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Historical Analysis of the Economic Contribution of the Everglades Research and Education Center (EREC)
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Permanent Link: http://ufdc.ufl.edu/IR00001939/00001
 Material Information
Title: Historical Analysis of the Economic Contribution of the Everglades Research and Education Center (EREC)
Physical Description: Fact Sheet
Creator: Evans, Edward A.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 2001
 Notes
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Published December 2001."
General Note: "FE 327"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00001939:00001

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PAGE 1

Historical Analysis of the Economic Contribution of the Everglades Research and Education Center (EREC)1 Edward A. Evans, Max R. Langham, and Leo C. Polopolus2 1. This is EDIS document FE 327, a publication of the Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. Published December 2001. Please visit the EDIS website at http://edis.ifas.ufl.edu. 2. Edward A. Evans, visiting assistant professor; Max R. Langham, professor emeritus; and Leo C. Polopolus, professor emeritus; Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. The Institute of Food and Agricultural Sciences is an equal opportunity/affirmative action employer authorized to provide research, educational information and other services only to individuals and institutions that function without regard to race, color, sex, age, handicap, or national origin. For information on obtaining other extension publications, contact your county Cooperative Extension Service office. Florida Cooperative Extension Service/Institute of Food and Agricultural Sciences/University of Florida/Christine Taylor Waddill, Dean. The Everglades Research and Education Center (EREC) is a University of Florida/Institute of Food and Agricultural Sciences (UF/IFAS) research and education center serving the needs of agricultural producers and consumers in South Florida. EREC is located at the southeast end of Lake Okeechobee, approximately 2.5 miles east of Belle Glade, and is the oldest and largest UF/IFAS research and education center in South Florida. It was established on June 14, 1921, under the provision of Chapter 8442, Laws of Florida, for the purpose of identifying the agricultural potential of the Everglades' organic soils. EREC is considered unique because it is the only academic agricultural research facility in the United States that is located on subtropical organic soils. Over the years, EREC has conducted various research projects leading to the generation and adoption of several improved technologies. These technologies have impacted the local farming communities of Glades, Hendry, Martin, and Palm Beach Counties and have spilled over to other parts of Florida and, indeed, the nation and world. As a consequence, legislators, farming communities, and public and private institutions have generally acknowledged the importance of EREC, even though a formal economic assessment of the social value of its research activities has not been undertaken. In May 2000, Dr. Van Waddill, then Center Director for EREC, requested that a historical economic evaluation of the Center's activities be conducted. A team of agricultural economists in the Department of Food and Resource Economics at the University of Florida undertook the study and completed their investigation in October 2001. Highlights of their study are reported here. Objectives of Study and Approach The main objective of the study was to conduct, from a historical perspective, a quantitative and qualitative assessment of the social and economic impact of the research conducted at EREC. The analyses revolved around an evaluation of the productivity of the agricultural sector of the four-county region (Glades, Hendry, Martin, and Palm Beach Counties) and how it is influenced by the research and extension activities of EREC (activities that impact the commodities and input markets, the environment, and the larger economic community). The study used both qualitative and econometric approaches to achieve its objectives.

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Historical Analysis of the Economic Contribution of the Everglades Research and Education.... 2 Research Findings and Policy Implications EREC has contributed to agriculture and agriculturally-related industries in south Florida The Center's contributions are evidenced through the number of significantly improved crop and livestock technologies generated over the years. Many of these have been manifested in increased profitability of farmers, expansion in cultivated areas, increased value and volume of outputs, and an abundant supply of cheap and safe food for consumers. Agriculture and agriculturally-related industries in the four counties of Glades, Hendry, Martin, and Palm Beach now contribute approximately seven billion dollars to Florida's Gross Domestic Product (GDP), with the value of farm produce accounting for more than 20 percent ($1.5 billion). In addition, such activities have generated over 120,000 full-time jobs. Quantifiable returns to research investments at EREC are greater than costs Our estimate, which we believe to be conservative, indicates that during the period 1950-97, the average annual rate of return on investments in EREC was 16 percent. To the extent that they are not measured in the market, this estimate ignores many of the benefits of research associated with improvements in the environment and natural resources, availability of cheaper and safer foods for consumer health and welfare, stability of agricultural prices, employment generation, secondary industries resulting from local agriculture, contributions to government revenues, the spillover of technologies to areas outside the study area, and EREC's on-site graduate student training and maintenance research to ensure that gains attributed to research-induced technologies are not eroded. EREC generates certain short-term impacts in the local farming community Short-term impacts have resulted from direct employment opportunities for local residents, employee income, state and local tax revenues, and indirect and induced economic activities of industries supplying EREC with research and development materials. Our analysis indicated that the total short-term impacts of EREC on the local community were estimated at $9.7 million. Of this amount, the total value added (direct) contribution to Florida's GDP was estimated at $6.5 million. The Center has also created a total of 206 full-time jobs. EREC's achievements have been realized without substantial increases in real research budgets Our investigation showed that, in constant dollars, the research budget increased from $1.3 million in 1950 to $2.8 million in 1997, or an annual growth rate of less than two percent. Our agricultural research intensity index (ARI), which relates the research budget of EREC to the value of agricultural commodities sold in the target area, showed that the ratio declined from about nine dollars per thousand-dollar value of output to about three dollars between 1950 and 1997, indicating a relative decrease in the cost of undertaking the research. During this same period, real spending per scientist increased from about $140,000 to $224,000. This increase was due, in part, to a corresponding decline in the number of full-time scientists from 18.1 FTE in 1969 to 12.7 FTE in 1997. There will be greater demands on the research system to increase competition among South Florida's producers while maintaining a healthful environment The current study reveals that the payoff to agricultural research and the investments made in EREC were worthwhile. Agricultural productivity gains brought about by improved technologies over the years have contributed, in no small measure, to the livelihood of the people in South Florida. Although it is tempting to take such gains for granted, there is as a great a need for the continued support of agricultural research as there was in the days of the early settlers. As globalization continues to increase the level of competition among producers, a greater demand will be placed on the research system to increase agricultural productivity while maintaining a healthful environment.

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Historical Analysis of the Economic Contribution of the Everglades Research and Education.... 3 References Evans, E.A., M.R. Langham, and C. Polopolus. 2001. "Historical Analysis of the Economic Contribution of the Everglades Research and Education Center (EREC)." Department of Food and Resource Economics, University of Florida, Gainesville, FL.