New Soybean Industries
Hello, I am just starting work on a project where I am looking at the contributions of the soybean industry in my region. I am going to do a MRIO with 5 major production regions to look at the relative contributions of the production and processing of soybeans. This part is straight forward, 1 Oilseed farming and 45 soybean and other oilseed processing sectors make up the industry in this part of the analysis. Recently, an edamame (vegetable soybean) processing facility opened in our area. The firm has contracted production of edamame on farms in the state. I was asked to include this in my analysis. So the edamame farms and processing plant represent two new industries that do not exist in the IMPLAN model. Production of vegetable soybeans is more like green bean production than traditional soybeans. The processing of edamame is greatly different than the oilseed processing sector too. I have the opportunity to work with the processing facility manager to collect primary data on both production and processing. Here's the question: could you give me advice on the best way to "create" these two new industries for vegetable soybeans production and processing? I've been looking into Analysis by Parts or just creating two new IMPLAN sectors. I have the luxury of being able to ask for whatever data I need to accomplish the task of estimating the economic impact of these two new sectors. Would you recommend ABP or creating new sectors? What would the data requirements be to accomplish both of these (in a nutshell)? I want to keep my list of questions at a minimum as this is a new business and I don't want to bog them down with lengthy surveys. I am at the beginning of the project so your advise is greatly appreciated and will be valuable to me as I draft up my set of questions for the processing facility manager.
Hi Nathan - the good news is that either creating a new sector as part of the study area data or doing analysis by parts (ABP) is that you end up with exactly the same results. The easiest way is to do an ABP. That way you are not trying to change production functions and messing with the byproducts. To do either, you need to create a production budget for the two different activities. You would want to get as much detail as possible for the processing facility on what goods and services they would purchase locally. They key is local purchases for each of your 5 regions. The bad news is that MRIO when you are adding sectors is problematic since there is no information about trade flows for your new industries therefore no feedback effects. You will want to do your MRIO manually so you will need to estimate the interactions for the first round of the MRIO. That is, what will the growers and processor buy from the other regions. You can likely ask them. Most of the MRIO impact occurs in the first round so you won't be missing much.
Scott asked me to check on this thread. Because you are using MRIO, I think it would actually be easier to either modify the closest industry to your edimame processing or to completely take over an unused industry sector and convert it to your new industry. If converting: 1) Customize > Study Area and choose an industry that currently is empty (all zeroes). You will want to choose a sector that is blank in all your regions so you can export the customized production function to the library from the first model and import it to all the others. Enter all the values, you can steal relationships from the closest manufacturing sectors if you don't get data for edimame mfg. 2) Customize > Industry Production - this is the production function. This is the hardest step. Note, it the data is more aggregated than the IMPLAN 440 sectors, you can distribute based on the closest manufacturing sector for the commodities that comprise your aggregate number. 3) Customize > Commodity Production - choose the product that most closely corresponds to edimame (eg, fresh vegetable or frozen vegetable) and zero out the products that this industry used to produce. Note, you will need to customize in the above order. Going back to step 1 will undo changes to steps 2 and 3.
Scott & Doug, Thanks as always for the fast response and advice. Two sectors that would be easy for me to "take over" would be tobacco production and tobacco manufacturing since neither exist in our state. However, I do not know if the edamame folks (farmers or manf.) will have the detail yet to develop a full production function, particularly the manf. side. A couple of follow up questions... Scenario 1 - I take over the two tobacco sectors, one for production of veg. soybeans and one for processing veg. soybeans. I know that the farming of veg. soybeans is going to be similar to sector 3 - vegetable and melon farming and that the closest manf. sector is likely to be close to 53 - Frozen food manufacturing. 1) So I gather information on edamame production and processing and edit the Study Area data for the two empty tobacco sectors. Output, wages, proprietor income, TVA...I should be able to get these. I enter the data, re-construct the model 2) Based on my assumptions in the above, I export the prod. functions for sectors 3 and 53, then in Customize Industry Production, I import the respective veg. farming and frozen food manf. sectors into the previously empty tobacco (now edamame) sectors. Re-construct model Now I have edamame output, income, va entered via the Study Area data edit and I have reasonable prod. functions for both sectors via the Industry Production import of the veg. manf. sectors that "match" 3) I customize Commodity Prod and set Vegetables as my commodity for the new Edamame production sector (rather than tobacco) then I set Frozen Foods as the commodity for my new Edamame manf. sector (rather than cigarettes and cigars). Re-construct model. Now I have a base model with my tobacco sectors now reflecting the new Edamame industry. I can then export, import these prod. function for my different regions in the MRIO and things should function accordingly, correct? Of course where I can edit the prod. functions I will, maybe I find the manf. is planning to say freeze half of the product and package the other half as fresh product. I can edit the commodity production to reflect this. I think this give me a fairly easy way to do this analysis without all of the detailed production function information to really "create" the industry. Any thoughts? Comments? Suggestions?
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