Colorado Ranks in the Top 10 of the Agribusiness Friendliness Index

Colorado’s positive economic growth earned it third place on a new Colorado State University index listing the most agribusiness-friendly states in America.

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 different 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.

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

“The Agribusiness Friendliness Index illustrates the different ways that 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 created four separate sector specific indexes and then evaluated the different variables in each state to formulate an overall score.

The four indexes are:

• Agricultural inputs (e.g., fertilizer, chemical, equipment, seed dealers)
• Crop, Fruit and Vegetable Production
• Meat and Livestock Products
• First Level Agricultural Processing

States fared differently across all four indexes in part because of their base agricultural industry. For example the upper Great Plains had the strongest showing in the meats and livestock products index while the states with the highest scores for the agricultural processing index were split between the Great Plains and New England.

Colorado agribusinesses enjoy a number of favorable policies that contribute to a relatively high third place ranking in the overall index. Job churning (representing the percent of new jobs created relative to the state’s overall job base) is very high, reflecting good economic growth and vitality. Coloradoans live healthy, active lives, which contributes to the high ranking on the Well-Being Index. There are no additional ambient air quality standards above those set by the federal government. Colorado has right to farm laws and favorable worker’s compensation rates. State government is efficient with its tax revenues, there are no estate taxes and schools are well above average. Negatives include relatively high state sales taxes and the ease by which ballot initiatives can be used to create laws.

For more information about Colorado’s indexes, visit: