SELECTED TOPICS IN ALABAMA?S ENVIRONMENTAL HORTICULTURE INDUSTRY: THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY AND MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY Except where reference is made to the work of others, the work described in this thesis is my own or was done in collaboration with my advisory committee. This thesis does not include proprietary or classified information. ____________________ Moriah J. Bellenger Certificate of Approval: ____________________ ____________________ L. Conner Bailey Deacue Fields, Chair Professor Assistant Professor Agricultural Economics Agricultural Economics and Rural Sociology and Rural Sociology ____________________ ____________________ Diane Hite Keneth Tilt Assistant Professor Professor Agricultural Economics Horticulture and Rural Sociology ____________________ Stephen L. McFarland Dean Graduate School SELECTED TOPICS IN ALABAMA?S ENVIRONMENTAL HORTICULTURE INDUSTRY: THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY AND MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY Moriah J. Bellenger A Thesis Submitted to the Graduate Faculty of Auburn University in Partial Fulfillment of the Requirements for the Degree of Master of Science Auburn, Alabama August 8, 2005 iii SELECTED TOPICS IN ALABAMA?S ENVIRONMENTAL HORTICULTURE INDUSTRY: THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY AND MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY Moriah J. Bellenger Permission is granted to Auburn University to make copies of this thesis at its discretion, upon request of individuals or institutions and at their expense. The author reserves all publication rights. ____________________ Signature of Author ____________________ Date iv VITA Moriah Bellenger was born on December 23, 1980 and grew up in Tuscaloosa, Alabama. She graduated from Florida State University in 2003, with a Bachelor of Science in Economics and International Affairs. She plans to enter the doctorate program in Economics at Oregon State University in the fall of 2005. v THESIS ABSTRACT SELECTED TOPICS IN ALABAMA?S ENVIRONMENTAL HORTICULTURE INDUSTRY: THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY AND MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY Moriah J. Bellenger Master of Science, August 8, 2005 (B.S. Florida State University, 2003) 102 Typed Pages Directed by Deacue Fields III The environmental horticulture industry, known as the green industry, constitutes the states highest selling and fastest growing agricultural crop sector. The author, in collaboration with Deacue Fields and Kenneth tilt, conducted an extensive mail out survey of industry firms, which provided the data for this study. This thesis contains two separate papers, prepared for subsequent publication. The first paper uses an input-output model to estimate the industry?s total economic impact, which includes direct and indirect measures of output, value added, tax revenue, and employment. The second paper uses the seemingly unrelated regression model to examine the role of migrant workers in the vi industry?s labor force, by estimating their effects on average wage levels and worker productivity, as well as producer hiring decisions. vii ACKNOWLEDGEMENTS The author wishes to thank her major professor, Deacue Fields for his guidance and friendship throughout her course of study. Diane Hite provided critical assistance with the econometric models contained within. Ken Tilt and Conner Bailey helped to frame the key objectives. Special thanks also go to Ben Campbell for his patient help with necessary statistical software programming. Finally, the author would like to thank her parents, David and Kathy Bellenger, for their faith and encouragement in this effort. viii Style manual or journal used Journal of Agricultural and Applied Economics Computer software used Microsoft Word 2000, Excel 2000, Limdep version 7.0, and SAS version 9.1 ix TABLE OF CONTENTS LIST OF TABLES??.. xi CHAPTER 1 THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY??. 1 Introduction??...? 1 Data??...? 3 Revenues and Expenditures??..? 5 Employment??..? 10 Industry Concerns??.?? 15 Methodology??.? 16 Expansions?? 17 Impact Results??...? 21 Conclusion??.?? 24 Appendix A Survey Administration??..? 26 Appendix B Survey Findings?? 46 Appendix C Expansions?? 59 Appendix D Economic Impacts?? 63 References??........................... 67 CHAPTER 2 MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY??. 68 Introduction??... 68 x Background??..?. 69 Data??..?. 70 Methodology??.?? 75 Results??..?. 80 Conclusion??...? 3 Appendix A Green Industry Producer Surveys??.? 86 Appendix B Descriptive Statistics?? 96 Appendix C Estimation Results?? 99 References??. 101 xi LIST OF TABLES Table 1.1 Summary of Survey Administration??... 4 Table 1.2 Total Green Industry Economic Impacts, 2002??.. 24 Table 1B.1 Total Green Industry Sales and Expenditures of Survey Respondents, 2002??. 46 Table 1B.2 Nursery and Greenhouse Annual Sales, 2002?? 46 Table 1B.3 Nursery and Greenhouse Sales Market, 2002?? 47 Table 1B.4 Nursery and Greenhouse Annual Expenditures, 2002??...? 47 Table 1B.5 Turfgrass and Sod Annual Acreage, 2002??.? 48 Table 1B.6 Turfgrass and Sod Sales Market, 2002??.??. 48 Table 1B.7 Turf Grass and Sod Annual Expenditures, 2002?? 49 Table 1B.8 Lawn and Landscape Sales, 2002??..? 49 Table 1B.9 Lawn and Landscape Sales Market, 2002??. 50 Table 1B.10 Lawn and Landscape Annual Expenditures, 2002??.? 50 Table 1B.11 Retail Garden Center Annual Sales, 2002??..? 51 Table 1B.12 Retail Garden Center Annual Expenditures, 2002??. 5 2 Table 1B.13 Golf Course Annual Sales, 2002?? 53 Table 1B.14 Golf Course Annual Expenditures, 2002??...? 54 Table 1B.15 Commercial and Institutional Annual Expenditures, 2002?? 55 Table 1B.16 Green Industry Employment of Survey Respondents, 2002?..? 55 Table 1B.17 Nursery and Greenhouse Employment, 2002??. 56 Table 1B.18 Turfgrass and Sod Employment, 2002??...? 56 Table 1B.19 Lawn and Landscape Employment, 2002??..? 57 Table 1B.20 Golf Course Employment, 2002??..?.. 57 Table 1B.21 Retail Employment, 2002??...? 57 Table 1B.22 2002 Green Industry Concerns (Average Scores), 2002?? 58 Table 1C.1 Nursery and Greenhouse Income Expansion, 2002??.. .? 59 Table 1C.2 Nursery and Greenhouse Estimated Exports, 2002?? 60 Table 1C.3 Nursery and Greenhouse Cost Expansion, 2002?? 61 Table 1C.4 Turfgrass and Sod Income Expansion, 2002??..? Table 1C.5 Turfgrass and Sod Estimated Exports, 2002??.. 62 Table 1C.6 Turfgrass and Sod Cost Expansion, 2002??.. 2 Table 1C.7 Lawn and Landscape Income Expansions, 2002?? 62 Table 1D.1 Nursery and Greenhouse Economic Impacts, 2002??... 63 Table 1D.2 Turfgrass and Sod Economic Impacts, 2002??. 64 Table 1D.3 Lawn and Landscape Economic Impacts, 2002??. 65 Table 1D.4 Retail Economic Impacts, 2002??. 66 Table 2.1 Summary of Survey Administration??.. 7 2 xii Table 2B.1 List of Variables Included in the SUR Model? 96 Table 2B.2 Initial Survey Descriptive Statistics, 2002??. 97 Table 2B.3 Estimated Labor Sample Descriptive Statistics, 2002??... 9 8 Table 2C.1 Sample Selection Probit Results?? 99 Table 2C.2 Percent Migrant, 2002?? 99 Table 2C.3 Seasonal and Part Time Wages, 2002?? 100 Table 2C.4 Full Time Wages, 2002??.. 100 Table 2C.5 Sales Per Worker, 2002??.. 1 I. THE ECONOMIC IMPACT OF ALABAMA?S GREEN INDUSTRY Moriah Bellenger, Deacue Fields, and Kenneth Tilt Introduction The green industry, which comprises those who propagate, produce, sell, distribute, design, install and maintain nursery plants, represents the fastest growing segment of U.S. agriculture. In the U.S., nursery and greenhouse crops represent the third largest crop and rank seventh among all commodities in cash receipts. Green industry products and services make positive contributions to the attractiveness and value of homes, universities, government buildings, parks, resorts, golf courses, and other public and private establishments. Record low interest rates have fueled increased construction and strong growth rates for green industry purchases. By adding aesthetic quality, green industry services and products constitute an investment in property value for both the private and public sectors. Americans spent approximately $68.5 billion maintaining and improving their homes in 2002. In 2003, U.S. households spent an average of $503 on lawncare and landscaping (NASS, 2004). Despite recent economic insecurity and the increased competitive pressure of globalization, the continued growth of Alabama?s green industry provides one bright spot in the state?s economy. While Alabama?s total crops cash receipts declined from $673.1 million to $583.8 million for the period 1980-2002, green industry sales more than 2 doubled, from $142.7 million to $295.6 million. By 2002, the green industry comprised just over half of all crop sales, making it the state?s leading crop and third leading agricultural commodity. Greenhouse, nursery sales, and sod combined to $251.5 million, roughly 80% of horticultural crop sales. For the given period, all other horticultural crops actually declined, but the green house, sod, and nursery sectors? combined growth rate of over 350% enabled overall industry growth (Alabama Agricultural Statistics Service, 2004) The success of Alabama?s green industry is consistent with national industry statistics. From 1979 to 1998, total national industry sales grew from $3.2 billion to $10.6 billion, which equals a growth rate of 331 percent for the period. Interestingly, the total number of operations increased only slightly, from 22,347 to 23,758. This implies a growth in average sales per operation from approximately $143,000 in 1979 to $446,000 in 1998, or 312 percent. By 1997, Alabama ranked 16 th nationally for total nursery and greenhouse sales, and two of the state?s counties, Mobile and Baldwin, ranked among the country?s 100 highest selling counties. In 2002, the five top selling counties in Alabama comprised nearly 75% of green industry sales, and the adjoining Mobile-Baldwin region accounted for slightly less than 50% of green industry sales. Although cash receipts have been documented, this study represents the first estimation of the total impact of the green industry on Alabama?s economy. Total economic impact includes the direct effects of total sales and employees, the indirect effects of transactions between the green industry and other related industries within the state, and the induced effects of employee household consumption. 3 Data The data used in this study is drawn primarily from a 2002 survey of Alabama green industry producers (See Appendix A). The survey was administered based upon Dillman?s tailored design methodology (Dillman). Surveys requesting detailed revenue and expenditure information were used to improve existing state data quality and assess the validity of the production function information in IMPLAN. Mailing lists were acquired from the Alabama Department of Agriculture and Industries (ADAI) for nursery and greenhouse growers, nursery stock dealers, and licensed lawn and landscape service providers. Membership and mailing lists from the Alabama Nurserymen?s Association and Alabama Turfgrass Association were used to verify and update ADAI lists. The list of golf course superintendents was developed by merging membership directories from the Gulf Coast and Alabama Golf Course Superintendents Associations. A random sample of commercial and institutional firms was acquired from the American Business Directory through InfoUSA. Six survey instruments were customized to gather specific data from nursery and greenhouse producers, lawn and landscape service providers, turfgrass and sod producers, green industry retailers, golf course superintendents, and commercial and institutional consumers. The instruments were developed and pre-tested based upon other instruments found in relevant literature. Support paragraphs from the Commissioner of Agriculture Alabama Cooperative Extension System Director, Alabama Nurserymen?s Association President, and Alabama Turfgrass Association President were included on the inside cover of each survey. The Dillman format was used to develop a cover letter, which was personally addressed and included in each survey. 4 Table 1 presents information on mailing and response rates for each sector surveyed. A pre-survey postcard was mailed to the population of all sectors excluding commercial and institutional consumers. This was done as a first contact to prepare individuals for the upcoming survey and to identify incorrect addresses before surveys were mailed. More than 100 postcards were returned with incorrect addresses and these were excluded from the survey mail out. After the initial survey mailing, a follow up postcard was sent as a reminder/thank you, then a second survey was mailed. Table 1 shows that response rates ranged from 7.5% for commercial and institutional consumers to 39.3% for turfgrass and sod producers. Blank surveys and surveys with limited information were excluded from the number of completed responses. Some common responses on incomplete and/or blank surveys were ?no longer in business?, ?involved in other activities not related to the green industry?, and ?not considered a commercial operation.? Table 1. Summary of Survey Administration Sector Pre-survey Postcard Surveys Mailed Total Responses Completed Responses Response Rate Nursery and Greenhouse 851 822 158 114 19.2% Turfgrass and Sod 64 61 24 17 39.3% Lawn and Landscape Services 1,430 1403 243 190 17.3% Retail Sales 1,841 1,250 1 112 42 9.0% Golf Course Superintendents 174 170 38 25 22.4% Commercial and Institutional N/A 750 56 26 7.5% TOTAL 4,000 4,456 631 414 14.2% 1 1,250 Retail Sales firms were randomly sampled from a total of 1,829 valid addresses 5 The survey data is reported based upon the 414 respondents and is not expanded to make inferences about the entire population. The survey findings are reported in Appendix B. Revenues and Expenditures Table 1 of Appendix B provides the sales and expenditures of survey respondents in the various sectors of the green industry. Gross sales for all sectors were over $189 million and expenditures totaled $82.6 million. The total number of respondents represents less than 10% of the firms participating in green industry activities, which provides some indication of the overall size of the industry. Nursery and Greenhouse Annual Sales for the nursery and greenhouse sector are listed in Table 2. In the nursery and greenhouse sector 114 respondents indicated total sales of $70.8 million. Average gross income per firm totaled just over $620,000.00. Container-grown shrubs accounted for about 37 percent of all nursery and greenhouse sales followed by bedding plants with slightly more than 10 percent. Field grown trees comprised roughly 8 percent of total revenue. Table 3 outlines the nursery and greenhouse sales market for 2002. The leading consumer outlets for the surveyed nursery and greenhouse producers were sales to resale/wholesalers, other retail nursery and garden centers, and landscape contractors. The respondents sold roughly 25 percent of their products each to resale/wholesalers and retail nursery and garden centers, another 20 percent to landscape 6 contractors, and 12 percent to retail mass merchandisers. Nearly 10 percent of sales were made directly to the public, and municipalities comprised just fewer than 2 percent of the nursery and greenhouse sales market. Annual Expenditures for the nursery and greenhouse sector are listed in Table 4. The 114 respondents from the nursery and greenhouse sector accrued just under $26.3 million in 2002 expenses. Average expenditures per firm totaled just over $450,000.00. Overhead accounted for 25 percent of annual expenditures. Another 15 percent of annual expenditures lay in unspecified miscellaneous items. This is followed respectively by 11 percent and 10 percent in plants purchased from other growers and in propagation stock. Turfgrass and Sod Annual acreage and sales for the turfgrass and sod sector are summarized in Table 5. The eighteen respondents in the turfgrass and sod sector indicated sales of $12.9 million and an average of roughly $925,000.00 per firm. Growers listed 322 acres of certified product and just over 16,000 acres of non-certified product. Non-certified sod and non-certified centipede turf each accounted for nearly 40 percent of total acreage. This is followed by non-certified Bermuda turf, which made up another 13 percent of total acreage. The turfgrass and sod sales market is described in Table 6. Leading consumer outlets for turfgrass and sod producers are landscape contractors, sales directly to the public and retail nursery and garden centers, with respective market shares of 29 percent, 19 percent, and 13 percent. This is followed by landscape installation firms, resale/wholesalers, and other turf producers, each comprising roughly 10 percent. Golf 7 courses purchased 7 percent of turf and sod products, and municipalities purchased 2 percent. Table 7 lists the 2002 annual expenditures for the turfgrass and sod sector. The 18 respondents accrued just over $5.5 million in total expenditures, averaging nearly $400,000 in annual expenditures per firm. By far, the greatest cost facing turfgrass and sod growers lies in shipping and transportation, which accounted for 40 percent of total expenditures in 2002. This is followed by overhead and miscellaneous items, which made up another 15 percent and 10 percent of total costs, respectively. Lawn and Landscape Estimates for lawn and landscape sales are listed in Table 8. There were a total of 191 respondents in the lawn and landscape sectors. These respondents indicated total sales of $61.8 million and average gross income of just over $340,000.00. Landscape installation comprised the largest portion of this income, accounting for almost 25 percent of all sales. This is followed by landscape maintenance and lawncare maintenance, which combined for another 18 percent of total sales. Table 9 outlines the lawn and landscape sales market. More than half of all lawn and landscape services (56%) were provided to homeowners. 