The Common Market Feasibility Study - Agricultural Marketing Service

THE COMMON MARKET FEASIBILTY STUDYExecutive Summary17known as IMPLAN that captures the linkages in an economy. Combining both the direct and indirecteconomic impact of the Common Market yields a total additional economic impact of $264k in the firstyear of operations and grows to $2.7M by the end of the fifth year.Employment GenerationThe Common Market will generate jobs, both directly and indirectly in Philadelphia and the ninePennsylvania counties supplying the distribution center. According to employment projections in thebusiness plan, the Common Market will launch with 2.5 full-time equivalent (FTE) employees and growto employ 5 FTE employees by its fifth year of operations. The direct sales of agricultural product to theCommon Market will generate jobs in the nine rural Pennsylvania counties that are the primarysuppliers to the distribution center. Based on sales projections, the Common Market will create 2.0 FTEexternal jobs in its first year and job creation will grow to 20.53 FTE by the fifth year of operations.There is also an associated job multiplier resulting Common Market operations. The Penn StateCooperative Extension’s IMPLAN economic impact model for every Pennsylvania county quantified thisripple effect into an “employment multiplier,” similar to the “output multiplier” above. For the ninecounties expected to supply the Common Market, this employment multiplier ranged from 1.3 to 2.1,meaning that for each FTE job created, an additional 0.3 to 1.1 FTE jobs were generated.Combining the distribution center jobs, farm jobs and ripple effect jobs generated as a result of theCommon Market yields 5.9 total additional FTE jobs in the first year of operations and grows to 39.9 bythe end of the fifth year.State and Local Tax EffectThe Common Market’s primary effect on state and local taxes will be the Pennsylvania Personal IncomeTax and the Philadelphia Wage Tax of direct employees of the Distribution Center. Based onemployment projections in the business plan, the Common Market will generate $4,600 of additionaldirect tax revenue in its first year of operations, growing to $12,000 by its fifth year of operations. Thetax benefit of jobs potentially created by indirect and multiplying effects is more subjective.Quantitative Benefit to FarmersThe Common Market benefits farmers economically by giving them a venue to sell additionalproduction. The value of agriculture product sold by the Common Market is projected to start at $137kin its first year of operations and grow to $1.4M by the end of the fifth year of operations. This isequivalent to purchasing all the production of more than one median farm of the nine primary sourcecounties in its first year of operations. By its fifth year of operations, the Common Market will purchasethe equivalent of all the production of more than 12 farms.Non-Quantitative Benefits to FarmersThere exists numerous non-quantitiative potential benefits to farmers generated through the creationof the Common Market. A few are mentioned below and are expounded upon later in this study: