Guided Exploration of Value Added Enterprises Project

Final Report for LNC02-210

Project Type: Research and Education
Funds awarded in 2002: $99,096.00
Projected End Date: 12/31/2006
Matching Non-Federal Funds: $32,000.00
Region: North Central
State: Kansas
Project Coordinator:
Dan Nagengast
Kansas Rural Center, Inc
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Project Information

Summary:

The three year project was designed to guide interested farmers/farmers groups, recruited at farmers markets and elsewhere, through product development, testing , equipment and supplies training, production, business formation, marketing and other issues ancillary to running a small value added business.

The project was extended for a fourth year, which was used to assist agencies in clarifying and streamlining their service offerings and transitioning referrals from the project to state agencies.

Introduction:

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Project Objectives:

1) 10 farmers/groups of farmers will understand all aspects of developing a value-added enterprise.

2) 30 farmers/groups of farmers will participate in portions of trainings and business classes offered.

3) All vendors in at least 5 farmers markets will have and understanding of value added enterprise development and regulations governing sales at farmers markets.

4) A core group of professionals will have “practiced” a holistic approach to assisting farmers in developing a successful value added enterprise based on sustainable, local food production.

Research

Materials and methods:

The approach was to recruit interested farmers and groups of farmers at farmers markets, and in the course of other outreach activities, who might be interested in developing value added projects.

These individuals and groups were assisted in product development, testing, equipment and supplies training, production, business formation, marketing and other activities ancillary to running a small business.

Methods included formal, multi-session business training and business plan development courses, field trips, tours, bus tours to visit multiple existing value added businesses and work places, and all-day work sessions at Kansas State University.

Research results and discussion:

There are at least 25 farms that are seriously pursuing production of value added products.  Eighty Five farms investigated setting up small scale processing kitchens. Fifty to sixty other farms began production of one form or another.

Activities evolved over the years from the mere accumulation of information and knowledge of how to add value, to marketing these value added products.  It is very hard to estimate sales as the types of products and farms are so diverse.  Projects include pastured poultry and eggs, on-farm day care, vegetable processing, sheep and sheep cheese, salad dressing, salsa, processed herbs, emus, chestnuts, Christmas trees, organic grain for restaurants, corn mazes, sweet corn, hydroponic tomatoes and greenhouse crops, cut/dried flowers, etc.

Over 200 farmers contacted the project for information. Ninety Five farms participated in workshops or other events connected to the project. This project grantee, the Kansas Rural Center, cooperated with various other state and local agencies including:

Kansas Department of Commerce
Kansas Department of Agriculture
Kansas Department of Health and Environment
Kansas Department of Revenue
Kansas Center for Sustainable Agriculture and Alternative Crops
Kansas State University
Kansas University
Lawrence Chamber of Commerce
Lawrence Ag Network Committee
Douglas County Extension
Community Mercantile COOP
Lawrence Area Horticulture Producers
Lawrence Farmers’ Market
Brookside Farmers’ Market
Kansas Farm Management Association
Kansas, Iowa, Missouri, and the Nebraska Vegetable Growers’ Associations
Kansas Grape Growers’ Association

Research conclusions:

As mentioned earlier, it is hard to measure economic impact from such a diversity of products. However, over the course of the project, farmers markets in the Kansas River Valley corridor now clearly offer a much wider variety of products, due in no small part to the increased sophistication of grower/processors, and the facility with which new producers can garner the necessary information to begin processing.

Farmers markets and other consumer outlets such as groceries also feel more confident in offering locally produced value-added products. This is due to the elevated level of professionalism perceived in the final products.

Regulatory bodies, especially the KS. Dept. of Agriculture and the Kansas Department of Health and Environment are much more conversant and knowledgeable about the production hurdles confronting small processors. The Department of Agriculture has proposed a “Domestic Kitchens Exemption” to the food safety regulations that would exempt small scale non-hazardous food processors from full regulation. KDA has also revised the Kansas Egg Law for consistency and ease of comprehension, as a result of farmer input.

The Kansas Dept. of Revenue has undertaken special outreach efforts to work with small farmers and processors, and developed “1-day” sales tax registration devices for those who only sell very intermittently at market.

The Kansas Department of Commerce has developed new promotional tools, “Bringing Freshness to Your Table” that encourage Kansans to shop at farmers markets and to patronize restaurants and other venues which use local produce and value added products.

The Food Science Department at Kansas State University has hosted several lab and service visits for prospective processors, and assisted in 5 well-attended workshops around the state which brought together regulators, Commerce, Revenue and technical assistance for one day sessions to assist new processors.

Finally, the numerous bus tours to value added processing kitchens allowed a whole host of interested people to visit working kitchens, and to gain valuable insight into their function, cost, and work load.

There were also several farms that, through the business planning exercises, or increased understanding of the commitment needed, decided not to undertake a value added enterprise after gaining knowledge of the time commitments and regulatory hurdles.

Economic Analysis

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Farmer Adoption

As reported in the Results and Milestones section earlier, 25 farms are pursuing production of value added products and 85 farms investigated setting up small-scale processing kitchens. Fifty to sixty other farms began production of value added or higher value crops of one form or another.

Participation Summary

Educational & Outreach Activities

Participation Summary

Education/outreach description:

There were numerous popular press stories about farms involved in the project, value added items, the bus tours, farm tours, and other events.

Public tours were undertaken to highlight fresh farm products and farm-based value added products, and had the additional purpose of helping to market those products.

Specific workshops and learning tracks were developed by the project for two years at the annual Four State Vegetable Growers Conference in Missouri.

There were no specific publications, other than promotional brochures for events, developed by the project.

Project Outcomes

Recommendations:

Areas needing additional study

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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.