Local-based, alternativemarketing
strategy could
help save more small farms
Thomas W. Gray, Ph.D.
Rural Sociologist
USDA Rural Development
Author’s note: This article draws heavily
upon Growing Home: A Guide for
Reconnecting Agriculture, Food and
Communities, by Joanna Green and
Duncan Hilchey, Cornell Community, Food
and Agriculture Program, Ithaca, N.Y.
he long, historic trend in
U.S. agricultural development
has been toward
ever-fewer, larger farms
— a process some have likened to
being on a treadmill. Cycle after cycle,
fewer farmers on larger farms account
for increasing proportions of total production.
The process has been fueled
in-part by continued adoption of various
mechanical and chemical innovations.
These innovations (including
increasingly large tractors and machinery,
pesticides, herbicides and fertilizers)
permit greater tracks of land to be
farmed more intensively by fewer
farmers.
The sheer volume of products
produced from this system has been
so large that, even in the face of population
expansion and exports, prices
have tended to remain level or
decline.
Historically, farmers not able, or
unwilling, to get on the “industrializing
treadmill” have found survival difficult.
Many of these farms go fallow,
or are bought out by neighboring
farmers.
As an aftermath of these processes,
farm families displaced from their
farms tend to leave the local community.
An alternative path
Many rural sociologists — including
Thomas Lyson, Green and Hilchey of
Cornell, Steve Stevenson and Fred
Buttel of the University of Wisconsin,
Larry Yee and Gail Feenstra of the
University of California-Davis, among
others — say that an alternative to this
technologically intensive path of farming
began to emerge in the late 1970s,
called “alternative agriculture.”
This alternative farming path provides
strategies linking local production
to local and regional consumption,
without employing technologies
that require an increasing scale of production.
Ultimately, these approaches
seek to keep as many family farmers
operating as possible by improving
their economic returns.
Less emphasis is placed upon production
of commodities (de-commodification)
and on diversification (less
specialization). It involves finding
local and regional market niches,
rather than national and global markets.
This approach is often pursued
with an emphasis on producing nutritious,
safe food in a manner that is
environmentally sound. Explicit consideration
is given to the social, environmental
and economic links to the
local community.
This article has a twofold purpose:
1) to review some of the marketing
strategies used in these alternative
approaches, and 2) to draw implications
for cooperative organization.
Following are some alternative
farm marketing approaches being used
successfully:
- Community supported agriculture
— involves individual consumers in a
local community who pay an annual
membership fee to contract with a
local farmer, or farmers, for a share
of their harvest. Typically, this is for
fruits and vegetables, but may also be
for meat. This involves forging a
direct market link from the farmer to
the final consumer.
Supporters of this approach suggest
products can be harvested at
peak readiness (for flavor, texture,
vitamin and mineral content) for
consumption, and delivered within
hours of being picked. Farmer and
consumer come to know each other
and can develop mutual trust (and a
personal relationship) concerning
product quality, quantity, consistency
and predictability. Those consumers
wanting special handling
and organic production have much
greater assurances they are getting
what they pay for.
Ideally, the farmer
greatest return of value from the
consumer, not having to pay wholesalers
or retail middlemen.
- Restaurant (or culinary) agriculture
— refers to a food supply relationship
between individual farmers
and managers, owners and chefs of
restaurants. The relationship is parallel
to that described above between
farmers and final consumers. This
linking can be particularly lucrative
for the farmer when restaurateurs are
looking more for quality and are less
concerned about price.
However, the farmer must be
able to provide products of top
quality, on short-notice and in a
reliable manner. Produce, meat,
baked goods and flowers are examples
of local goods restaurants may
want.
- Institutional food service & farmschool
suppliers — Many communities
across the nation have helped
local agriculture and their citizenry
by developing links between farms
and schools, hospitals, prisons and
nursing homes. Emphasis on nutritious
food, and children’s health, has
been particularly useful in forging
direct links between farm and school
lunch programs.
