact of organic and conventional apple production in terms of given unit of land (405 hectares of production). Both state-wide output (sales) and employment (jobs) impacts are estimated under each scenario. Results are presented in terms of direct, indirect, and induced economic impact. Organic apple production was more labor intensive than conventional production. While, the organic apple sector used less intermediate inputs per unit of output than conventional production it also produced higher returns to labor and capital. As a result, the indirect economic effect was lower for the organic sector than the conventional sector, but the induced economic effect was higher for organic. Given the organic price premium, the economic impact (direct, indirect and induced) was larger for organic apple production than conventional apple production.