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Potential Economic Impacts of Zero Funding for Agricultural Research and Extension Programs Extend Far Beyond the University

The potential loss to Penn State's College of Agricultural Sciences of the $50.5 million in Land Scrip Funds would have a ripple effect far beyond the 1,108 positions lost directly.

The loss would lead to forfeiture of an additional $91 million of funds from other sources that the college would have received, including $22 million of USDA capacity funds, $56 million in competitive grant funding, and $13 million of county funds.

Analysis using the economic impact model IMPLAN, which is the most widely used economic impact tool, suggests that the impact of losing these operational funds would be an additional 768 to 957 jobs lost, for a total loss of between 1,912 and 2,028 jobs across the Commonwealth. Every Pennsylvania county would be affected by these losses. In addition, estimates of total income lost to Pennsylvania's economy range from $2 66 million to $284.1 million.

Potential Immediate Statewide Economic Impact from Layoffs and Downsizing in the College of Agricultural Sciences
Impact TypeJob LossesStatewide Loss of Economic Activity
Direct Effect 1,108 $141.5 million
Indirect Effect (in firms and organizations with which the College does business) 257-410 $46.7-$79.1 million
Induced Effect (in businesses due to loss of spending by laid off employees) 511-547 $72.5-77.8 million
Total Effect 1,912-2,028 $266-$284.1 million

These estimates focus solely on the loss of operational spending by the college; Pennsylvania would experience even greater economic losses with the cessation of the College's extension programming and research activity, which makes important contributions to the economic viability of agricultural and other sectors of the economy, and to quality of life in the Commonwealth.

These impacted programs and research include support for economic and community development, crisis response for human, animal, food, and environmental concerns, research and development of new technologies and practices to increase agricultural efficiency and productivity, comprehensive animal health diagnostic services, and research-based online information and publications used by farmers, local businesses, families, and others, including courses, newsletters, field guides, and fact sheets on a wide range of issues.

Prepared by: Timothy W. Kelsey, Ph.D, and Stephan J. Goetz, Ph.D.
March 3, 2016