Returns to the Jersey Fresh Promotional Program: The Impacts of Promotional Expenditures on Farm Cash Receipts in New Jersey

Abstract

In 1984, the Jersey Fresh program was implemented by the New Jersey Department of Agriculture and was the first state-funded marketing campaign for agricultural products produced in New Jersey. In an effort to spur demand for New Jersey farm products, this program was designed to increase consumer awareness of the state’s agricultural products as well as to encourage food retailers to promote Jersey Fresh products. With funding from the USDA’s Federal-State Marketing Improvement Program, the New Jersey Department of Agriculture commissioned this study to determine the impact of Jersey Fresh promotion on farmer cash receipts in New Jersey. The econometric analysis was focused on the fruit and vegetable sectors, the primary commodity areas expected to benefit most directly from Jersey Fresh promotion. Study results show that: • For every dollar spent on the Jersey Fresh Promotional Program through 2000, New Jersey’s agricultural fruit and vegetable sector revenues increased by $31.54 (2003 dollars). • The additional economic activity created in the agricultural industry also had impacts on other parts of the economy, namely agricultural suppliers and service providers. In fact, each dollar spent on Jersey Fresh promotion resulted in an additional $22.95 of sales in agricultural support industries and other related industries. • In total, each dollar spent on Jersey Fresh promotion resulted in $54.49 of increased economic output in the State. Adjusting all dollars to 2003 levels, this means that the $1.16 million spent on the Jersey Fresh program in 2000 increased fruit and vegetable cash receipts by $36.6 million and created an additional $26.6 million in economic activity within agricultural support industries. The total statewide economic impact of the Jersey Fresh program was therefore an estimated $63.2 million. The economic activity generated through Jersey Fresh promotion also impacts local, state, and federal taxes. An analysis of these tax impacts shows that New Jersey’s State and local tax revenues increased by $2.2 million in 2000 due to the increased economic activity attributable to Jersey Fresh promotion. Comparing this return to the 2000 program budget of $1.16 million, the Jersey Fresh program appears to be better than revenue-neutral.