UK agriculture in the wider economy: The importance of net SAM linkage effects

The paper investigates the linkages between UK agriculture and the wider economy using a modified version of a SAM Leontief model. Through multiplier decomposition, the nature and significance of the 'net SAM linkage effects' of agriculture (effects excluded from an input-output analysis of the economy) are examined. The empirical results suggest that the net SAM linkage effects of the agricultural and food accounts are relatively small. However, they illustrate differences between agricultural commodities which derive from not only the structure of production, but also the distribution of factor incomes and the pattern of consumer demand in the economy. Further, the SAM linkage effects are found to be significant in determining the magnitude of benefits that leak from the farm sector to the wider economy.