CSU professors Greg Perry and James Pritchett developed the Agribusiness Friendliness Index to describe the economic climate for agriculture, which is impacted by climate, local and state government policies, geography and other factors more than other business sectors.

The index is based on 38 variables, representing regulatory policy, tax policy, government efficiency, impact of key government services, and the overall state business climate. It follows the methodology of other key indexes like the State Business Tax Climate Index.

States rated at the top of the study's Meats and Livestock Products Index included South Dakota, Colorado, Montana, Wyoming and North Dakota among the top five. They were followed by Kansas, Ohio, Massachusetts, Virginia and New Hampshire to round out the top 10.

Perry and Pritchett believe this is the first study of its kind, focusing exclusively on the agricultural sector.

“The Agribusiness Friendliness Index illustrates the different ways government influences the economic climate of agriculture and its allied businesses,” Perry said. “State governments play a particular role in fostering agribusiness opportunities and influencing cost structures with policies that include regulation, taxes and government services.”

Pritchett agreed.

“Businesses are acutely aware of the role that state government plays in their success – a business-friendly environment will encourage these enterprises to locate or expand operations while unfriendly polices shrink business and may even cause relocation,” he said.

Perry and Pritchett divided agricultural activities into four separate categories and then examined specific variables in each of those areas. The team evaluated how each state fared in those categories and used that information to calculate an overall score.

The four categories are:

• Agricultural inputs (e.g., fertilizer, chemical, equipment, seed dealers)
• Crop, fruit and vegetable production
• Meat and livestock products
• First level agricultural processing