- Farmers’ markets — Less formally
organized than farm stores, farmers’
markets are generally held at designated
locations within a community
— such as a community building,
village square or parking lot. Local
farmers, processors, artisans and
craftspeople bring their wares to sell
at designated times. Farmers’ markets
have advantages over supermarkets
in that food grown and harvested
locally is likely to be at a peak for
freshness and nutritional value.
Local farmers retain
greater value by selling
directly to the consumer.
Farmers’ markets
can also provide a test market
for new products that, if successful
locally, might be expanded to a larger
market.
- Cooperative farm stores — More
prevalent in Europe and Canada
than the United States, cooperative
farm stores are small grocery stores
oriented to carrying local products
from farmers and food processors.
Products carried may include dairy
foods, meats, fresh and canned fruits
and vegetables, root crops, mushrooms,
dried beans and other
legumes, wine and liquors, freshbaked
goods and condiments.
These stores are generally owned
by 10 or fewer farmers. Most
numerous in France, these stores
are vehicles for supporting and
enhancing the local culture with
local products, such as Roquefort
cheese from Roquefort, France,
and Kona coffee from Hawaii.
- Produce auctions — While not
a new innovation, produce auctions
have made resurgence in
recent years, with many filling a
niche demand for organic foods
and fresh, local food production.
Customers of these auctions are frequently
roadside stands, grocery
stores and restaurants. The auction
houses typically provide not only the
facilities, but grading services, preboxing
and/or pallets, as well as collections
and overall management.
They represent an intervening link
between producers and consumers,
though they seek to emphasize
localism.
- Cooperative marketing — Green
and Hilchey argue that traditional
agricultural cooperatives (meaning
those formed in the 1930s and
1940s) have not been the choice of
farmers seeking alternative agriculture
strategies. In order to compete
with large multinational investments
firms, many older cooperatives
increased scale and geographic reach.
This has occurred to the degree that
many have become large, bureaucratic
organizations.
Size and bureaucracy tend to
not easily lend themselves to experimentation
with new “alternative
agriculture” farm production products.
However, new and much
smaller cooperatives (those with
less than $500,000 in gross sales,
for example) are being formed in
response to the mutual interests
producers have in developing markets
for crops and products that are
out of the mainstream of usual production,
Green and Hilchey note.
This is particularly the case for
fruit and vegetable production in
the Northeast.
- Value-added activities — Valueadded
activity, in which farmers
retain ownership of the product
post-processing, can enable farmers
to keep more value for their products.
Value-added activities may
range from capital-intensive
ethanol plants and sugarbeet processing
plants — which require relatively
large investments from
farmers and large workforces — to
mobile meat processing units and
“kitchen incubators,” requiring
much smaller investments and, typically,
less than 10 employees.
- New-generation cooperatives —
These co-ops are a relatively recent
phenomenon, most being formed in
the past 10-15 years. They generally
are formed by farmers who want to
process locally produced commodities,
although not necessarily for
local markets. Examples include
ethanol and corn syrup from corn,
biodiesel from soybeans, sugar from
sugarbeets, pasta and bread from
wheat, and beef and bison processing
plants. Output of these firms may go
into regional, national and international
markets.
Heffernan of the University
of Missouri estimates there are
approximately 200 of these
plants in the United States.
They tend to be associated
with industrialized agriculture
and farming systems that have
historically involved increasing
scale and use of technology. It
is a strategy that seeks to provide
outlets for commodity
production while retaining
value (obtained from processing)
for the local farmer.
The local advantage
Nearly all of these activities
involve some aspect of localism.
Community supported agriculture,
restaurant agriculture, farmers’
markets and farm-to-school and institutional
buying programs all typically
have strong “buy-local” themes. Buylocal
campaigns seek to expand the
consumption of local products, thereby
bringing greater economic returns to
the local area, rather than sending
those same consumption dollars “out
of town.”