19 percent and 12 percent of services were to commercial establishments and builder/ developers, respectively. Other leading sales outlets include Apartments and condominiums with 9 percent. Government and Municipalities comprise just one percent of the lawn and landscape sales market. 8 2002 expenditures for the lawn and landscape sector are summarized in Table 10. The 191 respondents in the lawn and landscape sector listed $36.2 million in total expenditures, averaging roughly $190,000.00 in annual expenditures per firm. Materials accounted for nearly a third of all expenditures. This is followed by overhead, which comprised roughly 14 percent. Equipment purchases and leases, fuel, and fertilizers each made up around 10 percent of total expenditures. Retail Table 11 summarizes 2002 annual sales for the retail sector. The 43 respondents to the retail survey amassed gross sales of $15.8 million, with an average gross income of roughly $385,000.00 per firm. The highest selling retail and garden center items were container-grown shrubs and bedding plants, which each accounted for about 11 percent of sales. This is followed by unspecified miscellaneous products and turfgrass products, which represented more than 10 percent and 6 percent of sales. The 51 respondents in the consumer sectors (golf courses and commercial and institutional, indicated that they spent more than $18 million on green industry related goods and services.) 2002 annual expenditures for the retail sector are listed in Table 12. The 43 respondents from the retail sector indicated $11.3 million in total expenditures, averaging roughly $280,000 in annual expenditures per firm. The sector?s greatest expense lay in overhead costs, which accounted for around 15 percent of total expenditures. This is followed closely by purchases of shrubs at 13 percent. Hard goods and bedding plants each accounted for roughly 10 percent of annual expenditures. 9 Golf Course 2002 annual sales for the golf course sector are listed in Table 13. The 26 golf course respondents indicated $29 million in total sales, with average gross income reaching just over $1.3 million per firm. The respondents counted nearly 700,000 rounds for 18 holes and 20,000 rounds for 9 holes. This averages to roughly 30,000 and 10,000 rounds per firm respectively. Roughly $7 million or 25 % of total revenue was generated through membership and green fees. Another $4.5 million or 15 % of revenue came from golf cart rentals and lessons. The remaining $6.0 million or 21 % of revenue was generated through golf lessons, pro shops and refreshments. Estimates for annual golf course expenditures are listed in Table 14. This sector?s single greatest expense lies in construction, with the average cost of construction being $4.7 million. The average year of construction for the represented firms is 1976, with an average last major renovation in 1997. Purchases of turf and equipment comprise the two greatest annual expenditures, each reaching approximately $1.8 million for a combined 35 % of total expenditures. Other major expense categories include chemicals and fertilizers (21 %), facilities and maintenance (20 %), and overhead and miscellaneous costs (16 %). Commercial and Institutional The estimates for commercial and institutional expenditures are recorded in Table 15. These peripheral consumers of green industry products include local businesses, as well as public schools, colleges and universities, and hospitals. The 26 respondents within this sector spent a total of $490,000 on green industry products, or an average of 10 just over $40,000 per firm. Major purchase categories include container and field grown shrubs and trees, turfgrass and sod, hard goods and propagation materials, and assorted flowering plants. However, these items combined make up just 25 percent of annual expenditures. The greatest cost for the commercial and institutional sector lay in overhead, which accounted for 42 percent of annual expenditures. Other significant expenditures include miscellaneous costs (11 percent), telephone and communication (6 percent), and facilities (5 percent). Employment The 418 firms represented in the survey employ a total of 3,025 workers, including seasonal/part time, full time, management and clerical, as well as sales staff employees. Table 16 summarizes the distribution of workers by sector, and includes only totals for direct employment levels. In 2002, the surveyed firms employed a total of 1,065 seasonal and part time workers, 1,392 full time workers, 375 managerial and clerical workers, and 193 sales staff. Tables 17-21 provide a more detailed summary of employment composition by sector, including average levels for wages and hours, as well as total benefits and varying degrees of migrant labor participation. Wage estimates were calculated by dividing total payroll expenses by total man hours for each firm. Wage observations were then averaged across all firms in each sector. The resulting wage levels represent average wage values for each sector, rather than individual wage rates. Estimates for annual hours per worker were calculated similarly. Survey respondents were asked to approximate total weekly hours, as well as total work weeks per year for each employee category. These figures were then 11 multiplied to estimate total annual hours per worker for each employee category. For instance, a survey response with a 40-hour week for 50 weeks per year would equal 2000 annual hours per worker. Again, the resulting products were averaged across firms for each sector. Estimates are also provided for the average number of workers per firm for each employee category. It should be noted that these averages include only firms hiring employees in each category, and excludes firms that did not hire workers for each particular category. Survey respondents were asked to provide an approximate ratio of migrant to local workers within their firm. These ratios were averaged across firms to provide an approximate level of migrant participation for each sector. Total benefits listed within the survey include health and life insurance, worker?s compensation, and annual bonuses. The total benefits expense was then divided by the total number of employees to equal total benefits per worker for each firm. These levels were averaged across firms to provide an estimate of total benefits per worker for each sector. Nursery and Greenhouse Employee composition for the nursery and greenhouse sector is summarized in Table 17. The nursery and greenhouse respondents employed a total of 990 workers. The 115 firms represented in this study employed a total of 315 seasonal and part time workers, with an average of 5.3 seasonal and part time workers per firm during 2002. These employees earned an average wage of $9.88 per hour, and worked an average of 741 annual hours per employee. The nursery and greenhouse sector relies more heavily upon its full time and professional employees, with a total of 498 full time workers, 116 12 management and clerical workers, and 61 sales staff. Full time workers earned an average wage of $10.87 per hour, and worked an average of 2,090 annual hours per employee, or just over 40 hours per week. Producers employed an average of 9.2 full time workers per firm. Respondents employed an average 2.8 management and clerical staff, who earned an average wage of $18.04, for an average of 2,196 annual hours per worker. The mean wage for sales staff employees is $16.59 but may not fully reflect commission earnings. There were 3.1 Sales staff employees per firm, who worked an average of 2141 hours per year. Roughly 16.8 % of the nursery and greenhouse labor force was comprised by migrant workers in 2002. Producers paid an average of $1,341 in annual benefits per worker. Turfgrass and Sod Employment estimates for the turfgrass and sod sector are listed in Table 18. The 18 respondents for turfgrass and sod employed 158 workers in 2002. Nearly half of these employees or 68 were seasonal and part time workers, for an average of 5.7 per firm. Seasonal and part time workers earned an average wage of $9.60 and worked approximately 925 hours per year. Producers employed 61 full time workers, or 5.1 per firm. Full time workers earned an average wage of $10.52 and worked an average 2,246 hours per year. Survey respondents employed 25 management and clerical workers, or 2.1 per firm. These employees earned an average wage of $21.42 and worked roughly 2,030annual hours. Just three of the respondents hired sales staff workers, for a total of 4 workers, or 1.3 per firm. Sales staff employees earned an average wage of $22.22 and worked approximately 2,132 hours per year. Migrant workers comprised 9.4 % of the 13 turfgrass and sod labor force and producers paid roughly $1,158 in annual benefits per worker. Lawn and Landscape The lawn and landscape survey responses for employment are listed in Table 19. The lawn and landscape respondents employed 1,123 workers. With a total of 426 employed and 3.9 per firm, seasonal and part time workers comprise a greater portion of this sector?s labor force. Seasonal and part time employees earned an average wage of $9.33 per hour and worked an average 819 hours per year. Survey respondents employed 485 full time workers for an average of 4.3 per firm. Full time employees earned an average wage of $9.71 and worked approximately 2,022 annual hours. The lawn and landscape sector relies less heavily upon its professional staff. Producers employed a total of 138 management and clerical workers, or 1.9 per firm. These employees earned an average wage of $13.26 and worked roughly 1937 annual hours. Producers employed a total of 74 sales staff, or 1.6 per firm. Sales staff employees earned an average wage of $13.44 and worked an average of 1,925 hours per year. Migrant workers comprise just 7.4 % of the lawn and landscape labor force. Survey respondents paid an average of $1,039 in annual benefits per worker. Golf Course The golf course employment levels are summarized in Table 20. The 25 respondents employed 507 workers in 2002. Of these, 150 were seasonal and part time employees, for an average of 6.8 per firm. Seasonal and part time employees earned an 14 average wage of $7.68 and worked approximately 853 hours per year. Full time employees comprised more than half of all workers in the golf course sector. The 287 full time workers earned an average wage of $9.98 and worked roughly 2,227 annual hours. There were an average 12.0 full time workers per firm. The respondents employed 66 management and clerical workers, or 3.3 per firm. Their average wage rate was $17.26 for 2,466 hours per year. Just 3 firms hired sales staff employees, for a total of 4 or 1.3 per firm. Sales staff employees earned an average wage of $16.25 and worked approximately 2,000 hours in 2002. At 20.4 %, the golf course sector employed the greatest proportion of migrant workers. Golf course respondents also provided the highest level of annual benefits to their employees, roughly $1,672 per worker. Retail Employment estimates for the retail sector are listed in Table 21. The retail sector relies more heavily than the other industry sectors upon seasonal and part time workers. The 43 retail respondents employed a total of 248 workers, of whom 107 are seasonal and part time, for an average of 4.0 per firm. At $7.48 this sector has the lowest average seasonal and part time wage rate. These employees worked approximately 962 hours in 2002. The respondents hired 61 full time workers, or 3.8 per firm. Full time employees earned a wage rate of roughly $10.46 for 2,088 annual hours. The respondents hired 30 management and clerical workers, or 1.7 per firm. These employees earned an average wage of $15.96 and worked approximately 1,890 hours in 2002. Retail firms hired 50 sales staff workers, or 3.3 per firm. This is the highest proportion of sales staff within the survey. Sales staff employees earned an average wage rate of $12.49 and worked 2,165 15 annual hours. Respondents paid an average of $1,395 in benefits per worker. Retail firms were not asked to report their levels of migrant labor participation. Industry Concerns The final component of the survey catalogues a series of possible threats to each sector. Respondents were asked to indicate their level of concern regarding each possible threat on a scale from 1 to 5, from very little concern to very high concern. The average levels of concern for each sector regarding each possible threat are listed in Table 22. Not surprisingly, water restrictions appear to pose one of the most serious threats to all sectors included in the survey. The producer sectors (Nursery and Greenhouse, Turfgrass and Sod, Lawn and Landscape), as well as the retail sector shared high levels of concern for both low prices and high production costs. The retail, golf course, and commercial/ institutional sectors each indicated high levels of concern for general economic conditions. The lawn and landscape, retail, and golf course respondents highlighted rising energy costs as a major threat. The lawn and landscape and retail sectors shared a common concern for lack of professionalism within their labor force. Both the nursery and greenhouse and golf course respondents expressed their greater concern for chemical restrictions. Lawn and landscape and golf course respondents each signaled equipment costs as a threat to their industry. The retail and golf course respondents shared high levels of concern for government regulations. Interestingly, although the retail sector recorded the lowest average wages for seasonal and part time workers, retail respondents indicated the highest level of concern for labor costs. The 16 nursery and greenhouse respondents also expressed their unique concern for the market power of large chains. Methodology An IMPLAN input-output model was used to estimate the economic impact of Alabama?s green industry (MIG, Inc., 2004), based upon the survey data. The survey findings for the nursery and greenhouse, lawn and landscape, and turfgrass and sod sectors were first expanded to estimate state levels for total income, total costs and total exports. Due to the varied availability of statewide information, separate expansion methods are imposed for each sector. Expansion results are listed in Appendix C. The expanded survey results were then imported into the IMPLAN model. IMPLAN uses an input-output framework (Miller and Blair) to model a regional or state economy through estimated industry, employee, household, and government transactions. The model is based upon a set of direct, indirect, and induced multipliers to estimate the total economic impact of stated producer activity. The multipliers for output, value added, and indirect business taxes represent units of dollars per dollar of output. The employment multiplier represents total jobs per million dollars in output. The multipliers differ by sector due to variances in industry structure and local supply chains. Total economic impact includes the direct effects of total sales, as well as the indirect effects of producer purchases from firms external to the industry, and the induced effects of employee household spending. Total economic impacts for the nursery and greenhouse, turfgrass and sod, and lawn and landscape sectors were calculated through: 17 I ij = S i (A ij ) + E i (B ij + C ij ); Total economic impacts for the retail trade sector were calculated through: I ij = G i (A ij ) + E i (B ij + C ij ), where I ij is total impact for each sector (i), and economic activity (j) for output, employment, value added, and indirect business taxes. S i is total sales for each sector (i). E i is total export sales, both to other states and international, for each sector (i). G i is the gross margin (0.295) on retail sales for sector (i). A ij represents the direct effects multiplier for sector (i) and economic activity (j). B ij represents the indirect effects multiplier. C ij represents the induced effects multiplier. Expansions Nursery and greenhouse Income expansions for the nursery and greenhouse sector are listed in Table 1. A total of 115 nursery and greenhouse firms responded to the survey, out of an estimated 767 statewide. The total number of state firms is derived from the Alabama Department of Agriculture and the Alabama Nurseryman?s Association membership roster. The state total farms and survey respondents are each stratified according to their levels of 2002 cash receipts, ranging from less than $1,000 to $1 Million or more. Expansion factors are calculated as the ratio of state total farms to total survey respondents for each level of cash receipts. The expansion factors are then applied to the survey?s total reported income 18 to reach an expanded income estimate for each level of cash receipts. The expansions result in a total estimated income just under $205 Million for the nursery and greenhouse sector. Expansion Factor i =Total Farms i / Total Respondents i Expanded Income i =Expansion Factor i (Reported Income i ) This method of stratification is employed to prevent an overweighting of larger firms, which would result in inflated estimates for total income. For instance, without stratification there would be one expansion factor, 6.7 (767/115). When applied to total reported income, this leads to an expanded income of roughly $475 Million, which is more than twice the estimate achieved through stratification. In addition, the Alabama Department of Agriculture records in its annual bulletin total cash receipts for the nursery and greenhouse and turfgrass and sod combined sectors at roughly $250 Million for 2002. In light of these estimates, stratification is believed to provide a more accurate income expansion. While exports are included in total income, they are also transformed separately in the IMPLAN model. Unlike cash receipts, exports are considered a final demand product. In other words, it is assumed that export output leaves the state, unlike the domestic portion of cash receipts which may have additional transactions within the state economy. Table 2 lists the estimated nursery and greenhouse exports for 2002. Stratification by cash receipts is similarly employed for nursery and greenhouse exports. The percentage of respondents who reported export income in the survey is calculated for each level of cash receipts. This percentage is then applied to the state total number of firms to reach an estimated number of state total firms with exports for 19 2002. This results in an estimated 402 state firms with exports. The survey?s reported export income is averaged for each level of cash receipts. This average level of exports per firm is then applied to the number of estimated total firms with exports for an estimated total exports by category. The estimated 2002 state total exports for the nursery and greenhouse sector are roughly $89 Million. Estimated Farms i =%Exporting Respondents i (Total Farms i ) Estimated Exports i =Estimated Farms i (Average Exports i ) The income expansion method is replicated to estimate total costs for the nursery and greenhouse sector, provided in Table 3. The cost expansion factors slightly differ from the income expansion factors due to the respondents? occasional decision to omit either cost or income levels. Thus, there are 113 respondents reporting costs, compared to 115 respondents reporting income. Again, the expansion factor is simply the ratio of total farms to the number of respondents. The expansion factors are then applied to total reported costs, to reach estimates for statewide costs by level of cash receipts. This results in a statewide total estimated cost of roughly $77 Million for the nursery and greenhouse sector. Expansion Factor i =Total Farms i / Total Respondents i Expanded Costs i =Expansion Factor i (Reported Costs i ) Turfgrass and Sod Table 4 compiles results for the turfgrass and sod income expansion. Figures for total firms and stratification levels were drawn from the Alabama Turfgrass and Sod 20 Association, as well as a telephone interview with the Alabama state statistician. There are an estimated 69 total turfgrass and sod firms in the state for 2002, and a total of 17 survey respondents for this sector. The turfgrass and sod expansions employ the same methods used for the nursery and greenhouse sector. The expansion factor is the ratio of total state firms to total survey respondents, stratified by cash receipts. This expansion factor is applied to the total reported income to reach an expanded income for each level of cash receipts. This results in an expanded total income of just over $78 Million for the turfgrass and sod sector. Estimated Exports for the turfgrass and sod sector are listed in Table 5. The percentage of farms reporting exports for each level of cash receipts was calculated from survey data. These percentages were than applied to the state total farms to estimate a total of 48 farms statewide with exports. The estimated number of farms is applied to the average level of exports to produce estimated export income for each level of cash receipts. The total estimated export income for 2002 is roughly $19 Million for the turfgrass and sod sector. Table 6 outlines the turgrass and sod cost expansion. The expansion factors used to estimate total costs are identical to those used to estimate income for the turfgrass and sod sector. The 17 respondents for this sector reported total costs of nearly $6.7 Million. The expansion factors were applied to the survey?s total reported costs for each level of cash receipts to arrive at subsequent estimates for total statewide costs. The estimated total cost for the turfgrass and sod sector is $38 Million. 21 Lawn and Landscape State totals for income, costs and exports in the lawn and landscape sector are drawn directly from IMPLAN estimates. Table 7 lists these totals. This is due partly to a lack of income stratification in state reporting, but also to the existence of unlicensed lawn and landscape firms operating in the state. The survey was mailed exclusively to licensed firms, resulting in a likely under-representation of the size of the lawn and landscape sector. IMPLAN bases its estimate not only on agricultural census results, but also upon county business patterns. The IMPLAN estimates for total income and exports in the state?s lawn and landscape sector are just over $521 Million and $110 Million respectively. IMPLAN does not estimate total costs. Total costs are estimated based upon the ratio of IMPLAN estimated state total income to the survey?s reported income, an expansion factor of 8.43. This expansion factor is applied to the survey?s total reported costs to equal an estimated state total cost of roughly $305 Million. Expansion Factor=IMPLAN Income/Reported Income Expanded Costs=Expansion Factor(Reported Costs) Impact Results Impact Results are listed in Appendix D. The nursery and greenhouse expanded sales and exports, an estimated $205 Million and $89 Million respectively, were imported into the IMPLAN model below in Table 1. The direct effects of total sales, combined with the indirect and induced effects of total exports, generate total output impacts nearing $306 Million. The industry directly employs 4,319 workers, with an estimated total employment impact of 5,726 jobs statewide. Total value added impacts and indirect 22 business tax impacts include the direct effects of total sales, as well as the indirect and induced effects of export sales. Total value added impacts and indirect business tax impacts for the nursery and greenhouse industry were roughly $167 Million and $6 Million respectively. Table 2 reports the total economic impacts for the turfgrass and sod sector. With direct effects of $78 Million in total sales, added to the indirect and induced effects of $19 Million in export sales, the industry fuels a total output impact near $100 Million. The 69 turfgrass and sod firms produce a total employment impact of roughly 1,300 jobs. The industry creates $53 Million in total value added impacts, and offered $1.5 Million in indirect business tax impacts. The Lawn and Landscape economic impacts are listed in Table 3. The direct effects of $521 Million in total sales, along with the indirect and induced effects of $110 Million in total exports propelled a total output impact just under $650 Million. The 1,029 firms employ a total of 8,521 workers, creating a total of 10,273 jobs statewide. Largely a service based industry, the lawn and landscape sector lends nearly $400 Million in total value added impacts. The industry also provides roughly $18 Million in indirect business tax impacts to the state of Alabama. The retail sector ranges from locally owned garden centers to corporate supermarkets, home improvement warehouses and mass merchandisers. Due to its wide structural variance coupled with a low survey response rate, the retail sector proved more difficult to quantify or expand given survey data. However, the retail sector plays a vital role in purveying green industry goods to consumer markets. Estimates for total firms, employees, sales, and exports were subsequently derived from county business patterns. 23 Results for the retail economic impacts are provided in Table 4. There are an estimated 727 green industry retail firms employing 6,957 employees. Through transport, marketing, and customer services, retail firms add relatively higher value to green industry products, which supports the sector?s $1.4 Billion in total sales, along with $407 Million in total exports. It is important to note that only the gross margin of retail sales is subject to direct multiplier effects. A standard gross margin of 29.5 percent is applied to total sales. Because retail firms purchased their goods from the producer sectors, applying the direct effects multiplier to total sales would result in a double counting of these green industry products, along with inflated total output impact estimates. The direct effects of gross margin sales, combined with the indirect and induced effects of export sales, produce a total output impact just over $850 Million. The retail industry also creates more than 13,000 jobs statewide, and provides more than $240 Million in indirect business tax impacts. The retail sector?s most dramatic contribution to the state lies in value added. The industry generates just over $640 Million in total value added impacts, which is roughly half of the industry?s total value added impact. Table 2 summarizes the total green industry economic impacts. The 2,592 total firms amassed roughly $2.2 Billion in total sales, of which $625 Million was derived from exported goods and services. The industry directly employs nearly 21,000 workers, and creates an additional 10,000 jobs in related industries. Total value impacts top $1.2 Billion, mostly due to the retail sector. The industry provides $270 Million in indirect business tax impacts to the state budget. Total estimated output impacts are $1.9 Billion. 24 Table 2. Total Green Industry Economic Impacts, 2002 Total Operations 2,592 Total Sales $ 2,161,653,295 Export Sales $ 625,600,104 Number Employees 20,845 Total Employment Impacts (jobs) 30,860 Total Value Added Impacts $ 1,258,883,904 Total Indirect Business Tax Impacts $ 269,352,100 Indirect Output Impacts $ 107,872,285 Induced Output Impacts $ 594,259,727 Total Output Impacts $ 1,906,797,356 Conclusion Several recent green industry economic impact studies have been conducted in the southeast region. A 2000 report of the Florida green industry estimates a total output impact of $9.16 Billion, total value added impact of 6.40 Billion, and a total employment impact of 192,000 jobs (Hodges and Haydu). A 2001 study conducted for Tennessee finds a total output impact of $6.37 Billion, total value added impact of $4.50 Billion, and a total employment impact of 73,486 jobs (Hall). Louisiana holds the greatest similarities to Alabama in the region. A 2001 Louisiana impact study reports $2.03 Billion in total green industry output impact and a total employment impact of 47,776 jobs (Pinel, et al.). Alabama?s green industry has experienced remarkable growth relative to other crop sectors within the state. Despite its ranking by the state department of agriculture as Alabama?s largest crop in terms of cash receipts, the green industry is omitted from the state agricultural statistics bulletin?s list of state highlights, agricultural export analysis, and major crop analysis. Major crops detailed in the bulletin include cotton, soybeans, and peanuts. In perspective, horticulture crops reported higher cash receipts than the cotton, soybean, and peanut industries combined. While the green industry continues to 25 grow within the state, these commodities have either remained static, or steadily declined for the past two decades. The green industry represents a relatively new provider of agricultural goods and services, in light of the state?s history growing cotton, soybeans, and peanuts. This may explain its lack of recognition compared to the state?s more traditional commodities. Horticultural firms contributed $1.9 Billion in total output impact and more than 30,000 jobs to the Alabama economy in 2002. The estimated 2002 gross state product (GSP) for Alabama is roughly $125 Billion (Bureau of Economic Analysis), making the green industry 1.5 percent of the total state economy. This study represents the first attempt to estimate the green industry?s role in Alabama?s economy. This is a dynamic industry, with rapid growth both in the state and nationally. Hence, continued future study will be critical to maintain an accurate determination of the green industry?s economic impact in Alabama. 26 Appendix A Survey Administration Initial Contact Postcard Date Dear Green Industry Affiliate: Within the next two weeks you will receive in the mail a request to complete a brief survey that will be used in an upcoming economic impact study of for the green industry. This study is being conducted by researchers at Auburn University, and it is supported by the Alabama Department of Agriculture and Industries as well as industry associations. I am writing in advance to inform you that you will be contacted. This is an important study designed to help public agencies and private firms evaluate the overall economic contribution of the green industry to Alabama?s economy. If you are no longer associated with this industry, please call the number below and you will be removed from the mailing list. I sincerely appreciate your time and consideration. Your knowledge and experience will enable researchers to further emphasize the importance of the green industry in Alabama. 27 Nursery and Greenhouse Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 1. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited LiablityCompany (LC) 2. Please indicate the types of products grown by listing the dollars earned or percent of total nursery sales they represent: Type Of Crop Dollars Or % of Sales Foliage $ % Bedding plants $ % Potted flowering plants $ % Herbaceous plants $ % Greenhouse Crops Vegetable transplants $ % Container-grown shrubs $ % Container-grown trees $ % Field-grown shrubs $ % Field-grown trees $ % Container grasses and ground cover $ % Perennials $ % Nursery Crops Roses $ % Turf Grass Crops $ % Christmas Trees % Propagation Materials (liners, plugs, tissue culture, etc.)-for sale only $ % Other (Specify) % TOTAL $ 100% 3. How much area of production space does your nursery utilize at this general location (include aisles, driveways, and walkways): (a) _______acres of nursery bed space in the open (b) _______sq. ft. of greenhouse or shade house enclosed 4. Please indicate the percentage of your labor force that comes from the following sources. (Total should add up to 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor_______% (d) Local Labor______% 5. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire. (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 6. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 28 7. What is your annual cost for the following employee-related coverage? (a) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 8. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 9. What percent of your total firm sales are made to buyers outside of Alabama __________%? 10. In which places do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (e) Other Southeast (g) Northeast (International_______________ (b) Florida (d) Georgia (f) Southwest (h) Northwest 11. In what county or counties is your operation located? ____________________ _____________________ _______________________ (Over please ? more on reverse side) 12. Please provide a ?best estimate? of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent or Percent of Sales Containers $ % Soil mixes $ % Propagation stock (seed, cuttings, plugs, tissue culture plantlets, etc.) $ % Plants purchased from other growers $ % Pesticides (all agri-chemicals) $ % Fertilizers (synthetic and organic) $ % Hardscape material (irrigation etc.) $ % Equipment (purchases, leases, maintenance, and repairs) $ % Facilities (purchases, leases, maintenance, and repairs) $ % Shipping and transportation $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 13. In order to estimate the total size of the grower sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 29 14. Please provide a ?best estimate? of the percentage of your total sales to the following sources? (Total should add up to 100%.) Categories Percent of Total Sales Directly to the Public % Municipalities % Retail Nursery/Garden Centers % Retail Mass Merchandisers % Re-wholesalers (brokers, other growers, etc.) % Landscape Contractors % Lawn and Landscape Installation and Maintenance Firms % Florists % Arborists % Other (Specify) % TOTAL 100% 15. Please provide an estimate of your annual water usage. _________gallons. What percentage of your water used comes from: (a) Private Well______% (b) Natural Surface ______% (c) Recaptured _______% (d) City/County ______% 16. What percentage of your company?s marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, brochures, etc.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 17. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition by plant substitutes 1 2 3 4 5 Competition from imported plants 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 30 Turfgrass and Sod Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 18. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 19. Please indicate the level of turfgrass production in acres for your operation: Type Of Production Certified Non-Certified Sod acres acres Sprigs acres acresProduction Seed acres acres Fescue acres acres Bermuda acres acres Centipede acres acres Zoysia acres acres St. Augustine acres acres Types of Turf Other (Specify) acres acres TOTAL acres acres 20. How much do you plan to change your acreage in turf production over the next five years? ___________acres Increase Decrease 21. Please indicate the percentage of your labor force that comes from the following sources. (Total should add up to 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor_______% (d) Local Labor______% 22. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire? (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 23. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 24. What percent of your total firm sales are made to buyers outside of Alabama ________%? 25. In which places do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (e) Other Southeast (g) Northeast (i) International_______________ (b) Florida (d) Georgia (f) Southwest (h) Northwest 31 26. What is your annual cost for the following employee-related coverage? (b) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 27. Please provide an estimate of your annual water usage. _________gallons. What percentage of your water used comes from: (a) Private Well______% (b)Natural Surface ______% (c) Recaptured______% (d) City/County ______% 28. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 29. In what county or counties is your operation located? ____________________ _____________________ _______________________ (Over please ? more on reverse side) 30. Please provide a ?best estimate? of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent Or Percent of Sales Shipping and transportation $ % Equipment repairs and maintenance $ % Equipment purchases and leases $ % Plant material purchased $ % Fuel $ % Pesticides $ % Fertilizers $ % Other Chemicals $ % Telephone and other communication $ % Soil Fumigation $ % Hardscape materials (irrigation, etc.) $ % Advertising and marketing $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 31. In order to estimate the total size of the grower sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 32 32. Please provide a ?best estimate? of the percentage of your total sales to the following sources? (Total should add up to 100%.) Categories Percent of Total Sales Directly to the Public % Golf Courses % Municipalities % Retail Nursery/Garden Centers % Retail Mass Merchandisers % Re-wholesalers (brokers, other growers, etc.) % Other Turfgrass Producers % Greenhouse Growers % Landscape Contractors % Landscape Installation and Maintenance Firms % Lawn Care and Maintenance Firms % TOTAL 100% 33. What percentage of your company?s marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, brochures, etc.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 34. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition from new firms 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor costs 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 33 Lawn and Landscape Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 35. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 36. Please report dollars earned or percentage of sales for the following products or services: (Use the most convenient estimate.) Type Of Service/Material Dollars Earned Or Percent Of Sales Landscape design services $ % Landscape installation services $ % Landscape maintenance services $ % Lawn care and maintenance services $ % Sub-contracts: design, maintenance, and service $ % Irrigation installation or contracting $ % Live Plants $ % Horticultural supplies, equipment or hard goods $ % Other (Specify) $ % TOTAL $ 100% 37. Please indicate the percentage of your labor force that comes from the following sources. (Total should equal 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor______% (d) Local Labor______% 38. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire? (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 39. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 40. What is your annual cost for the following employee-related coverage? 41. $____________Medical/dental (b) $_________Life insurance (c) $___________Worker?s comp (d) $__________Bonuses 42. What percent of your firm?s work and/or services is provided for customers outside of Alabama __________%? 43. In which states do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (c) Other_____________________ (b) Florida (d) Georgia 34 44. Please give an estimate of planned expenditures on major construction or equipment purchases for 2003. $__________________Equipment $________________Construction 45. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 46. In what county or counties is your operation located? ____________________ _____________________ _______________________ 47. In order to estimate the total size of the landscape sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above (Over please ? more on reverse side) 48. Please give your best estimate of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent Or Percent of Sales Material Expenses (costs of resale materials such as plants, mulches, sod, seed, etc.) $ % Equipment repairs and maintenance $ % Equipment purchases and leases $ % Fuel $ % Pesticides $ % Fertilizers $ % Other Chemicals $ % Telephone and other communication $ % Hardscape materials (irrigation, etc.) $ % Facilities (mortgages, leases, maintenance, and repair) $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 49. What percentage of your total sales/services was to the following sources? (Please make sure the percentage sums to 100%. For example, if total sales came equally from two categories, then write in 50% in the blank next to each). Categories Percent of Total Sales Homeowners % Apartments and condominiums % Commercial establishments (restaurants, hotels, cemeteries, etc..) % Governments % Builders and developers % Other landscapers, interiorscapers or lawn maintenance firms % Other (Specify) ____________________ % TOTAL 100% 35 50. What percentage of your company?s advertising/marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, bochurs, c.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 51. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Unlicensed competitors 1 2 3 4 5 Increasing equipment costs 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition by plant substitutes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 OSHA requirements 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor cost 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 36 Retail Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 52. How would you classify your operation? (a) Independent Garden Center (b) Garden Center Chain (multiple outlets) (c) Mass Merchandiser 53. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 54. Please report the dollars or percentage of sales for the following products or services: (Use the most convenient estimate.) Type Of Product Dollars Or % of Sales Foliage $ % Bedding plants $ % Potted flowering plants $ % Herbaceous plants $ % Vegetable transplants $ % Container-grown shrubs $ % Container-grown trees $ % Field-grown shrubs $ % Field-grown trees $ % Container grasses and ground cover $ % Perennials $ % Roses $ % Turf Grass Crops $ % Christmas Trees $ % Propagation Materials (liners, plugs, tissue culture, etc.)-for sale only $ % Hard goods (tools, irrigation parts, lawnmowers, etc.) $ % Other (Specify) $ % TOTAL $ 100% 55. What is the approximate size of your retail display area (including indoor and outdoor areas)? (a) _______ sq. ft. Devoted to Hard Line Products (b) _______ sq. ft. Devoted to Green Goods 56. By what percentage do you expect your square footage to expand over the next 5 years? ________% 57. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 37 58. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire. (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 59. What is your annual cost for the following employee-related coverage? (c) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 60. What is the total dollar amount of plant materials purchased last year from producers outside of Alabama? $ __________ What percentage of your total purchases does this represent? ________% 61. In what county or counties is your operation located? ____________________ _____________________ _______________________ 62. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease (Over please ? more on reverse side) 63. Approximately what percentage of your 2002 sales volume was: (a) Residential ________% (b) Commercial/Industrial ________% (c) Government/Public ________% 64. Please provide the following information regarding buildings (structures), vehicles, and equipment (including office equipment): Item Total Current Value Annual Maintenance & Repairs Cost to Replace Buildings and Structures Vehicles All other equipment 38 65. Please give your best estimate of your annual expenditures (in dollars) or percent of total garden center sales for the following products (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Sold Or Percent of Sales Agri-Chemicals (all types) $ % Fertilizers (synthetic and organic) $ % Soil and potting mixes $ % Turfgrass/Sod $ % Foliage plants $ % Bedding plants $ % Potted flowering plants $ % Vegetative or herb plants $ % Shrubs $ % Trees $ % Christmas trees $ % Other plant material $ % Facilities (purchases, leases, maintenance, and repairs) $ % Telephone and other communication $ % Hard goods (tools, irrigation parts, lawnmowers, etc.) $ % Shipping and transportation $ % All overhead items (utilities, insurance, interest, repairs, etc.) $ % Other (specify): $ % TOTAL $ 100% 66. In order to estimate the total size of the grower sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 67. What percentage of your company?s marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, bochurs, c.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 39 68. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Quality of green industry products 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor cost 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 40 Golf Course Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 69. How would you classify your golf operation in terms of ownership? (a) Private Privately owned and use generally is restricted to members and guests. (Example: membership-only golf clubs (b) Semi-private Privately owned, but the facility is open on a fee basis to nonmembers. (Example: resort-oriented golf courses (c) Public Owned by a government agency and generally open to the public for use. (Example: city golf courses) 70. How many holes does your facility have?_____________(number of holes) 71. How many rounds of golf are played per year? (a) 9 holes__________(number of rounds) (b) 18 holes_________(number of rounds) 72. What is the weekday greens fee for 18 holes with a cart? $__________ Without a cart $__________ 73. What was the approximate construction cost for the golf course? $_____________ 74. In what year was it constructed? __________(year) 75. In what year was the most recent major renovation?______________(year) 76. What percentage of the total rounds was played by tourists (individuals who were not Alabama residents)? ________% tourists 77. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 78. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 79. Please indicate the percentage of your labor force that comes from the following sources. (Total should add up to 100%) (a) Migrant Labor_______% (b) Local Labor______% 41 80. What is your annual cost for the following employee-related coverage? (d) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 81. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire. (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 82. In what county or counties is your operation located? ____________________ _____________________ _______________________ 83. Please provide the following information regarding buildings (structures), vehicles, and equipment (including office equipment): Item Total Current Value Annual Maintenance & Repairs Cost to Replace Buildings and Structures Vehicles All other equipment (Over please ? more on reverse side) 84. What is the total dollar amount of plant materials and equipment purchased last year from producers outside of Alabama? $__________. What percentage of your total purchases does this represent? ________% 85. Please give your best estimate of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent Or Percent of Sales Agri-Chemicals (all types) $ % Fertilizers (synthetic and organic) $ % Soil, soil conditioners and mulch $ % Irrigation $ % Turf installation and maintenance $ % Plant materials purchased $ % Equipment purchases and leases $ % Facility mortgages and rentals $ % Facilities and equipment repairs and maintenance $ % Telephone and other communications $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 86. In order to estimate the total size of your sector in Alabama, please give your firm?s total gross income for 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 42 87. What was the total amount of revenue generated from the following sources in 2002? Item Revenue Generated Membership Fees/Dues $ Green Fees $ Golf Cart Rental $ Driving Range Usage and Golf Lessons $ Pro Shop $ Food and Beverages $ 88. Please provide an estimate of your annual water usage. _________gallons. What percentage of your water used comes from: (a) Private Well______% (b) Natural Surface ______% (c) Recaptured______% (d) City/County ______% 89. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Poor worker education or skills 1 2 3 4 5 Increasing costs of equipment 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Quality of green industry products 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Competition from other golf courses 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor cost 1 2 3 4 5 Increasing energy/fuel costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 43 Commercial and Institutional Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 90. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 91. How many years has this company been in business? ____________ years 92. Please report the dollars or percentage of your company?s total purchases were for the following products or services: (Use the most convenient estimate.) Type Of Product Dollars Or % of Purchases Cut foliage and flowers $ % Bedding plants $ % Potted flowering plants $ % Herbaceous plants $ % Vegetable transplants $ % Container-grown shrubs $ % Container-grown trees $ % Field-grown shrubs $ % Field-grown trees $ % Container grasses and ground cover $ % Perennials $ % Roses $ % Turf Grass Crops $ % Christmas Trees $ % Propagation Materials (liners, plugs, tissue culture, etc.)-for sale only $ % Hard goods (tools, irrigation parts, lawnmowers, etc.) $ % Other (Specify) $ % TOTAL $ 100% 93. In 2002, what was the approximate area of lawn and garden maintained for your company (report either square footage or acreage)? (a) _______ square feet or (b) _______ acres 94. By what percentage do you expect this area to expand over the next 5 years? __________% 95. What percentage of your grounds maintenance is performed by: (a) In-house staff ___________% (b) Contractors __________ % 96. In 200, how many in-house employees worked with grounds maintenance in 2002? ____________ number of employees 97. Please report your total annual expenditures for in-house grounds maintenance employees for 2002. $__________________________ 44 98. Please check the proper category that represents the total value of each product or service purchase by your business in 2002. Total Value of Purchases Product or Service Less than $100 $100 to $499 $500 to $999 $1,000 to $2,999 $2,000 to $3,999 $4,000 to $5,999 $6,000 to $7,999 $8,000 to $9,999 $10,000 or more Landscape plants Lawn and garden equipment or supplies Landscape design, installation or maintenance services 99. What is the total dollar amount of plant materials purchased last year from producers outside of Alabama? $ __________________ What percentage of your total purchases does this represent? __________% 100. In what county or counties is your operation located? ____________________ _____________________ _______________________ 101. By what percentage do you expect your purchases of green industry products and/or services to change over the next 5 years? ___________% Increase Decrease (Over please ? more on reverse side) 102. Please provide the following information regarding buildings (structures), vehicles, and equipment (including office equipment): Item Total Current Value Annual Maintenance & Repairs Cost to Replace Buildings and Structures Vehicles All other equipment 45 103. Please give your best estimate of your annual expenditures (in dollars) or percent of total garden center sales for the following products (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Sold Or Percent of Sales Agri-Chemicals (all types) $ % Fertilizers (synthetic and organic) $ % Soil and potting mixes $ % Turfgrass/Sod $ % Foliage plants $ % Bedding plants $ % Potted flowering plants $ % Vegetative or herb plants $ % Shrubs $ % Trees $ % Christmas trees $ % Other plant material $ % Facilities (purchases, leases, maintenance, and repairs) $ % Telephone and other communication $ % Hard goods (tools, irrigation parts, lawnmowers, etc.) $ % Shipping and transportation $ % All overhead items (utilities, insurance, interest, repairs, etc.) $ % Other (specify): $ % TOTAL $ 100% 104. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Quality of green industry products 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor cost 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 46 Appendix B Survey Findings Table 1. Total Alabama Green Industry of Survey Respondents Sales and Expenditures, 2002 Sector Gross Sales Total Expenditures Respondents Nursery and Greenhouse $ 70,840,892 $ 26,292,997 114 Turf Grass and Sod $ 12,957,595 $ 2,473,911 17 Lawn and Landscape $ 61,829,095 $ 23,074,239 191 Retail $ 15,782,200 $ 12,387,717 43 Golf Course $ 27,601,466 $ 10,179,946 25 Commercial and Institutional N/A $ 1,707,260 26 Total $ 189,011,248 $ 82,610,859 414 Table 2. Alabama Green Industry Survey Respondents Nursery and Greenhouse Annual Sales, 2002 Type of Crop Total Revenue Revenue Share Average Revenue Foliage $ 1,448,647 2.0% $ 12,707 Bedding Plants $ 7,388,250 10.4% $ 64,809 Potted Flowering Plants $ 2,486,850 3.5% $ 21,814 Herbaceous Plants $ 323,250 0.5% $ 2,836 Vegetable Transplants $ 162,800 0.2% $ 1,441 Container-Grown Shrubs $ 26,123,347 36.9% $ 229,152 Container-Grown Trees $ 3,910,653 5.5% $ 34,304 Field-Grown Shrubs $ 1,946,752 2.7% $ 17,228 Field-Grown Trees $ 5,907,400 8.3% $ 52,278 Container Grasses/Ground Cover $ 2,614,703 3.7% $ 22,936 Perennials $ 1,063,350 1.5% $ 9,328 Roses $ 1,089,663 1.5% $ 9,558 Turf Grass Crops $ 5,230,000 7.4% $ 46,283 Christmas Trees $ 371,000 0.5% $ 3,283 Propagation Materials $ 410,500 0.6% $ 3,633 Other $ 325,000 0.5% $ 2,876 Average Gross $ 621,411 Total Gross Income $ 70,840,892 47 Table 3. Alabama Green Industry Survey Respondents Nursery and Greenhouse Sales Market, 2002 Category Percent of Total Sales Total Sales Directly to Public 9% $ 6,224,350 Municipalities 2% $ 1,633,198 Retail Nursery/ Garden Centers 24% $ 16,698,458 Retail Mass Merchandisers 12% $ 8,285,479 Re-Wholesalers 26% $ 18,414,065 Landscape Contractors 20% $ 13,995,424 Landscape Installation 6% $ 3,907,425 Florists 1% $ 595,987 Arborists 0% $ - Other 2% $ 1,086,507 Total 100% $ 70,840,892 Table 4. Alabama Green Industry Survey Respondents Nursery and Greenhouse Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Containers $ 1,373,647 5.2% $ 27,473 Soil Mixes $ 1,114,890 4.2% $ 21,036 Propagation Stock $ 2,735,993 10.4% $ 66,732 Plants Purchased from Other Growers $ 2,904,184 11.0% $ 66,004 Pesticides $ 1,082,665 4.1% $ 18,667 Fertilizers $ 1,120,184 4.3% $ 18,364 Hardscape Material $ 456,727 1.7% $ 11,711 Equipment $ 1,339,381 5.1% $ 23,918 Facilities $ 1,176,531 4.5% $ 32,681 Shipping and Transportation $ 2,441,961 9.3% $ 65,999 All Overhead Items $ 6,480,815 24.6% $ 124,631 Other $ 4,066,019 15.5% $ 271,068 Average Expenditures $ 457,600 Total Expenditures $ 26,292,997 48 Table 5. Alabama Green Industry Survey Respondents Turfgrass and Sod Annual Acreage, 2002 Production Type Certified (Acres) Non-Certified (Acres) Sod 264 6,044 Sprigs 4 0 Production Seed 0 0 Fescue 0 74 Bermuda 54 2,032 Centipede 0 6,349 Zoysia 10 1,192 St. Augustine 0 510 Types of Turf Other 0 40 Total Acreage 332 16,241 Average Sales $ 925,542 Total Sales $12,957,595 Table 6. Alabama Green Industry Survey Respondents Turfgrass and Sod Sales Market, 2002 Category Percent of Total Sales Total Sales Directly to the Public 19% $ 2,414,664 Golf Courses 7% $ 862,746 Municipalities 2% $ 298,416 Retail Nursery/ Garden Centers 13% $ 1,643,969 Retail Mass Merchandisers 0% $ - Re-Wholesalers 9% $ 1,221,241 Other Turf Grass Producers 9% $ 1,132,684 Greenhouse Growers 0% $ - Landscape Contractors 29% $ 3,731,989 Landscape Installation and Maintenance Firms 10% $ 1,266,036 Lawn Care and Maintenance Firms 3% $ 385,850 Total 100% $ 12,957,595 49 Table 7. Alabama Green Industry Survey Respondents Turf Grass and Sod Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Shipping and Transportation $ 2,197,689 39.5% $ 219,769 Equipment Repairs and Maintenance $ 279,075 5.0% $ 21,467 Equipment Purchases and Leases $ 594,659 10.7% $ 45,743 Plant Material Purchased $ 72,476 1.3% $ 8,053 Fuel $ 287,836 5.2% $ 22,141 Pesticides $ 44,923 0.8% $ 4,084 Fertilizers $ 100,170 1.8% $ 8,348 Other Chemicals $ 54,523 1.0% $ 5,452 Telephone and Other Communication $ 229,677 4.1% $ 19,140 Soil Fumigation $ 17,000 0.3% $ 2,833 Hardscape Materials $ 111,081 2.0% $ 12,342 Advertising and Marketing $ 180,126 3.2% $ 13,856 All Overhead Items $ 831,000 14.9% $ 63,923 Other $ 563,499 10.1% $ 80,500 Average Expenditures $ 391,277 Total Expenditures $ 5,563,733 Table 8. Alabama Green Industry Survey Respondents Lawn and Landscape Sales, 2002 Service/Material Total Revenue Revenue Share Average Revenue Landscape Design Services $ 1,420,767 2.3% $ 7,517 Landscape Installation Services $ 15,047,130 24.3% $ 79,614 Landscape Maintenance Services $ 3,495,999 5.7% $ 67,231 Lawn Care / Maintenance Services $ 7,621,016 12.3% $ 107,338 Sub-Contracts: Design, Maintenance $ 176,538 0.3% $ 10,385 Irrigation Installation or Contracting $ 3,239,544 5.2% $ 68,926 Live Plants $ 2,600,970 4.2% $ 78,817 Horticultural Supplies $ 1,002,549 1.6% $ 50,127 Other $ 1,267,575 2.1% $ 50,703 Average Gross $ 341,597 Total Gross Income $ 61,829,095 50 Table 9. Alabama Green Industry Survey Respondents Lawn and Landscape Sales Market, 2002 Category Percent of Total Sales Total Sales Homeowners 56% $ 34,377,825 Apartments and Condominiums 9% $ 5,684,064 Commercial Establishments 19% $ 12,033,089 Governments 1% $ 548,986 Builders and Developers 12% $ 7,337,453 Other Landscapers 2% $ 1,457,210 Other 1% $ 390,469 Total 100% $ 61,829,095 Table 10. Alabama Green Industry Survey Respondents Lawn and Landscape Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Material Expenses $ 11,423,917 32% $ 64,909 Equipment Repairs and Maintenance $ 2,800,668 7.7% $ 16,189 Equipment Purchases and Leases $ 3,417,175 9.4% $ 20,340 Fuel $ 3,485,593 9.6% $ 19,473 Pesticides $ 1,649,720 4.6% $ 11,072 Fertilizers $ 3,289,076 9.1% $ 20,303 Other Chemicals $ 277,512 0.8% $ 2,151 Telephone and Other Communication $ 751,115 2.1% $ 4,367 Hardscape Materials $ 1,355,456 3.7% $ 9,413 Facilities $ 1,486,347 4.1% $ 10,180 All Overhead Items $ 5,001,064 13.8% $ 30,309 Other $ 1,263,008 3.5% $ 12,262 Average Expenditures $ 191,538 Total Expenditures $ 36,200,652 51 Table 11. Alabama Green Industry Survey Respondents Retail Garden Center Annual Sales, 2002 Item Total Revenue Revenue Share Average Revenue Foliage $ 584,850 4% $ 13,925 Bedding Plants $ 1,767,008 11.2% $ 42,072 Potted Flowering Plants $ 637,630 4.0% $ 15,182 Herbaceous Plants $ 184,750 1.2% $ 4,399 Vegetable Transplants $ 446,600 2.8% $ 10,633 Container-Grown Shrubs $ 1,781,332 11.3% $ 42,413 Container-Grown Trees $ 565,967 3.6% $ 13,475 Field-Grown Shrubs $ 112,390 0.7% $ 2,676 Field-Grown Trees $ 253,545 1.6% $ 6,037 Container Grasses/ Ground Cover $ 261,350 1.7% $ 6,223 Perennials $ 452,800 2.9% $ 10,781 Roses $ 76,650 0.5% $ 1,825 Turf Grass Crops $ 979,249 6.2% $ 23,315 Christmas Trees $ 130,500 0.8% $ 3,107 Propagation Materials $ 87,500 0.6% $ 2,083 Hard Goods $ 903,765 5.7% $ 21,518 Other $ 1,585,070 10.0% $ 37,740 Average Gross $ 384,932 Total Gross Income $ 15,782,200 52 Table 12. Alabama Green Industry Survey Respondents Retail Garden Center Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Agri-Chemicals $ 437,620 3.8% $ 19,027 Fertilizers $ 833,603 7.3% $ 34,733 Soil and Potting Mixes $ 525,898 4.6% $ 20,227 Turf Grass and Sod $ 316,249 2.8% $ 22,589 Foliage Plants $ 574,150 5.0% $ 33,774 Bedding Plants $ 1,083,658 9.5% $ 47,116 Potted Flowering Plants $ 488,000 4.3% $ 27,111 Vegetative or Herb Plants $ 227,150 2.0% $ 13,362 Shrubs $ 1,513,572 13.3% $ 65,807 Trees $ 839,082 7.4% $ 39,956 Christmas Trees $ 6,200 0.1% $ 2,067 Other Plant Material $ 164,950 1.5% $ 14,995 Facilities $ 616,396 5.4% $ 28,018 Telephone and Communication $ 165,730 1.5% $ 5,919 Hard Goods $ 1,176,665 10.3% $ 47,067 Shipping and Transportation $ 175,470 1.5% $ 10,967 All Overhead Items $ 1,698,632 14.9% $ 65,332 Other $ 530,800 4.7% $ 106,160 Average Expenditure $ 284,346 Total Expenditure $ 11,373,825 53 Table 13. Alabama Green Industry Survey Respondents Golf Course Annual Sales, 2002 Item Total Revenue Revenue Share Average Revenue Membership Fees $ 7,324,857 25.2% $ 610,405 Green Fees $ 10,650,671 36.6% $ 591,704 Golf Cart Rental $ 4,449,234 15.3% $ 278,077 Driving Range/Golf Lessons $ 666,122 2.3% $ 47,580 Pro Shop $ 1,902,048 6.5% $ 118,878 Food and Beverages $ 4,076,344 14.0% $ 226,464 Average Number of Holes 22.5 Total Rounds (9 Holes) 20,000 Average Rounds (9 Holes) 10,000 Total Rounds (18 Holes) 698,166 Average Rounds (18 Holes) 29,090 Average Greens Fee (With Cart) $ 46 Average Greens Fee (Without Cart $ 33 Average Gross $ 1,314,356 Total Gross Income $ 29,069,276 54 Table 14. Alabama Green Industry Survey Respondents Golf Course Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Average Year of Construction 1976 Average Cost of Construction $ 4,704,444 Agri-Chemicals $ 1,100,402 11.0% $ 45,850 Fertilizers $ 1,024,676 10.2% $ 42,695 Soil, Soil Conditioners and Mulch $ 201,986 2.0% $ 10,099 Irrigation $ 249,719 2.5% $ 11,891 Turf Installation and Maintenance $ 1,753,515 17.5% $ 97,417 Plant Materials $ 73,850 0.7% $ 4,103 Equipment $ 1,775,098 17.7% $ 80,686 Facilities $ 1,132,250 11.3% $ 157,286 Facilities and Equipment Repairs $ 986,410 9.9% $ 39,798 Telephone and other Communications $ 163,868 1.6% $ 7,803 All Overhead Items $ 927,423 9.3% $ 54,554 Other $ 684,250 6.8% $ 171,063 Average Expenditures $ 417,123 Total Expenditures $ 10,010,946 55 Table 15. Alabama Green Industry Survey Respondents Commercial and Institutional Annual Expenditures, 2002 Item Total Expense Cost Share Average Expense Agri-Chemicals $ 15,440 3.2% $ 2,573 Fertilizers $ 12,850 2.6% $ 1,606 Soil and Potting Mixes $ 13,175 2.7% $ 1,882 Turf Grass and Sod $ 8,000 1.6% $ 2,667 Foliage Plants $ 1,250 0.3% $ 417 Bedding Plants $ 18,800 3.8% $ 3,133 Potted Flowering Plants $ 2,725 0.6% $ 681 Vegetative or Herb Plants $ 400 0.1% $ 200 Shrubs $ 13,300 2.7% $ 3,325 Trees $ 17,250 3.5% $ 5,750 Christmas Trees $ 100 0.0% $ 100 Other Plant Material $ 25,050 5.1% $ 12,525 Facilities $ 24,450 5.0% $ 6,113 Telephone and Communication $ 31,400 6.4% $ 5,233 Hard Goods $ 35,450 7.2% $ 7,090 Shipping and Transportation $ 10,300 2.1% $ 5,150 All Overhead $ 205,000 41.9% $ 68,333 Other $ 54,750 11.2% $ 18,250 Average Expenditure $ 40,808 Total Expenditure $ 489,690 Table 16. Alabama Green Industry Survey Respondents Green Industry Employment of Survey Respondents, 2002 Sector Seasonal/ Part Time Full Time Management Sales Staff Nursery and Greenhouse 315 498 116 61 Turfgrass and Sod 68 61 25 4 Lawn and Landscape 425.5 485 138 74 Retail 107 61 30 50 Golf Course 149.5 287 66 4 Total 1,065.00 1,392.00 375 193 Total All Firms 3,025.00 56 Table 17. Alabama Green Industry Survey Respondents Nursery and Greenhouse Employment, 2002 Category Seasonal/Part Time Full Time Management Sales Staff Average Wages $ 9.88 $ 10.87 $ 18.04 $ 16.59 Average Annual Hours 741 2090 2196 2141 Average Weekly Hours 32 42 43 41 Total Employees 315 498 116 61 Average Employees 5.3 9.2 2.8 3.1 Average Annual Benefits $ 1,341 Percent Migrant 16.8% Table 18. Alabama Green Industry Survey Respondents Turfgrass and Sod Employment, 2002 Category Seasonal/Part Time Full Time Management Sales Staff Average Wages $ 9.60 $ 10.52 $ 21.42 $ 22.22 Average Annual Hours 925 2,246 2,030 2,132 Average Weekly Hours 39 46 40 48 Total Employees 68 61 25 4 Average Employees 5.7 5.1 2.1 1.3 Average Annual Benefits $ 1,158 Percent Migrant 9.4% 57 Table 19. Alabama Green Industry Survey Respondents Lawn and Landscape Employment, 2002 Seasonal/Part Time Full Time Management Sales Staff Average Wages $ 9.33 $ 9.71 $ 13.26 $ 13.44 Average Annual Hours 819 2022 1937 1925 Average Weekly Hours 32 46 40 40 Total Employees 426 485 138 74 Average Employees 3.9 4.3 1.9 1.6 Average Annual Benefits $ 1,039 Percent Migrant 7.4 Table 20. Alabama Green Industry Survey Respondents Golf Course Employment, 2002 Seasonal/Part Time Full Time Management Sales Staff Average Wages $ 7.68 $ 9.98 $ 17.26 $ 16.25 Average Annual Hours 853 2227 2466 2000 Average Weekly Hours 38 43 48 40 Total Employees 150 287 66 4 Average Employees 6.8 12.0 3.3 1.3 Average Annual Benefits $ 1,672 Percent Migrant 20.4 Table 21. Alabama Green Industry Survey Respondents Retail Employment, 2002 Seasonal/Part Time Full Time Management Sales Staff Average Wages $ 7.48 $ 10.46 $ 15.96 $ 12.49 Average Annual Hours 962 2,088 1,900 2,162 Average Weekly Hours 33 41 40 43 Total Employees 107 61 30 50 Average Employees 4.0 3.8 1.7 3.3 Average Annual Benefits 1,395 Percent Migrant N/A 58 Table 22. Alabama Green Industry Concerns (Average Scores), 2002 1=Strongly Disagree 2=Disagree 3=Neither Agree nor Disagree 4=Agree 5=Strongly Agree Concern Nursery and Greenhouse Lawn and Landscape Retail Turf Grass and Sod Golf Course Commercial/ Institutional Water Restrictions 3.79 3.84 3.86 3.82 4.25 3.74 Chemical Restrictions 3.74 3.38 3.56 3.50 3.92 3.65 Low Prices 3.77 3.83 3.85 4.06 N/A 3.39 Production Costs 3.93 3.84 3.83 4.00 N/A 3.94 Equipment Costs N/A 3.75 N/A N/A 4.00 N/A Labor Costs 3.59 3.71 3.93 3.06 3.63 3.42 Energy Costs N/A 3.86 3.71 3.47 3.79 3.58 Unlicensed Competitors N/A 4.34 N/A N/A N/A N/A Competition from Imports 2.80 N/A N/A N/A N/A N/A Competition from Other Firms 2.78 2.89 N/A 3.65 3.58 N/A Market Power of Large Retail Chains 3.82 3.37 N/A 3.00 N/A N/A Government Regulations 3.55 3.42 3.81 3.00 3.75 3.67 OSHA Requirements N/A 3.25 N/A N/A N/A N/A Taxes 3.62 3.77 N/A 3.65 N/A N/A Green Industry Product Quality N/A N/A 3.54 N/A 3.08 3.37 Lack of Professionalism 3.09 3.91 3.85 3.24 3.00 3.25 Poor Worker Education and Skills N/A N/A N/A N/A 3.58 N/A Lack of Business Management Training 2.93 3.56 3.75 3.18 3.29 3.44 General Economic Conditions N/A 3.72 4.00 3.50 4.08 3.78 Labor Shortage 3.34 3.46 3.34 3.06 3.33 3.28 59 Appendix C Expansions Table 1. Alabama Green Industry Survey Respondents Nursery and Greenhouse Income Expansion, 2002 Cash Receipts$ Total Farms Respondents Reported Income Expansion Factor Expanded Income 1,000,000 or more 41 17 $ 53,785,248 2.4 $ 129,717,362 500-999,999 37 11 $ 8,367,939 3.4 $ 28,146,703 250-499,999 51 14 $ 4,791,178 3.6 $ 17,453,577 100-249,999 86 17 $ 2,480,168 5.1 $ 12,546,732 50-99,999 130 14 $ 1,089,501 9.3 $ 10,116,795 25-49,999 104 23 $ 786,600 4.5 $ 3,556,800 10-24,999 133 9 $ 154,100 14.8 $ 2,277,255 5-9,999 101 1 $ 9,000 101 $ 909,000 2,500-4,999 39 5 $ 17,500 7.8 $ 136,500 1-2,499 31 3 $ 3,700 10.3 $ 38,233 Less than 1000 14 1 $ 500 14 $ 7,000 Total 767 115 $ 71,485,434 $ 204,905,960 60 Table 2. Alabama Nursery and Greenhouse Estimated Exports, 2002 Cash Receipts$ Total Farms %Respondents w/ Exports Estimated Farms Average Exports Estimated Exports 1,000,000 or more 41 82.40 34 $ 2,060,191 $ 69,561,743 500-999,999 37 81.80 30 $ 311,382 $ 9,426,376 250-499,999 51 64.30 33 $ 193,641 $ 6,348,664 100-249,999 86 58.80 51 $ 23,248 $ 1,176,070 50-99,999 130 50.00 65 $ 23,775 $ 1,545,380 25-49,999 104 65.20 68 $ 8,486 $ 575,572 10-24,999 133 55.60 74 $ 3,774 $ 278,848 5-9,999 101 0.00 0 $ 0 $ 0 2,500-4,999 39 60.00 23 $ 1,820 $ 42,588 1-2,499 31 33.30 10 $ 30 $ 310 Less than 1000 14 100.00 14 $ - $ - Total 767 402 $ 88,955,552 61 Table 3. Alabama Green Industry Survey Respondents Nursery and Greenhouse Cost Expansion, 2002 Cash Receipts$ Total Farms Respondents Reported Costs Expansion Factor Expanded Costs 1,000,000 or more 41 17 $20,432,853 2.4 $49,279,234 500-999,999 37 11 $ 2,579,200 3.4 $ 8,675,491 250-499,999 51 14 $ 968,362 3.6 $ 3,527,604 100-249,999 86 16 $ 1,609,332 5.4 $ 8,650,160 50-99,999 130 11 $ 460,108 11.8 $ 5,437,640 25-49,999 104 25 $ 195,950 4.2 $ 815,152 10-24,999 133 9 $ 38,085 14.8 $ 562,812 5-9,999 101 1 $ - 101 $ - 2,500-4,999 39 5 $ 1,632 7.8 $ 12,730 1-2,499 31 2 $ 5,300 15.5 $ 82,150 Less than 1000 14 2 $ 1,200 7 $ 8,400 Total 767 113 $26,292,022 $77,051,372 Table 4. Alabama Green Industry Survey Respondents Turfgrass and Sod Income Expansion, 2002 Cash Receipts$ Total Farms Respondents Reported Income Expansion Factor Expanded Income 1,000,000 or more 20 3 $ 9,000,000 6.7 $ 60,000,000 500-999,999 15 4 $ 2,410,000 3.8 $ 9,037,500 250-499,999 19 5 $ 1,850,000 3.8 $ 7,030,000 100-249,999 11 4 $ 637,595 2.8 $ 1,753,386 50-99,999 4 1 $ 60,000 4 $ 240,000 Total 69 17 $ 13,957,595 $ 78,060,886 62 Table 5. Alabama Turfgrass and Sod Estimated Exports, 2002 Cash Receipts$ Total Farms %Respondents with