Economic Impact

Economic Impact of the Florida Cultured Hard Clam Industry

A full copy of this report (as a PDF) is available at the University of Floridas, Food and Resource Economics Department's Economic Impact Analysis Program website under "Publications".

Summary

The hard clam culture industry has a history extending back over 20 years in Florida. Attempts to culture hard clams in Florida originated in the Indian River Lagoon during the late 1970s as a means to create an alternative supply source to fluctuating wild hard clam stocks. Techniques for producing seed clams had been developed during the 1950s; and the Harbor Branch Oceanographic Institution developed the early growout culture technologies during the 1980s.

The development of the hard clam culture industry on the Gulf coast of Florida began in the early 1990s, primarily through job retraining program efforts designed for displaced workers in the commercial fishing industry. The Job Training Partnership Act funded a demonstration and training program that initially provided potential growers with information on the production, market preparation, marketing and business aspects of clam culture. Subsequent programs trained additional growers. These projects have supplied the cultured clam industry with a firm foundation of technical support that has contributed to a steady growth in production and sales of Florida cultured clams.

Although the clam industry grew dramatically over the 1993-1999 period, the economic impact of the industry on the region or state had not been estimated. Not only does the clam industry contribute in terms of employment and sales of products, it produces a greater economic benefit to Florida because of the economic activity it generates among the firms that provide inputs to the clam culture firms. In addition, employees within the clam industry generate economic activity when they spend their income on housing, food and other goods and services. Thus, the economic benefits resulting from clam culture extends beyond the local culture area to the general Florida economy.

For the cultured hard clam industry to continue to thrive, it is essential that the water quality standards be high enough to allow clam production in current and future lease areas. Permitting and regulatory measures need to remain favorable for economically viable production of the clams. In addition, effective marketing efforts will allow for the industry to reach its full potential. Given the need for this support, it is essential that state and local decision-makers understand the value of Florida’s cultured clam sales to the state’s economy. This paper represents the first attempt to document the economic importance of the rapidly growing cultured hard clam industry in Florida. The specific purposes of this study were to:

	Document the movement of clams through the various marketing channels (processor, wholesale, retail, restaurant, and consumer), both in terms of the number of clams and in terms of dollar value of sales;
	Identify the major sources of and markets for cultured clams to the certified shellfish processors and wholesalers; and
	Estimate the broad economic impact to the regional and state economies

Data and Methods

A telephone survey was used to collect information from all Florida processors and certified shellfish wholesalers who handled Florida cultured hard clams within the state. Information solicited included source of product, destination of sales, and price by size of clam. The survey was administered on a regional basis. These data were summarized and an input-output (I-O) methodology was utilized to estimate the direct, indirect and induced economic impacts of the cultured clam industry in Florida. Input-output analysis is a technique that captures the regional economic interdependence between different industries, households and government institutions (Miller and Blair, 1985; Mulkey and Hodges). An underlying assumption of input-output analysis is that output or employment for a particular industry or region will generate predictable changes in other related sectors of the economy. These changes are measured by estimating the regional economic multipliers associated with the particular industry. A multiplier describes the economic activity that will be generated as a result of a change in final demand. The total multiplier takes into account the direct, indirect and induced impact of this change in final demand as money is spent and re-spent, i.e., “multiplied,” within the local economy. The input-output analysis was conducted using the IMPLAN PRO™ software package.

Findings

The Florida clam industry is spread out over a number of firms of varying sizes and there were a number of small firms, each with a relatively small market share, or percent sold by any one firm. In aggregate these firms sold approximately 143 million cultured clams in 1999. Northwest Florida (Region 1) handled the largest number of cultured clams (92.3 million). The eastern coast of Florida (Region 2) handled 33.2 million clams and the southwestern portion of the state (Region 3) handled 17.6 million. The firms obtained their clams from within their own region as well as from the other two regions in Florida. Most of them came from either personal leases (20 percent) or other growers (73 percent), with the remainder coming from other wholesalers.

The Florida cultured hard clam wholesale and processing industry had $21.8 million in sales in 1999. Around 43 percent of these sales were within the state and 57 percent were to locations out of state, including international destinations. Regardless of the geographic destination of the cultured clams sold by clam firms, the majority (78 percent) was sold to other wholesalers. About 14 percent were sold to restaurants, with the remaining 8 percent being sold to the retail buyers and consumers.

The total economic impact of the clam industry on Florida, after accounting for direct, indirect, and induced impacts, was $33.9 million in output, $9.0 million in labor income, and $12.1 million in value added. The total economic impacts were also calculated for each region. In Region 1 the clam industry generated a total of $24 million in output, $65 million in labor income, and $8.8 million in value added. In Region 2, the total economic impact of the clam industry was $5.5 million in output, $1.4 million in labor income, and $1.9 million in value added. In Region 3 the total economic impact was estimated to be $4.9 million in output, $1.4 million in labor income, and $1.8 million in value added.

The hard clam culture industry therefore represents a significant economic contribution to the economy of Florida and to the local economies where the production and marketing activities occur. Hard clam culture typically occurs in regions of Florida that are rural and economically undiversified. This analysis should provide useful information to those interested in monitoring the development of this new industry. Further growth in the hard clam culture industry will likely be linked to a host of local, regional and national factors, not the least of which will be the maintenance of local water quality conditions. The economic tradeoffs associated with coastal development, and its inherent impacts on water quality, warrants careful consideration as the wise use of Florida’s coastal marine resources in sought.

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