Farmers selling their products
directly to consumers do not have to
share value with middlemen. Dollars
spent locally for local products multiplies
the economic benefits of this
spending.
It also draws out the creativity of
local people. Part of buying locally
may also involve products that are
almost emblematic of shared local values.
For example, a rural town may be
known as the “pumpkin or blueberry
capital” of its state; or the highlight of
a town’s annual events calendar may
center on hosting the state’s sweet
potato, almond or turnip festival. In
some states, these are important
tourism events. Crops can become a
primary focus of community identity
— one which the entire population
wants to preserve.
This local identity can sometimes
be expanded to a regional or statewide
identity with a great deal of consumer
value. Green and Hilchey note such
marketing messages as: your familyfarm
neighbors; keeping dollars in the
local community; knowing the farmer
who produced your food; preserving
open space in the community. These
types of appeals may be combined with
such regional identifiers as:
Pennsylvania Dutch, Appalachian, Blue
Ridge, Low Country, Up-Country,
Down East, Eastern Shore, Twin-
Lakes, and countless others.
Role for co-ops
While many of these strategies do
not rely on formal cooperative organization
in their development, cooperative
formation could be quite useful in
resolving some of the difficulties and
challenges.
Cooperatives have been successful
in agriculture because relatively small
producers with similar production
operations and output had a strong
common need for marketing services
and production supplies. Farmers marketing
to schools, nursing homes, hospitals
and restaurants face similar
product assembly, marketing coordination
and standardization problems.
These market niches require timely,
dependable and reliable delivery of
high-quality products. They also
require a diversity of products —
fruits, vegetables, dairy and meats.
However, the vagaries of farming —
weather being the largest — can make
the best of these links tenuous.
A local cooperative organization can
provide a mechanism for drawing upon
several farmers for a variety of products,
while providing for assembly, delivery
and standardization that ensures quality.
This same cooperative might also provide
a bargaining function.
The larger the volume, the greater
the number of customers and cooperative
members, the more formal relationships
become. Beyond a certain
size — often thought to be about 100
members in a cooperative — relationships
become much more “business
only,” and much less personal.
Developing trust with chefs and school
administrators, for example, becomes
more difficult.
Smaller scale allows for more personal
relationships, the development of
trust and true “localism.” However,
larger-scale operations may allow for
greater flexibility in terms of both
product diversity and processing.
New-generation cooperatives are
slightly different from the above activities
in terms of localism. They are
generally organized for much larger
markets than those found locally.
They are less experimental, in that
they focus on the development of new
markets for traditionally produced
commodities. However, they are oriented
to capturing more value for the
local farmer and often do so while
emphasizing the regional and local
identity of the product.
Lyson, and others, argue that any of
these alternatives should be pursued
for a number of reasons, not the least
of which are the rural development
goals of economic growth and quality
of life enhancement (see sidebar below
on community benefits).
This article has suggested possibilities
for smaller cooperative organizations.
However, larger cooperatives —
even if only in support of the activities
of others — could help pursue
alternatives that are more directed
toward maintaining farmer traditions
and the survivability of farmers as a
group while sustaining small rural
communities.
How small farms benefit communities
Preserving small farms provides numerous benefits for
rural America. They help maintain the population base necessary
to keep local schools, churches, restaurants and
retail stores operating. Green and Hilchey summarize this
series of benefits of alternative agriculture development.
They note that local farms:
- Provide jobs and purchase inputs and services from
other local businesses. They achieve a high “economic
multiplier effect” by recirculating dollars in local
economies.
- Preserve open space, beautify landscapes and attract
tourists, providing further economic benefits.
- Provide fresh, wholesome foods with excellent taste
and nutrition.
- Benefit the environment by protecting watersheds
and enhancing wildlife habitats and biodiversity.
- As independent small businesses, they contribute to a
strong middle class and a healthy civil society.
- Provide a wonderful environment for raising families.
- Connect all people with the rich cultural heritage of
rural communities.
