Multi-state Value-Added Team Building in the Northern Mississippi River Delta Region

Final Report for ES97-034

Project Type: Professional Development Program
Funds awarded in 1997: $20,000.00
Projected End Date: 12/31/1998
Matching Federal Funds: $5,000.00
Matching Non-Federal Funds: $5,000.00
Region: Southern
State: Arkansas
Principal Investigator:
Dr. James Worstell
Delta Land & Community
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Project Information

Abstract:

The goal of this project is to create a network to catalyze formation of locally-owned, value-added enterprises. Value-added food processing enterprises typically expect an 18-20% return on investment, among the highest of all sectors of the U.S. economy. Return to farms for raw commodity production averages 2-3%. Adding value to raw commodities before they leave the Delta could create jobs and keep the profits in rural communities.

Project Objectives:

1. Initiate a multi-state network for development of skills related to value-added diversification in agriculture. This will include
a. Form networks of agency personnel across states.
b. Initiate resource sharing strategies between these groups.

2. Assess training needs in the region in value-added diversification. This assessment will include:
a. Identify strengths and weaknesses of each state’s programs. Initiate plans of cooperation between states.
b. Educate participants of present value of value-added efforts in each state.

Introduction:

Establishing networks of community-oriented entrepreneurs to nurture other budding rural entrepreneurs is the best way to overcome local power structures and ingrained, debilitating mindsets. A few non-profit organizations in Southern states have experimented with such networks. The most successful networks are not led by academics and non-profit organizations. A common trend in both the academic and non-profit world is to professionalize rural development. Agencies which adopt the “expert culture” become just another of the many gatekeepers within local political-economic power structures which invariably inhibit entrepreneurial innovation. The foundation of DEN’s approach is the principle that entrepreneurs are always at the heart of sustainable rural development. Too many rural development programs fail because they rely on “experts” in rural development who have never run a business. This is especially true in the Delta where a plantation economy has created extremely polarized communities. However, a network which reaches across political boundaries, and beyond existing gatekeepers, can provide support to local entrepreneurs, cross-fertilization of ideas and can marshall resources which no single local group can provide.

Education & Outreach Initiatives

Objective:
Description:

Methods

The purpose of this project is to plan and begin development of a network of farmers, entrepreneurs, researchers, non-profit staff and extension agents which is not to be a high-overhead institution, but a flexible network of continually evolving, productive relationships and demonstrations.

The objectives of the project were modified somewhat by the stipulation of the granting agency that the funds be used to design a more extensive follow-up project. The project objectives remained the same, but information was also collected consistent with those objectives in order to better design the follow-up. A Steering Committee for the project organized the conference “Entrepreneurial Agriculture in the Northern Delta” held November 13 in Dyersburg, Tennessee, recruited additional members from that conference and then analyzed results of that conference and surveys on needs for training in sustainable enterprise facilitation. In addition, project staff conducted a series of interviews with people in the Delta involved in value-added diversification to contribute to the developing consensus on the optimal training plan for development of skills in creation of sustainable value-added diversification.

The interactions and responses of participants in the conference provided insight into design of training programs for facilitation of value-added diversification. We would expect that the makeup and responses of this group would be typical of potential training participants.

About half had managed a farm (45 of 91). A significant number reported having managed an agricultural business (35 of 91). Delta attendees were much more likely to have managed farms and agribusinesses. Kentucky participants were much more likely to have managed a farm than other states.

Participants rated themselves as being fairly knowledgeable about managing farms and agribusinesses (most choosing 4 or 5 on a 6 point scale). Interestingly, when the same questions were asked at the end of the survey, they rated themselves as worse at the end of the questionnaire in knowledge of managing businesses. Presumably, the questionnaire, by just mentioning various common areas of business knowledge, increased awareness of holes in participants knowledge.

To plan future training activities, participants were asked a series of questions about five potential training topics: feasibility analysis, cash flow analysis, business planning, market analysis, and value-added diversification.

Participants rated their knowledge in the five areas at about the same level. On a six point scale, well over half rated their knowledge as 3 or less on every topic. Attendees were significantly more interested in learning more about feasibility analysis and cash flow analysis than they were interested in learning about business planning, market analysis, or value-added diversification. Given the stress small business experts give to business planning and marketing, these results may indicate a need for building more awareness of the key needs for developing new agribusinesses. However, participants expressed almost identical interest in training in all five areas. At most, two of the 91 participants were not interested in training in any one particular area. All others responding (as high as 100% in two cases) wanted to participate in training. Respondents only differed on whether their interest was qualified by how easy and convenient the training was. The minimum with unqualified interest in training was 46-55 in each of the five categories. This appears to be a sufficient number to justify training on each topic in the region.

Even more encouraging for future training in the Delta is that Delta residents showed higher levels of interest in each of the five training areas than non-Delta residents.

Given the need to make entrepreneurs the center of rural development training, a series of questions were asked about entrepreneurs. Results are shown in the table below:

________know____________know____________know
________entrepreneurs______agribusinessmen____ag entrepreneur who could partner with
yes______82______________73_______________31
no_______8_______________17_______________57

These participants nearly all knew entrepreneurs and agribusinessmen. A third know an agricultural entrepreneur well enough to partner with him to develop a business plan.

These numbers are very encouraging for future training. These participants appear to have a number of contacts outside production agriculture and many appear to have relationships very conducive to further training events.

These results of the surveys and subsequent consensus-building interviews and focus groups informed the development of a training plan entitled “Motivating teams for enterprise facilitation” which is now being implemented in the region.

Recommendations of specific activities over the next two years are 12:

1. Training should be in agent/entrepreneur pairs. Nearly half of participants in the Dyersburg meetings reported they knew an entrepreneur they could partner with to develop a business plan. The chief criteria for selection will be the strength of the partnership between the agent and the farmer/entrepreneur and the potential of the partnership to facilitate value-added diversification in the Delta.

2. Initial orientation for learning pairs. Learning pairs should conduct case studies of three existing agricultural businesses in his community. These case studies will explore how each business got started in the county. Special emphasis will be on mentors and facilitators of each business.

3. Training will be in five areas based on the results of the Dyersburg surveys and subsequent consensus. Dialogue between project participants will be a crucial component of each session and is expected to occur with increasing frequency. Five general categories of training will be conducted.
a. Basics of business plans.
b. Financial and credit management
c. Facilitation of groups and networks.
d. Policy and government assistance.
e. Emerging markets and market strategy.

4. Network building. Agents and farmer/entrepreneurs will be provided continuing assistance from their state coordinator throughout the project to develop networks at three levels. Enterprise-specific networks will be established to meet particular needs of each enterprise. Two types of state-level networks will be established: networks of farmer/entrepreneurs and networks of facilitators and service providers. A third level will be regional and national networks for cross-fertilization of ideas across state and market boundaries.

5. North Dakota Marketplace visit. To obtain first-hand knowledge, state representatives of the project will attend the yearly “Marketplace” event in Bismarck, ND, which helped catalyze value-added diversification in the Northern Plains and has already been copied in Northern states.

6. Institutional buy-in from all states in region.

7. Compile and integrate training materials, information on enterprises and resources available in all three states.

8. Training entrepreneurs in presentation of their business so that it will be highly evaluated by rural credit providers, SBDC staff and others crucial to success.

9. Establish a Delta Marketplace of Ideas to showcase existing successes and the many opportunities for agricultural entrepreneurs in the Delta.

Both the classes and the displays will help to multiply the training received by initial project participants.

10. Establish a virtual Marketplace as part of www.deltanetwork.org. Each enterprise will have a page on the website as well as links to web pages and email addresses of relevant service providers.

11. Establishment of a directory and central clearinghouse.

12. Development and distribution of training protocols, materials and notes.

Outreach and Publications

Dissemination of Outcomes

The recommendations resulting from the conference and the planning team’s subsequent discussions throughout the region were shared with the SARE/PDP program in the form of a proposal submitted in early 1998. Proceedings of the conference were up on the network web site (www.deltanetwork.org) within two weeks of the end of the conference.

Each participant in the conference was subsequently sent a resource guide for value-added diversification activities, based on programs discussed at the conference.

Outcomes and impacts:
Impacts and Contribution

Potential Benefits and Impacts

The project had two objectives: establish a network for facilitation of value-added efforts and determine training needs. As illustrated by the feedback mentioned below, the project was successful in piquing interest in value-added diversification and the skills needed to accomplish it. A network was established throughout the region which continues to grow. Training needs are documented above.

The proposal when funded also was assigned a goal beyond determining training needs. This was reaching consensus on a training plan to meet these needs. These were both accomplished as attested by the funding of the subsequent proposal by the PDP program. The potential benefits of this need assessment and planning effort will be increased value-added diversification in the region.

Trainee Adoption and Direct Impact

Agribusiness development is not a short-term process. Direct impact of a project such as this is in helping participants take the next steps toward value-added diversification. A project focused in a few months, such as this one, will not reach the ultimate goal of sustainable value-added diversification in the Delta. However, our pre and post surveys did show an increasing knowledge of needs in value-added diversification.

The creation of a new five state network dedicated to value-added diversification is an impact which will continue to resound throughout the region.

Feedback from Farmers and Ranchers

The highpoint of the conference, according to post-conference surveys, was the presentation on the value-added program in North Dakota by Sara Vogel. Several attendees made written evaluations such as, “The speakers were excellent,” “Great variety of speakers with good expertise and a diversity of participants with emphasis on working together on economic development,” “Thought stimulating,” ”Excellent program, especially info on new generation coops,” “It was all good,” “All very good,” “Good location, good cost, good speakers, great contacts.”

What did participants like most? Responses included: “the variety of speakers,” “finding out ways to help producers with new ways of marketing products,” “information on coops,” “practical ideas,” “networking,” ”opportunity to meet folks with similar interests and exchange ideas.”

Many recommendations for improvement indicated a desire for more information. Some recommendations were as simple as “expand!” and “have more (another session).” Other recommendations for improvement included adding “specific value-added project information,” “how-to information on coops,” “more on technical opportunities and business incubators,” “Problems on initiating value-added businesses must be included in the topics to be discussed in our next conference,” add “some more specific meetings, for example, how to start a cooperative,” “have a larger number of growers and local agri-business to help visualize needs for this area,” “have a mixer so folks can get better acquainted, make it a 2-day event,” “have a work session of mock entrepreneurial agriculture,” “develop multi-state proposals,” “develop a high visibility plan of work,” “have some farmers speak up.”

Project Outcomes

Recommendations:

Future Recommendations

The hypotheses and recommendations resulting from this project are presented in full in the proposal “Motivating teams for enterprise facilitation” which was recently funded by the Southern SARE/PDP program. The abstract of that proposal states:

Environmental degradation, poverty and dependence on least cost commodity production are tightly intertwined in the Delta. Potential solutions can be closely linked since farmers most quickly change their practices in response to market opportunities and the most profitable markets require value-added processing which creates jobs. Extension, NRCS and USDA/Rural Development staff are well-positioned to facilitate new enterprises which are both ecologically and economically sound. Representatives of all these agencies, and Delta non-profit staff have participated in a planning process with Delta farmer/entrepreneurs to determine training needs in enterprise facilitation. This process has resulted in a project design focusing on pairs of agents and farmer/entrepreneurs which will include a combination of formal and experiential training and directed dialogue with other participants. A regional “Delta Marketplace of Ideas” will be held in November 1999 to help the agents and farmers multiply this training more widely in the Delta and promulgate enterprises arising from this project and enterprise ideas from other SARE projects.

Recommendations of specific activities over the next two years are 12:

1. Selection of agent/entrepreneur pairs. Nearly half of participants in the Dyersburg meetings reported they knew an entrepreneur they could partner with to develop a business plan. A total of 21 pairs (7 in each state) will be selected. The chief criteria for selection will be the strength of the partnership between the agent and the farmer/entrepreneur and the potential of the partnership to facilitate value-added diversification in the Delta. Other criteria will include the ability of the idea to be widely replicated in the Delta, the willingness and ability of the agent to train other agents in facilitation and the willingness and ability of the farmer/entrepreneur to serve as a mentor to other farmers. Those selected will have a partnership between an agent and a farmer/entrepreneur to create or expand an agricultural enterprise. Those pairs selected will each receive: $1000 to cover expenses incurred in achieving project objectives, training in key areas of sustainable enterprise development, and assistance in resource and information network development. If selected, participants must agree to pass along their skills to other agents and farmers, develop case studies of 3 local agricultural businesses, and develop a presentation featuring the enterprise for the Delta Marketplace of Ideas (see below) to be held in November 1999.

2. Initial orientation for successful learning pairs. Each selected agent will be contacted by his state coordinator for orientation to the project and to surface needs and expectations to assist in planning and evaluation. Following these conversations, state coordinators will finalize a worksheet and send it to each selected pair. Each agent will coordinate completion of the worksheet with the farmer/entrepreneur prior to the first training. The purpose of the worksheet is to insure participants come to the meeting ready to share ideas with other participants. During this meeting, the method of case studies will be presented. Before this next training, each selected agent will be responsible for exploring three existing agricultural businesses in his community. These case studies will explore how each business got started in the county. Special emphasis will be on mentors and facilitators of each business. Each agent will be encouraged to explore development of value-added businesses or businesses which diversified the agricultural economy in the county. Agents will describe these three businesses’ origins at the next meeting.

3. Training will be in five areas based on the results of the Dyersburg surveys. Dialogue between project participants will be a crucial component of each session and is expected to occur with increasing frequency. Directed dialogue and informal discussion sessions will be prominent features of each training event. Each event will be preceded by an exchange of current needs among all project participants. Each participant will be interviewed and his current needs for his project shared with other participants before the learning sessions so all can be reflecting on the others’ situations. Five general categories of training will be conducted.
a. Basics of business plans.
b. Financial and credit management
c. Facilitation of groups and networks.
d. Policy and government assistance.
e. Emerging markets and market strategy.

