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New Mexico State University

New Mexico State University

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Study Breaks Down Economic Impact of New Mexico Agriculture

When a jar of salsa is produced in New Mexico using state- grown chile, money has been spent to pick the chile, label the jar and distribute the product. But just how much money and where it's spent has never been documented. The economic impact of individual sectors of the state's agricultural industry is the focus a new study by NMSU's Cooperative Extension service and Agricultural Experiment Station.


John Fowler, an agricultural economist, says previous research lumped all of the state's agricultural activities into one category. "With agriculture as just one element, you can't determine where income is being generated, whether it's pecans or chile, cattle or crops."

Some of Fowlerfs previous research has been as coordinator of the state's Range Improvement Task Force (RITF). When state and federal lawmakers recently began hearings to consider raising grazing fees, environmentalists across New Mexico claimed ranchers pay far below the fair market value for forage on private land. Ranchers countered that it's more expensive to operate on federal land and that private leases include additional services and facilities, which are not part of the federal fee. To help lawmakers resolve the situation, RITF was called in to provide objective, scientific data.

The task force was created in 1978 by the state legislature to provide data, research and quantifiable information in order to bring objectivity to these controversial issues.

"We spent a great deal of time working on individual allotment plans, which are on-the-ground plans for operating a ranch, including location, type of range improvements, grazing strategies and environmental concerns, 11 Fowler says. "We've worked with people on Indian pueblos, military reservations and traditional Hispanic ranches to better understand the customs and culture before we recommend alternative management actions and technologies."

The task force is analyzing the economic impact of federal land within each of the state's 33 counties.

"We're determining how each county differs in income generated by timber, mining, livestock grazing, recreation, watershed and wildlife," he says. "We want to analyze the economic activity in each county and determine whether the activity occurred on private, federal- or state-managed land, so our legislators can make decisions based on accurate information."

New Mexico has never before had the capability to do a comprehensive analysis, he says. "We now can analyze regions and the impact of policy changes. We'll identify the major crops that New Mexico has and look at the livestock economy to see whether, for example, cattle are range fed or from a feedlot."

The project will determine how many times a dollar generated from an agribusiness circulates through the state's economy, how much value is added to agricultural products and what sectors benefit through the sale of those products.

Fowler says he'll also identify land ownership from which agricultural income is derived -- whether it's deeded, state or federal. The results will be used in public policy forums and to help legislators make sound decisions that impact their communities.

"When you speculate about what will happen to a local economy if ownership changes from federal to private, if we have more state-owned land, or if we change all ownership to deeded property, we will be able to analyze potential impacts long before they are realized," he says. "We'll be able to provide our policy makers with some good, concrete information."

Fowler says U.S. Rep. Joe Skeen was the driving force behind the $192,000 Cooperative Extension Service grant for this project.