Exports Estimated Farms Average Exports Estimated Exports 1,000,000 or more 20 66.7 13 $1,250,000 $16,666,667 500-999,999 15 50 8 $ 156,833 $ 1,176,250 250-499,999 19 80 15 $ 84,875 $ 1,290,100 100-249,999 11 75 8 $ 10,000 $ 82,500 50-99,999 4 100 4 $ 30 $ 120 Total 69 48 $1,501,738 $19,215,637 Table 6. Alabama Green Industry Survey Respondents Turfgrass and Sod Cost Expansion, 2002 Cash Receipts$ Total Farms Respondents Reported Costs Expansion Factor Expanded Costs 1,000,000 or more 20 3 $ 4,590,000 6.7 $30,600,000 500-999,999 15 4 $ 1,185,832 3.8 $ 4,446,870 250-499,999 19 5 $ 505,901 3.8 $ 1,922,424 100-249,999 11 4 $ 343,300 2.8 $ 944,075 50-99,999 4 1 $ 26,680 4.0 $ 106,720 Total 69 17 $ 6,651,713 $38,020,089 Table 7. Alabama Green Industry Survey Respondents Lawn and Landscape Income Expansions, 2002 Total Farms Respondents Expansion Factor Reported Income $ 61,829,095 1,029 184 8.43 Reported Costs $ 36,200,652 1,029 166 8.43 Estimated Income $ 521,256,730 Expanded Costs $ 305,193,428 Estimated Exports $ 110,200,000 63 Appendix D Economic Impacts Table 1. Alabama Nursery and Greenhouse Economic Impacts, 2002 Output Multipliers Employment Multipliers (Jobs/ $M) Total Value Added Multipliers Indirect Business Tax Multipliers Direct Effects 1.000 19.2 0.519 0.007 Indirect Effects 0.370 5.1 0.207 0.017 Induced Effects 0.766 10.7 0.474 0.035 Total Firms 767 Total Employees 4,319 Total Sales $204,905,960 Total Exports $88,955,552 Total Output Impacts Total Employment Impacts (jobs) Total Value Added Impacts Total Indirect Business Tax Impacts Indirect Output Impacts $32,892,917 Induced Output Impacts $68,167,796 Total Impacts $305,966,672 5,726 $166,942,915 $6,105,089 64 Table 2. Alabama Turfgrass and Sod Economic Impacts, 2002 Output Multipliers Employment Multipliers (Jobs/ $M) Total Value Added Multipliers Indirect Business Tax Multipliers Direct Effects 1.000 19.2 0.519 0.007 Indirect Effects 0.370 5.1 0.207 0.017 Induced Effects 0.766 10.7 0.474 0.035 Total Firms 69 Total Employees 1,030 Total Sales $78,060,886 Total Exports $19,215,637 Total Output Impacts Total Employment Impacts (jobs) Total Value Added Impacts Total Indirect Business Tax Impacts Indirect Output Impacts $7,105,328 Induced Output Impacts $14,725,192 Total Impacts $99,891,406 1,334 $53,603,808 $1,556,657 65 Table 3. Alabama Lawn and Landscape Economic Impacts, 2002 Output Multipliers Employment Multipliers (Jobs/ $M) Total Value Added Multipliers Indirect Business Tax Multipliers Direct Effects 1.000 31.0 0.616 0.025 Indirect Effects 0.301 4.3 0.168 0.011 Induced Effects 0.825 11.6 0.512 0.038 Total Firms 1,029 Total Employees 8,521 Total Sales $521,256,730 Total Exports $110,200,000 Total Output Impacts Total Employment Impacts (jobs) Total Value Added Impacts Total Indirect Business Tax Impacts Indirect Output Impacts $33,215,602 Induced Output Impacts $90,916,322 Total Impacts $645,388,655 10,273 $396,275,256 $18,587,180 66 Table 4. Alabama Retail and Garden Center Economic Impacts, 2002 Output Multipliers Employment Multipliers (Jobs/ $M) Total Value Added Multipliers Indirect Business Tax Multipliers Direct Effects 1.000 21.2 0.878 0.164 Indirect Effects 0.085 1.0 0.049 0.003 Induced Effects 1.032 15.1 0.664 0.045 Total Firms 727 Total Employees 6,957 Total Sales 1,357,429,719 Total Exports 407,228,916 Total Output Impacts Total Employment Impacts (jobs) Total Value Added Impacts Total Indirect Business Tax Impacts Indirect Output Impacts $34,658,439 Induced Output Impacts $420,450,417 Total Impacts $855,550,622 13,527 $641,711,244 $243,103,174 67 References 2002 Census of Agriculture: Alabama State Level Data, prepared by the National Agricultural Statistics Service, USDA, 2004. 2002 Alabama Green Industry Survey, Auburn University Department of Agricultural Economics and Rural Sociology, Alabama Cooperative Extension System, 2003. Alabama Agricultural Statistics, Bulletin 46, prepared by Alabama Statistical Office, Montgomery, AL, 2004. Bureau of Economic Analysis Regional Economic Accounts, Alabama Gross State Product, 2002, December 2004. Dillman, Don A. Mail and Internet Surveys: The Tailored Design Method. 2 nd Edition, New York ,John Wiley and Sons, INC, 2000. Hall, Charles. ?Tennessee Green Industry Facts,? Horticulture Business Information Network, University of Tennessee Extension, 2004. Hodges, Alan W. and John J. Haydu. ?Economic Impacts of the Florida Environmental Horticulture Industry,? Economic Information Report EI 02-3, University of Florida Institute of Food and Agricultural Sciences, Gainesville, FL, 2002. Miller, Ronald E. and Peter D. Blair. Input-Output Analysis: Foundations and Extensions. Englewood Cliffs, NJ, Prentice-Hall, Inc., 1985. Minnesota IMPLAN Group, Inc., IMPLAN Professional Version 2.0, Stillwater MN, 1999. Mulkey, David and Alan W. Hodges. ?Using IMPLAN to Assess Local Economic Impacts,? University of Florida Institute of Food and Agricultural Sciences, Gainesville, FL, 2002. Pinel, Raul A., Roger A. Hinson, David W. Hughes, and Roberto Navajas. ?Establishing the Economic Impact of the Green Industry on Louisiana?s Economy,? presented to the Southern Agricultural Economics Association Annual Meeting, Mobile, AL, 2003. 68 II. MIGRANT LABOR IN ALABAMA?S HORTICULTURE INDUSTRY Moriah Bellenger, Deacue Fields, and Diane Hite Introduction The green industry, comprised of horticultural goods and services plays an important role in the state of Alabama. A recent statewide economic impact study finds that in 2002 the industry generated roughly $2.0 Billion and is credited with over 30,000 state jobs (Bellenger and Fields). The green industry inherently adds to the aesthetic beauty of the state, and its products are also exported throughout the world. This study examines and evaluates the role of migrant workers within the industry, specifically their effects on average wages and worker productivity. Due to the perishable nature of horticultural goods, a skilled and accessible labor supply is imperative for continued industry growth. The variation in labor composition among producers statewide, from local to migrant, highlights the need to study the use of migrant labor in the horticulture industry. What factors influence a producer?s decision to hire migrant rather than local workers? Do migrant workers depress wages, as is often feared by local workers? Finally, how do migrant workers affect productivity within a firm? These research objectives will be explored using data from a 2002 survey of Alabama green industry producers. A log-linear seemingly unrelated regression (SUR) 69 model is employed to estimate these relationships, coupled with a detailed imputation of missing survey data, and Heckman?s (1979) two-stage test for sample selection bias. Background The United States and the South in particular, have a long history of importing agricultural workers to meet seasonal demands for labor. Today, producers? hiring practices are regulated by the Immigration Reform and Control Act of 1986 (IRCA), and agricultural labor is specifically regulated by IRCA section H2-A, known as the H2-A program. IRCA grants temporary H2-A visas to foreign workers based on two conditions, intended to both insure access to labor for producers, and protect local workers from wage decline due to a labor surplus. To procure H2-A visas, producers must demonstrate to the U.S. Department of Labor that: (A) There are not sufficient workers who are able, willing, and qualified, and who are available at the time and place needed, to perform the labor or services involved in the petition, and (B) The employment of the alien in such labor or services will not adversely affect the wages and working conditions of workers in the U.S. similarly employed Despite the above provisions, both producers and U.S. workers voiced concerns with the passage of IRCA. The H2-A program provided legal status to a large number of existing migrant workers. Producers feared that these workers would transition out of agriculture into other sectors of the economy, which would restrict their labor supply, placing upward pressure on wages. U.S. workers feared the opposite, that legalization through the H2-A program would attract even more workers to cross the border, which 70 would lead to a labor surplus, depressing both wages and working conditions (Gunter et. al.; Paga?n; Perloff et. al.; Thompson and Wiggings). The present study uses data from a recent survey of 2002 Alabama green industry producers. The research objectives were to estimate the effects of migrant labor on employee wages and worker productivity. In addition, stated producer concerns contained within the survey are used to evaluate hiring decisions. Few similar studies can be found in the existing economic literature. Ise and Perloff find that documentation among migrant workers significantly influences both wages and hours. Using data from the National Agricultural Worker?s Survey, the authors find that unauthorized workers, as well as those with amnesty earn lower wages than their U.S. counterparts. The current literature lacks both an analysis of migrant workers and productivity, as well as any evaluation of producer decisions to hire migrant versus local labor. Data This study examines data drawn from a 2002 survey of Alabama green industry producers (See Appendix A). The survey was administered based on Dillman?s tailored design methodology. Mailing lists were acquired from the Alabama Department of Agriculture and Industries (ADAI) for nursery and greenhouse growers, nursery stock dealers, and licensed lawn and landscape service providers. Membership and mailing lists from the Alabama Nurserymen?s Association and Alabama Turf Grass Association were used to verify and update ADAI lists. 71 The survey instruments were developed and pre-tested based upon other instruments found in relevant literature. Support paragraphs from the Commissioner of Agriculture, Alabama Cooperative Extension System Director, Alabama Nurserymen?s Association President, and Alabama Turf Grass Association President were included on the inside cover of each survey. The Dillman format was used to develop a cover letter, which was personally addressed and included in each survey. Table 1 presents information on mailing and response rates for each sector surveyed. A pre-survey postcard was mailed to the population of all sectors. This was done as a first contact to prepare individuals for the upcoming survey and to identify incorrect addresses before surveys were mailed. More than 100 surveys were returned with incorrect addresses and these were excluded from the survey mail out. After the initial survey mailing, a follow up postcard was sent as a reminder/thank you, then a second survey was mailed. Table 1 shows that response rates ranged from 13.5% for lawn and landscape services to 27.9% for turf grass and sod producers. Blank surveys and surveys with limited information were excluded from the number of completed responses. Some common responses on incomplete and/or blank surveys - were ?no longer in business?, ?involved in other activities not related to the green industry?, ?and not considered a commercial operation.? 72 Table 1. Summary of Survey Administration Sector Pre-survey Postcard Surveys Mailed Total Responses Completed Responses Response Rate Nursery and Greenhouse 851 822 158 114 13.9% Lawn and Landscape Services 1,430 1403 243 190 13.5% Turfgrass and Sod 64 61 24 17 27.9% TOTAL 2345 2286 425 321 14.0% The survey findings are reported based upon the 321 completed responses, and they are not expanded to make inferences about the entire population. The total number of respondents represents 14.0% of the firms participating in green industry activities, which provides some indication of the overall size of the industry. While primary data collection offers many advantages, practicality places limitations on the amount and detail of information that can be accessed, when compared to larger national samples. Wage information contained within the survey represents average wage levels for each firm, rather than individual employee wages. Wage levels were computed by dividing the total number of man-hours (the product of total employees and average hours) worked into the total payroll for both seasonal/part time and full time employees. Employees are classified as either full time (FT) or seasonal/part time (SPT), but the survey does not identify which employees are local and which are migrant workers. Instead, producers were asked to estimate the percent of their total employees that are local, and the percent of their total employees that are migrant workers. Producers were not asked to provide any socioeconomic information for their employees, on either individual or aggregate levels. Instead, survey respondents were matched to county level 73 census data for education and employment levels, as a proxy for education levels within the firm and the local labor supply faced by producers. Sample selection bias poses another potential weakness in any voluntary response mail survey analyzed through ordinary least squares (Hite; Greene). The data used in this study is drawn exclusively from respondents, and firms with certain traits may have a greater tendency to respond than others. Heckman?s two-stage estimation method is used to determine the level of selection bias in this sample. The first stage uses a probit model where y=1 for respondents and y=0 for nonrespondents. The original mailing list containing 2286 addresses was matched to county level census data for median household income, education, and unemployment levels. These local demographic indicators, along with sector identity variables (Nursery and Greenhouse, Lawn and Landscape, and Turfgrass and Sod) are used to explain each firm?s decision to respond. The respondents were matched by county and sector to the original mailing list for the resulting probit model Pr(Response) = f(demographics, sector) + ?. The Inverse Mills Ratio or ? is then computed from the probit coefficients for each observation as ? = ?(??X i )/ ?(??X i ), where ? is the conditional probability of response based on the ratio of ?(.), the probability density function to ?(.), the cumulative density function. ? is computed as ?/? for y=1 and -?/ (1- ?) for y=0 (Greene, 1993). The probit results are listed in Table 1 of Appendix B. 74 The second stage of estimation for sample selection bias imports ? into the linear model, such that Y ij = ??X ij + ?? i + e i , where Y is the dependent variable (j) for each observation (i), ? is the vector of coefficients corresponding to X, the matrix of explanatory variables, and ? is the coefficient corresponding to ?. Thus, the determination of sample selection bias depends upon the significance of ?. One final limitation of mail surveys lies in missing data. Of the 321 completed responses, approximately 160 observations lacked one or more answered components to the labor and sales portions of the survey, necessary for analysis in this study. A series of linear regressions was used to impute missing values within the completed responses. The missing variables of interest were: A) Percent Migrant. This variable represents the percentage of total employees comprised by migrant labor. B) Seasonal/ Part Time Wage. This variable represents the average hourly wage rate earned by the firm?s seasonal and part time employees. C) Full Time Wage. This variable represents the average hourly wage rate earned by the firm?s full time employees. D) Seasonal/ Part Time Employees. This variable represents the total number of seasonal and part time employees. E) Full Time Employees. This variable represents the total number of full time employees. F) Gross Sales. This variable represents each firm?s gross sales in 2002. 75 The missing values were imputed using a least squares estimator such that, Predicted Value ij = ' ? ? X ij + ? i , where ? ? is the parameter vector and X represents the matrix of explanatory variables for each observation (i) and variable of interest (j). ? represents the error term. The least squares estimator was then used to predict the missing values such that, Missing Value ij = Predicted Value ij. The estimation was iterated until no new missing values could be predicted at the 0.05 significance level. This imputation process resulted in approximately 60 additional observations for a final data set containing 218 usable observations. Table 1 of Appendix B briefly explains the variables used in this study. Tables 2 and 3 contain descriptive statistics for both the original and predicted data sets. Methodology A log-linear seemingly unrelated regression model, known as the SUR Model (Zellner) is employed to estimate both the effects of migrant labor on wages and productivity, as well as producer decisions to hire migrant versus local workers. A log model is used in consensus with prevailing labor theory, drawing on Roy?s lognormal model. Intuitively, wages and earnings will always be positive, as is the log normal distribution. A system of equations is preferred to separate OLS equations because the dependant variables in this study share many common explanatory variables. Information would be lost in separate equations, which assume that the error terms are uncorrelated. The SUR Model allows for the correlation of error terms between 76 equations, and better reflects the interrelated nature of the dependant variables in this study. The SUR Model can be written formally as Y = X? + ?. Where Y is a (j x 1) vector of (j) dependant variables, X is a (j x n) matrix of (n) explanatory variables, ? is a (j x 1) vector of unknown coefficients, ? is the (j x 1) random error vector with ? ~ N (0,?), and ? is the (j x j) covariance matrix. The resulting system contains four equations, the first of which estimates percent migrant as a function of industry sector, producer concerns, labor supply, and firm size. The second and third equations estimate seasonal/ part time and full time employee wages as a function of industry sector, percent migrant, education and labor supply. The final equation estimates worker productivity, via the ratio of sales per worker, as a function of industry sector, percent migrant, wages, total employees and education. The Inverse Mill?s Ratio (IMR), representing ?, is included in each equation to complete the second stage test for sample selection bias. The equations can be written as LnPercent Migrant=? 1 + ? 2 Lawn + ? 3 Turf + ? 4 Federal Funding + ? 5 Total Employees + ? 6 IMR + ? 7 Unemployment + ? 8 Labor Shortage LnSPT Wages=? 1 + ? 2 Lawn + ? 3 Turf + ? 4 Percent Migrant + ? 5 IMR + ? 6 Education + ? 7 Labor Shortage LnFT Wages=? 1 + ? 2 Lawn + ? 3 Turf + ? 4 Percent Migrant + ? 5 BPW + ? 6 IMR + ? 7 Education + ? 8 Labor Shortage 77 LnSales per Worker=? 1 + ? 2 Lawn + ? 3 Turf + ? 4 Percent Migrant + ? 5 SPT Wages + ? 6 FT Wages + ? 9 Total Employees + ? 10 IMR + ? 11 Education. A unique component of the survey examines producers? attitudes and concerns regarding a variety of labor issues. Producers were asked: A) To rate their support of a federally funded program to hire local labor, rather than migrant labor B) To rate the level of threat to the industry posed by government regulation C) To rate the level of threat to the industry posed by lack of management D) To rate the level of threat to the industry posed by labor shortage E) To rate the level of threat to the industry posed by labor cost Producers chose either 1) strongly disagree 2) disagree 3) neither agree nor disagree 4) agree 5) strongly agree The firm?s decision to hire migrant workers is estimated as a function of the above producer attitudes, joined with previously explained indicators for firm size and local socioeconomic conditions. A correlation test revealed elevated correlation levels among the producer concerns, ranging from 0.34 to 0.66. To correct for sample correlation only the variables for federal funding and labor shortage are used to represent producer concerns. Producers who would support a federally funded program to hire local, rather than migrant labor, likely prefer local labor to migrant labor. It is predicted that producer attitudes regarding possible federal funding of local labor will be negatively related to the hiring of migrant labor. The number of total employees should relate positively to Percent Migrant. In addition to their greater demand for labor, larger firms may be better suited to the H2-A program. The H2-A application process may exact an inordinate level of resources to be worthwhile for producers seeking only marginal increases in their labor force. 78 A labor shortage provides the most explicit justification for hiring migrant, rather than local labor. It is predicted that concern for labor shortage will be positively related to Percent Migrant. The local unemployment level should reflect producer concerns regarding labor shortage. Lower unemployment levels may signal a restricted labor supply, forcing producers to seek migrant workers as a supplement to local labor. It is predicted that the local unemployment level will be inversely related to Percent Migrant. Based on the results of similar studies (Ise and Perloff; Hanson et. al.), Percent Migrant should be inversely related to both SPT and FT wages. Consistent with wage model literature, education should be positively related to wages for both SPT and full time workers. Rising producer concerns over labor shortages should signal a restricted labor supply within the industry, which would place upward pressure on wages. Thus, concern for labor shortages is expected to relate directly to both SPT and FT wages. Presumably, SPT workers are seldom eligible for employee benefits, such as health insurance and bonuses. A measure of benefits per worker (BPW) is included in the FT wage equation, but omitted from the SPT Wage equation. There is a likely tradeoff between employee benefits and wages (Rosen). More recently, Olsen (2002) found that workers accepted 20 percent lower wages in jobs with health insurance benefits than in jobs without benefits. Because employees may substitute lower wages in exchange for greater benefits, an inverse relationship between BPW and FT Wages is proposed. Sales per worker (SPW), the ratio of total sales to total employees provides a general estimate of worker productivity. Little attention has been paid within labor literature to the relative productivity levels of migrant versus local workers. However, a 79 recent study of Hispanic tree planters in Alabama (Casanova) does find that timber producers attribute a marked increase in worker productivity to greater levels of migrant labor within the industry. In addition, timber producers also expressed that migrant workers are often more reliable and easier to manage than local workers. Similarly, migrant labor is predicted to raise SPW in this study. Efficiency wage theory explains that producers may pay premium wages to prevent employee shirking and to motivate greater worker productivity (Akerlof). Wages exceeding the market clearing wage rate impose a greater opportunity cost to nonproductive employee behavior. In other words, workers earning higher wages have added incentive to maintain and excel in their jobs. This theory has recently been applied to the agricultural labor market by Moretti and Perloff, who found that agricultural producers substitute higher wages for increased managerial oversight. Consistent with efficiency wage theory, both SPT and FT wages should be directly related to SPW. Economies of scale posit that as firms grow, they are better able to substitute capital for labor in the production process, increasing worker productivity. This would suggest a positive relationship between the number of total employees and the rate of sales per worker. Convention places great value in education. Educational attainment represents an investment in human capital. Greater levels of human capital within the workforce should positively influence job performance, raising worker productivity. Heckman (1985) illustrates this relationship by mapping observed skills, including education and experience, to rates of task completion in both the manufacturing and nonmanufacturing labor force. In both cases he finds that higher education levels raise the level of task 80 completion, and with a greater magnitude than experience alone. Education is expected to increase SPW in this study as well. Results The SUR model results are listed in Tables 1-4 of Appendix C. A 0.05 critical value for probability is used to measure significance. There were a total of 218 observations and the model?s F-Statistic is 6.54, which renders it significant at the 0.05 level. In the log-linear model, because both the dependant and independent variables are logged, parameter estimates actually represent elasticities. Percent Migrant The coefficients for Total Employees, unemployment, and perceived labor shortage were all significant in the percent migrant equation. The model estimates a positive elasticity of 0.43 for total employees, meaning that a one percent increase in a firm?s total number of employees results in a 0.43 percent increase in the firm?s percentage of migrant workers. This supports the hypothesis that larger firms may be better suited to the H2-A program, in that they may be better equipped administratively for the application process. The H2-A program also imposes several fixed costs, such as housing and transportation, which can be more efficiently spread over many, rather than fewer employees. Consistent with wage theory, a one percent increase in the local unemployment rate reduces percent migrant by roughly 1.1 percent. Higher local unemployment rates indicate an expanded labor supply, in which more people are actively seeking work. 81 Under these circumstances producers should better able to fill their labor needs within their local communities, a condition imposed by the H2-A program. Similarly, producers? perception of a local labor shortage is directly related to their decision to hire migrant versus local workers. A one percent increase in perceived labor shortage raises the firm?s percentage of migrant workers by 0.62 percent. Producer attitudes regarding possible federal funding to hire more local, rather than migrant workers appear to have no significant effect on their decision to hire migrant workers. At the time of this survey no such program existed in Alabama. Feelings for a hypothetical program may simply be irrelevant to producers who are forced to make tangible decisions for their firms on a daily basis. There is no evidence of sample selection bias at the 0.05 level, but bias can not be rejected at the 0.10 level of significance. Seasonal/ Part Time Wages Only the coefficients for percent migrant and perceived labor shortage are significant in the SPT wage equation. There is a negative and highly significant (P[|Z|>z] is 0.000) relationship between a firm?s percentage of migrant workers and its average seasonal/ part time wage. A one percent increase in the percentage of migrant workers lowers the average SPT wage 0.12 percent. Given the nature of the survey, it is impossible to interpret how this affects local and migrant workers separately. More specifically, it is unknown whether all employees, both migrant and local, earn lower wages, or if there is a wage differential between migrant and local workers. 82 A one percent growth in the perception of labor shortage by producers raises the SPT wage by 0.16 percent. This conforms to the labor theory construct that a constricted labor supply tends to inflate wages. Producers are forced to compete for employees by offering greater levels of compensation. Interestingly, education has no significant effect on wages for seasonal/ part time workers. This may be due in part to lower skill requirements or fewer responsibilities for part time jobs. Employee education levels may also be somewhat endogenous (Heckman, 1985). Workers with certain levels of education, i.e. education levels appropriate for specific tasks, may self select into specific jobs. However, because the education variable in this study represents county high school graduation rates, rather than individual education levels, the lack of significance can more likely be attributed to generality rather than endogeneity. The coefficient for IMR is also insignificant, which rejects the presence of sample selection bias in the SPT wage equation. Full Time Wages As in the SPT wage equation, an inverse relationship exists between percent migrant and full time wages. A one percent increase in percent migrant lowers the average full time wage rate by 0.16 percent and is also highly significant There may be a somewhat magnanimous interpretation, rather than a substitution effect, for benefits. A one percent increase in BPW corresponds to a 0.02 percent raise in average full time wages. Firms providing greater levels of benefits may also be more likely to provide higher wages, rather than substitute benefits for wages. These firms may simply choose to offer higher levels of compensation than other firms for SPT labor. 83 Consistent with wage literature, education and perceived labor shortage are positively related to wages in this model. A one percent increase in the local high school graduation rate raises average full time wages by 0.67 percent. Likewise, a one percent increase in perceived labor shortage raises the average full time wage by 0.06 percent. There is no evidence of sample selection bias at the 0.05 level, but bias can not be rejected at the 0.10 level of significance. Sales per Worker As expected, percent migrant and wages are all positive and highly significant in the SPW equation. A one percent increase in percent migrant raises SPW by 0.80 percent. This supports previously mentioned producer expectations in the Alabama forestry sector. A one percent increase in the average seasonal/ part time wage rate raises SPW by 1.97 percent, while the same increase for full time employees raises SPW by 5.37 percent. This supports the efficiency wage theory premise that greater rates of compensation provide an incentive for workers to be more productive. Neither total employees nor education are significant in the SPW equation, and there is no evidence of sample selection bias. Conclusion This study confirms the fears expressed by local workers with the advent of the H2-A program. The inclusion of migrant labor in the green industry workforce does appear to lower wages, for both seasonal/ part time and full time employees. The 84 estimated elasticities between a firm?s percentage of migrant workers and its average respective wage rates range from -0.12 to -0.16 for seasonal/ part time workers and full time workers. A survey of individual employees, containing both demographic and wage information could reveal more significant relationships between migrant status, socioeconomic indicators, and wages. In this study, data for migrant status and wages/hours were derived from average levels reported by producers. Information for individual workers could render greater differentials in wages/hours between migrant and local workers. Socioeconomic indicators in this study were weakly proxied using county level census data. Individual education levels may be significantly related to wages for SPT employees, even if local education levels are not significant. Producer decisions to hire migrant workers are dictated not only by the local labor supply, but also by firm size. The H-2A application process and the program?s resulting worker provisions may exact an inordinate toll on smaller firms. This conundrum lends itself to a future cost benefit analysis. According to their size, which firms would actually benefit from hiring migrant workers? There are apparent gains to productivity in hiring migrant workers, and paying higher wages to both seasonal/ part time and full time employees. These gains from migrant workers mirror recent findings in Alabama?s forestry sector, while wage related gains are in line with efficiency wage theory expectations. Increased productivity due to migrant workers, coupled with wage differentials in the literature, and lower average wages in this study, poses a question of equity. The H-2A program requires that migrant workers be paid the prevailing wage rate. This is an industry that is often physically demanding of its workers, and summer in Alabama can be unrelenting. 85 While previous studies have found consistent wage differentials between migrant and local workers, this is the first known study to examine the effects of migrant labor on average wage levels. While this decision to examine average wage rates was dictated by the available data, it does raise an important question for future study of migrant labor in economics. Specifically, it leads research beyond the determination of wage differentials between migrant and local workers, to also examine the effects of migrant labor on local wage rates. This study could also be enhanced with the use of time series data to examine the effects of IRCA. The data used in this study provides only information for 2002. Longitudinal data could reveal trends in wages, hours, and percent migrant before and after the implementation of IRCA. An intervention model using national data before and after 1987 could be measured for migrant labor, wages, and worker productivity. It would also be interesting to examine whether producer and local labor attitudes have changed after nearly a decade under IRCA. Such a study would have greater policy implications in evaluating the effects of and need for IRCA. 86 Appendix A Green Industry Producer Surveys Nursery and Greenhouse Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 105. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 106. Please indicate the types of products grown by listing the dollars earned or percent of total nursery sales they represent: Type Of Crop Dollars Or % of Sales Foliage $ % Bedding plants $ % Potted flowering plants $ % Herbaceous plants $ % Greenhouse Crops Vegetable transplants $ % Container-grown shrubs $ % Container-grown trees $ % Field-grown shrubs $ % Field-grown trees $ % Container grasses and ground cover $ % Perennials $ % Nursery Crops Roses $ % Turf Grass Crops % Christmas Trees % Propagation Materials (liners, plugs, tissue culture, etc.)-for sale only $ % Other (Specify) $ % TOTAL 100% 107. How much area of production space does your nursery utilize at this general location (include aisles, driveways, and walkways): (a) _______acres of nursery bed space in the open (b) _______sq. ft. of greenhouse or shade house enclosed 108. Please indicate the percentage of your labor force that comes from the following sources. (Total should add up to 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor_______% (d) Local Labor______% 109. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire. (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 87 110. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 111. What is your annual cost for the following employee-related coverage? (e) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 112. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 113. What percent of your total firm sales are made to buyers outside of Alabama __________%? 114. In which places do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (e) Other Southeast (g) Northeast (i) International_______________ (b) Florida (d) Georgia (f) Southwest (h) Northwest 115. In what county or counties is your operation located? ____________________ _____________________ _______________________ (Over please ? more on reverse side) 116. Please provide a ?best estimate? of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent or Percent of Sales Containers $ % Soil mixes $ % Propagation stock (seed, cuttings, plugs, tissue culture plantlets, etc.) $ % Plants purchased from other growers $ % Pesticides (all agri-chemicals) $ % Fertilizers (synthetic and organic) $ % Hardscape material (irrigation etc.) $ % Equipment (purchases, leases, maintenance, and repairs) $ % Facilities (purchases, leases, maintenance, and repairs) $ % Shipping and transportation $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 88 117. In order to estimate the total size of the grower sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 118. Please provide a ?best estimate? of the percentage of your total sales to the following sources? (Total should add up to 100%.) Categories Percent of Total Sales Directly to the Public % Municipalities % Retail Nursery/Garden Centers % Retail Mass Merchandisers % Re-wholesalers (brokers, other growers, etc.) % Landscape Contractors % Lawn and Landscape Installation and Maintenance Firms % Florists % Arborists % Other (Specify) % TOTAL 100% 119. Please provide an estimate of your annual water usage. _________gallons. What percentage of your water used comes from: (a) Private Well______% (b) Natural Surface ______% (c) Recaptured _______% (d) City/County ______% 120. What percentage of your company?s marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, brochures, etc.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 89 121. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition by plant substitutes 1 2 3 4 5 Competition from imported plants 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 90 Turfgrass and Sod Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 122. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 123. Please indicate the level of turfgrass production in acres for your operation: Type Of Production Certified Non-Certified Sod acres acres Sprigs acres acresProduction Seed acres acres Fescue acres acres Bermuda acres acres Centipede acres acres Zoysia acres acres St. Augustine acres acres Types of Turf Other (Specify) acres acres TOTAL acres acres 124. How much do you plan to change your acreage in turf production over the next five years? ___________acres Increase Decrease 125. Please indicate the percentage of your labor force that comes from the following sources. (Total should add up to 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor_______% (d) Local Labor______% 126. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire? (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 127. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 128. What percent of your total firm sales are made to buyers outside of Alabama ________%? 129. In which places do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (e) Other Southeast (g) Northeast (i) International_______________ (b) Florida (d) Georgia (f) Southwest (h) Northwest 91 130. What is your annual cost for the following employee-related coverage? (f) $______Medical/dental (b) $______Life insurance (c) $______Worker?s comp (d) $__________Bonuses 131. Please provide an estimate of your annual water usage. _________gallons. What percentage of your water used comes from: (a) Private Well______% (b)Natural Surface ______% (c) Recaptured______% (d) City/County ______% 132. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 133. In what county or counties is your operation located? ____________________ _____________________ _______________________ (Over please ? more on reverse side) 134. Please provide a ?best estimate? of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent Or Percent of Sales Shipping and transportation $ % Equipment repairs and maintenance $ % Equipment purchases and leases $ % Plant material purchased $ % Fuel $ % Pesticides $ % Fertilizers $ % Other Chemicals $ % Telephone and other communication $ % Soil Fumigation $ % Hardscape materials (irrigation, etc.) $ % Advertising and marketing $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 135. In order to estimate the total size of the grower sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above 92 136. Please provide a ?best estimate? of the percentage of your total sales to the following sources? (Total should add up to 100%.) Categories Percent of Total Sales Directly to the Public % Golf Courses % Municipalities % Retail Nursery/Garden Centers % Retail Mass Merchandisers % Re-wholesalers (brokers, other growers, etc.) % Other Turfgrass Producers % Greenhouse Growers % Landscape Contractors % Landscape Installation and Maintenance Firms % Lawn Care and Maintenance Firms % TOTAL 100% 137. What percentage of your company?s marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, brochures, etc.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 138. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition from new firms 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor costs 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 93 Lawn and Landscape Survey Your informed BEST ESTIMATES are sufficient for this survey. Exact figures from records are not required. 139. What is your current business structure? (a) Sole proprietorship (b) Corporation (c) Partnership (d) Limited Liability Company (LLC) 140. Please report dollars earned or percentage of sales for the following products or services: (Use the most convenient estimate.) Type Of Service/Material Dollars Earned Or Percent Of Sales Landscape design services $ % Landscape installation services $ % Landscape maintenance services $ % Lawn care and maintenance services $ % Sub-contracts: design, maintenance, and service $ % Irrigation installation or contracting $ % Live Plants $ % Horticultural supplies, equipment or hard goods $ % Other (Specify) $ % TOTAL $ 100% 141. Please indicate the percentage of your labor force that comes from the following sources. (Total should equal 100%) (a) H-2A Program______% (b) H-2B Program______% (c) Other Migrant Labor______% (d) Local Labor______% 142. A state or federally funded skills training program for the local labor force would increase the amount of local labor you hire? (a) strongly disagree (b) disagree (c) neither agree nor disagree (d) agree (e) strongly agree 143. Please indicate the number of employees and managers in your Alabama operations in 2002 by type: Type of Employee Number of Employees Payroll (excluding benefits) Average Weeks Worked per Year Average Hours per Week Seasonal or Part Time Production $ Full Time Production $ Permanent Management and Clerical $ Sales Staff $ 144. What is your annual cost for the following employee-related coverage? 145. $____________Medical/dental (b) $_________Life insurance (c) $___________Worker?s comp (d) $__________Bonuses 146. What percent of your firm?s work and/or services is provided for customers outside of Alabama __________%? 147. In which states do you have out-of-state sales? (Check all that apply) (a) Tennessee (c) Mississippi (c) Other_____________________ (b) Florida (d) Georgia 94 148. Please give an estimate of planned expenditures on major construction or equipment purchases for 2003. $__________________Equipment $________________Construction 149. By what percentage do you expect you business volume to change over the next 5 years? ___________% Increase Decrease 150. In what county or counties is your operation located? ____________________ _____________________ _______________________ 151. In order to estimate the total size of the landscape sector in Alabama, please give your firm?s total gross sales in 2002? Choose the appropriate category or enter the value here $______________________. (These figures are strictly confidential and will be used for survey totals only.) (a) Less than $100,000 (e) $400,000 to $499,999 (i) $2,000,000 to $2,999,999 (b) $100,000 to $199,999 (f) $500,000 to $749,999 (j) $3,000,000 to $3,999,999 (c) $200,000 to $299,999 (g) $750,000 to $999,999 (k) $4,000,000 to $4,999,999 (d) $300,000 to $399,999 (h) $1,000,000 to $1,999,999 (l) $5,000,000 or above (Over please ? more on reverse side) 152. Please give your best estimate of your annual expenditures as a percent of total sales or dollars spent annually (whichever is most convenient): These figures are strictly confidential and will be used for survey totals only. Item Dollars Spent Or Percent of Sales Material Expenses (costs of resale materials such as plants, mulches, sod, seed, etc.) $ % Equipment repairs and maintenance $ % Equipment purchases and leases $ % Fuel $ % Pesticides $ % Fertilizers $ % Other Chemicals $ % Telephone and other communication $ % Hardscape materials (irrigation, etc.) $ % Facilities (mortgages, leases, maintenance, and repair) $ % All overhead items (utilities, insurance, interest, etc.) $ % Other (specify): $ % TOTAL $ 100% 153. What percentage of your total sales/services was to the following sources? (Please make sure the percentage sums to 100%. For example, if total sales came equally from two categories, then write in 50% in the blank next to each). Categories Percent of Total Sales Homeowners % Apartments and condominiums % Commercial establishments (restaurants, hotels, cemeteries, etc..) % Governments % Builders and developers % Other landscapers, interiorscapers or lawn maintenance firms % Other (Specify) ____________________ % TOTAL 100% 95 154. What percentage of your company?s advertising/marketing budget is allocated to the following marketing practices? _____% Personal Selling ______% Printed Advertising Media (newspaper, brochures, etc.) _____% Commissioned Salespersons ______% Radio or Television Advertising _____% Promotions ______% Computer Website _____% Trade Shows ______% Direct Mail _____% Trade Magazine Advertising ______% Other (Specify)_________________ 155. Do you agree that the following threats facing your industry are important? Please rate the importance on a scale of 1 to 5, where: 1=strongly disagree, 2=disagree, 3=neither agree nor disagree, 4=agree, and 5=strongly agree (Please circle the appropriate rating) Drought and water use restrictions 1 2 3 4 5 Low prices for product or service 1 2 3 4 5 Increasing costs of production 1 2 3 4 5 Unlicensed competitors 1 2 3 4 5 Increasing equipment costs 1 2 3 4 5 Restrictions on use or reduced availability of chemicals 1 2 3 4 5 Competition by plant substitutes 1 2 3 4 5 Market power of large retail chains 1 2 3 4 5 Government regulations 1 2 3 4 5 OSHA requirements 1 2 3 4 5 Local, State, and Federal taxes 1 2 3 4 5 Lack of professionalism 1 2 3 4 5 Lack of business management training 1 2 3 4 5 General economic conditions 1 2 3 4 5 Labor shortage 1 2 3 4 5 Direct and indirect labor cost 1 2 3 4 5 Increasing energy costs 1 2 3 4 5 AGAIN, THANKS FOR YOUR COOPERATION! 96 Appendix B Descriptive Statistics Table 1. List of Explanatory Variables included in the SUR Model Variable Explanation Lawn and Landscape Dummy variable indicating whether the respondent is a member of the lawn and landscape sector (= 1 if a member, 0 otherwise) Nursery and Greenhouse Dummy variable indicating whether the respondent is a member of the nursery and greenhouse sector (= 1 if a member, 0 otherwise) Turfgrass and Sod Dummy variable indicating whether the respondent is a member of the turfgrass and sod sector (= 1 if a member, 0 otherwise) Percent Migrant The percentage of each respondent?s labor force composed of migrant workers SPT Wage The average hourly wage rate paid to seasonal and part time workers in each firm FT Wage The average hourly wage rate paid to full time workers in each firm Total Employees Each firm?s total labor force Benefits The total amount paid for employee benefits in each firm BPW The average amount of benefits per worker in each firm (= Benefits/ Total Employees) Education The Census county level figure for the percent of the population with a high school degree or greater Unemployment The Census county level figure for the percent of the population considered unemployed Median Income The Census county level figure for median household income Gross Sales The total sales reported by each firm SPW The average level of sales per worker in each firm (Gross Sales/ Total Employees) Government Regulation The level of threat perceived by producers attributed to existing government regulations Lack of Management The level of threat perceived by producers attributed to a lack of management in the industry Labor Shortage The level of threat perceived by producers attributed to a labor shortage in the industry Federal Funding Respondents? level of support regarding a prospective federal program to fund the increased hiring of local workers IMR Variable representing the Inverse Mill?s Ratio to test for sample selection bias 97 Table 2. Initial Survey Descriptive Statistics, 2002 Variable Mean Std.Dev. Minimum Maximum Observations Lawn and Landscape 0.59 1,456 0.00 1.00 321 Nursery and Greenhouse 0.36 1,455 0.00 1.00 321 Turfgrass and Sod 0.05 1,455 0.00 1.00 321 Percent Migrant 10.03 1,577 0.00 100.00 291 SPT Wage 9.24 2,781 0.00 69.44 117 FT Wage 9.76 2,756 0.00 43.27 119 Total Employees 9.50 1,745 1.00 110.00 251 BPW 1,171 4,151 0.00 10,000 251 Education 76.85 1,654 59.50 86.80 298 Unemployment 3.65 1,541 2.10 6.40 298 Median Income 35,737 56,823 16,646.00 55,440 298 Gross Sales 655,877 3,709,420 2,000.00 60,000,000 302 SPW 53,696 112,691 0.00 645,161 251 Government Regulation 3.33 1,460 1.00 5.00 321 Lack of Management 3.22 1,459 1.00 5.00 321 Labor Shortage 3.28 1,459 1.00 5.00 321 Labor Cost 3.49 1,460 1.00 5.00 321 98 Table 3. Estimated Labor Sample Descriptive Statistics, 2002 Variable Mean Std.Dev. Minimum Maximum Observations Lawn and Landscape 0.60 0.49 0.00 1.00 218 Nursery and Greenhouse 0.34 0.47 0.00 1.00 218 Turfgrass and Sod 0.06 0.24 0.00 1.00 218 Percent Migrant 13.82 25.24 1.00 100.00 218 Federal Funding 2.77 1.10 1.00 5.00 218 SPT Wage 9.58 6.19 3.52 69.44 218 FT Wage 10.08 3.42 4.34 41.67 218 Total Employees 9.43 12.99 1.00 93.00 218 BPW 1,107 1,734 0.00 11,046 218 IMR 1.77 0.13 1.21 2.05 218 Education 76.95 6.26 60.50 86.80 218 Unemployment 3.68 0.79 2.10 6.30 218 Median Income 35,670 5,975 19,819 55,440 218 Gross Sales 808,705 4,131,640 4,500 60,000,000 218 SPW 56,717 65,208 1,400 64,5161 218 Government Regulation 3.46 1.07 1.00 5.00 218 Lack of Management 3.26 1.15 1.00 5.00 218 Labor Shortage 3.43 1.22 1.00 5.00 218 Labor Cost 3.71 1.11 1.00 5.00 218 99 Appendix C Estimation Results Table 1. Sample Selection Probit Results Variable Coefficient Std. Error Test Statistic P[|Z|>z] Constant -2.256 0.529 -4.264 0.000 Education 0.000 0.011 -0.039 0.969 Unemployment 0.151 0.062 2.461 0.014 Median Income 0.000 0.000 0.864 0.387 Turfgrass and Sod 0.515 0.196 2.629 0.009 Lawn and Landscape 0.036 0.079 0.450 0.652 Chi-Squared 13.952 Degrees of Freedom 5 Observations 2284 Table 2. Log-Linear Estimates for Percent Migrant in Alabama?s Horticulture Industry, 2002 Variable Coefficient Std. Error Test Statistic P[|Z|>z] Constant 4.148 2.127 1.950 0.051 Lawn and Landscape -0.701 0.227 -3.085 0.002 Turfgrass and Sod -1.634 0.846 -1.932 0.053 LN Federal Funding -0.044 0.133 -0.332 0.740 LN Total Employees 0.430 0.067 6.408 0.000 LN IMR -4.632 2.731 -1.696 0.090 LN Unemployment -1.098 0.494 -2.221 0.026 LN Labor Shortage 0.619 0.193 3.212 0.001 F-Statistic 6.54 Probability Value 0.000 100 Table 3. Log-Linear Estimates for Seasonal and Part Time Wages in Alabama?s Horticulture Industry, 2002 Variable Coefficient Std. Error Test Statistic P[|Z|>z] Constant 2.947 1.441 2.045 0.041 Lawn and Landscape -0.090 0.065 -1.374 0.169 Turfgrass and Sod 0.088 0.205 0.431 0.667 LN Percent Migrant -0.119 0.014 -8.211 0.000 LN IMR 0.107 0.611 0.175 0.861 LN Education -0.194 0.308 -0.631 0.528 LN Labor Shortage 0.156 0.057 2.755 0.006 Table 4. Log-Linear Estimates for Full Time Wages in Alabama?s Horticulture Industry, 2002 Variable Coefficient Std. Error Test Statistic P[|Z|>z] Constant 0.104 1.116 0.094 0.925 Lawn and Landscape -0.241 0.051 -4.700 0.000 Turfgrass and Sod -0.396 0.161 -2.454 0.014 LN Percent Migrant -0.163 0.011 -14.653 0.000 LN BPW 0.016 0.003 6.079 0.000 LN IMR -0.902 0.479 -1.881 0.060 LN Education 0.660 0.238 2.775 0.006 LN Labor Shortage 0.064 0.027 2.368 0.018 Table 5. Log-Linear Estimates for Sales Per Worker in Alabama?s Horticulture Industry, 2002 Variable Coefficient Std. 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