The first training (basics of business plans) will be in November 1998 in an initial group meeting at the second “Entrepreneurial Agriculture” meeting. Three trainings will be held monthly in state groups at locations central to the state networks in Jan, Feb, and March 1999. The first and last trainings will be held in regional meetings–the last being the first Delta Marketplace of Ideas.

4. Network building. Facilitation of networks is a key skill which will be developed by the project. Learning pairs will begin network building with the case study process. Agents and farmer/entrepreneurs will be provided continuing assistance from their state coordinator throughout the project to develop networks at three levels. Enterprise-specific networks will be established to meet the particular needs of each enterprise. Two types of state-level networks will be established: networks of farmer/entrepreneurs and networks of facilitators and service providers. A third level will be regional and national networks for cross-fertilization of ideas across state and market boundaries.

5. North Dakota Marketplace visit. To obtain first-hand knowledge, state representatives of the project will attend the yearly “Marketplace” event in Bismarck, ND, which helped catalyze value-added diversification in the Northern Plains and has already been copied in Northern states. In addition to attending organizing sessions the night before and the event itself, Delta participants will be able to meet with organizers, former Agriculture Commissioner Sara Vogel and present Deputy Commissioner Jeff Weispfennig in addition to “Marketplace” coordinator Marilyn Kipp.

6. Institutional buy-in from all states in region. Each state coordinator will be responsible for recruiting all major agricultural organizations (e.g., Department of Agriculture, Farm Bureau, commodity groups) to participate in the “Delta Marketplace”.

7. Delta Land and Community will compile and integrate training materials, information on enterprises and resources available in all three states. Staff at Delta Land and Community will participate in state activities and coordinate regional activities (including organizing and promoting Delta Marketplace widely) in order to solidify the network and lay the foundation for the virtual Marketplace and Directory.

8. Pre-Marketplace planning session. In August 1999, all participants will come together for an update on activities, to seek input for final planning of Marketplace and for a training session on successful displays and presentations. Presentations will be evaluated by rural credit providers, SBDC staff and others typically involved in the business planning process to provide independent, professional critique. These critiques will also assist in evaluation of the overall project.

9. First Delta Marketplace of Ideas. In November 1999, the first Delta Marketplace of Ideas will be held in a major convocation center with attendance open to the public and advertised throughout the region. Delta Marketplace will have a minimum of 21 classes presented in a minimum of three tracks, each with 7 sessions (provided by agent/entrepreneur pairs).

Presentations need not be by the agent or farmer/entrepreneur, but can be by any resource person recruited to be part of the network. Each presentation will include descriptions of three results of the pair’s learning over the year:
a. basic business concept
b. resource network
c. plans for future

Also invited will be representatives of SARE projects which might provide new enterprises for Delta farmers. Among those already agreeing to attend are Dr. Seth Dabney, USDA/ARS, Oxford, Mississippi (switchgrass for erosion control), Erin Hughes of Winrock (maximizing potential of woodlots).

Both the classes and the displays will help to multiply the training received by initial project participants.

A survey will be administered at the conclusion of Marketplace to both project participants to evaluate and improve the complete project and to other Marketplace attendees to evaluate and improve Marketplace.

10. Establish a virtual Marketplace. As follow-up to Delta Marketplace, the presentations and displays at the Delta Marketplace will all become part of a virtual Delta Marketplace on www.deltanetwork.org. Each enterprise will have a page on the website as well as links to web pages and email addresses of relevant service providers.

11. Establishment of a directory and central clearinghouse. In conjunction with the Delta Marketplace of Ideas, the project will release a summary publication describing resources available to facilitate sustainable enterprises in the Delta. Two categories of resources will be included: sustainable enterprises and assistance providers. Each assistance provider will detail what the organization or individual can do to assist in sustainable rural development of the Delta. We envision a complete reference work which would be updated for each yearly conference. This publication will provide basic contact and background information needed to keep the network strong and growing and assist in forming sub-networks. Included will be governmental and non-profit sources of information and assistance organized by the state. This publication will be distributed throughout the region both to assist enterprise facilitation efforts and to publicize Delta Marketplace and the growing network.

12. Final evaluation survey and report. All attendees and participants in the Delta Marketplace and training events will be surveyed to determine how the training events could be improved and to encourage networking among participants. This survey will also be used in the project evaluation. Upon analysis of survey results, final report to SARE/PDP will be prepared. The final report will also include all training materials developed by the project. These materials will also be distributed to all facilitators trained in the project and others at request.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.