- Farm Business Management: new enterprise development, budgets/cost and returns, community-supported agriculture, cooperatives, marketing management, feasibility study, agricultural finance, market study, value added
- Sustainable Communities: new business opportunities
According to the 2000 U.S. Census, the Western region is one of the most demographically dynamic and fastest growing in the country. Desirable rural areas of the West draw retirees and amenity migrants (who move to maximize their lifestyles, not their incomes). At the same time, many rural counties are experiencing dramatic out-migration of the working-age population as traditional industries such as farming, ranching, and oil extraction decline (Selfa, 2004). Traditional rural residents have been challenged to find ways to cope. Research shows that in California, which is the largest state-level agricultural economy in the United States, “value seeking” among owners of small, sustainable family farms and ranches has increased dramatically since the 1980s (Guthman, 2004, p. 70-71). This value-seeking activity is based on the need to increase income and profitability, as well as the desire to carve out niches within the food and fiber system.
For rural communities that have traditionally been dependent upon agriculture and resource-extractive industries, there is one possibility that offers hope: entrepreneurship and exploration of new economies. A study by the Kauffman Center for Entrepreneurial Leadership (Reynolds et al, 2001) indicates that entrepreneurship is widespread nationwide. About 6.2 of every 100 adults are engaged in trying to start a new business, which equates to approximately 10.1 million adults. About half of all businesses are started by teams of people, and education and training does impact the prevalence rates of business start-ups.
Linked to this national entrepreneurial expansion is participation by rural people in an informal economy in which individuals may be employed full time or part time “off the farm,” while still engaged in their regular farming or ranching activities. In their 2004 study, Edgcomb and Thetford found that participation in this type of informal economy reduces the economic risk that often accompanies farming and ranching. For example, income needed to sustain families can be generated by informal activities during periods of low livestock prices. Individuals participating in the informal economy may have opportunities to expand their activities into additional markets — but information about market access is often lacking.
Current data argue for increased support of sustainable agricultural producers through solid technical training on processing, packaging, labeling, marketing, and competitive retail/Internet sales. Education gaps in these areas were identified in a study by the Southwest Marketing Network (Oberholtzer, Born and Dyer, 2004), which examined the information and training needs of small-scale producers and service organizations.
When asked about their training needs in the area of marketing, 62% of service organizations responded that small-scale farmers needed information on establishing farmers markets. Sixty-one percent of service organizations, Cooperative Extension, USDA Rural Development, NRCS, and non-profits indicated that this type of training was important or very important. Sixty-three percent of the service providers indicated that training in Community Supported Agriculture (CSA) and direct retail sales was important. Interestingly, 55% of the service providers indicated that CSA training was important, and 47% indicated that training and information on direct retail sales was important.
Next, researchers asked service organizations what training was available to small- and medium-size farmers. Responses showed that only 14% of support organizations in the Southwest provided training in direct retail sales; only 13% provided training on sales to restaurants; only 6% provided training to distributors; and only 9% provided training on mail order/Internet sales. Clearly, the training and information needs of small- and medium-size farmers are not being met.
A recent regionwide survey of agricultural Extension educators (WSARE 2004) showed that 47% of western agricultural Extension educators felt they had very limited knowledge of alternative direct marketing approaches (e.g., direct marketing, eco-labeling). Fifty-seven percent felt that information about these same approaches would be helpful to them in their work. In the same study, 51-71% of participants in eight western states reported very limited knowledge of establishing farmer-to-farmer networks.
The challenges facing sustainable agricultural producers are:
Market access (a shift toward concentration of food sales within retail sectors);
Human Resource Access (out-migration in many agriculturally dependent areas and rapid increases in population in others);
Technology Access (ability to use alternative processing and information technology to not only identify new Internet markets, but to maintain markets within the retail sector).
Despite these challenges, the opportunity for producers to link to small retailers is very real and timely within the current retail market. In order to be prepared to respond to the opportunity, producers and service providers need additional information and training.
These findings and arguments suggest a gap between the need for information and the availability of training — particularly information and training that would lead to expanded retail and Internet markets. This project proposes to close some of the gaps and provide a model that could be adopted in states across the Western Region.
The majority of projects funded by WSARE between 1988 and 2002 (WSARE PowerPoint presentation, 2002) have been in production research areas; only 10.2% of funded proposals have been in the area of agriculture marketing. While funding priorities in production research have been appropriate in the past, the new challenges and opportunities faced by sustainable agricultural producers today suggest a need to reassess funding strategies. There exists a real need, as the data referenced indicate, to ensure producers have access to training that will enable them to move their production forward to a retail market and ultimately an increased profit.
Project objectives from proposal:
The collaborative partnership submitting this proposal represents diverse subject matter areas and geographic regions. Collaboratively they will present a new training model in which technical experts are paired with successful sustainable agriculture entrepreneurs to offer mentoring workshops. These partners bring a wealth of technical expertise and practical experience related to business planning, food sales and distribution, and the legal issues associated with entering retail and Internet markets. Team-taught workshops will foster trust and respect, which will lead to powerful new regional resource networks whereby increasing participants understanding and proficiency in sustainable agriculture.
The partners also bring the organizational capacity required to manage the project and lead sustainable agriculture entrepreneurs in determining specific issues to be addressed through training. Partnering organizations will help secure local Extension training facilities and assist with curriculum production, copying, promotion, etc.
The Western Rural Development Center, Logan, Utah (http://extension.usu.edu/wrdc)
The WRDC is mandated to expand rural community development knowledge across the Western region. The Center has the capacity to facilitate the project in the following ways:
Sponsor telephone conference calls
Organize and coordinate one train-the-mentor workshop
Offer the workshop utilizing the Center’s Macro Media Breeze technology when available
Create and maintain project and workshop web pages (promotional information, online registration, dissemination of materials)
Create and maintain project listservs
Establish web-based resource directories and an agriculture entrepreneur expert roster
Develop and produce the two-hour DVD video training product utilizing Utah State University’s award winning production staff and facility, K-SAR
Develop and host the electronic toolkit on the Center’s website
Promote and market training products (DVD and online tools) in Center newsletters
Disseminate products through the WRDC website, WRDC Board of Directors, WRDC Multistate
Coordinating Committee, USU Extension Publications, RRDCs, CSREES, and SARE
Conduct evaluations, prepare and disseminate evaluation reports
Manage development of curriculum (materials, copying, editorial expertise)
Provide continuing education credits, or certificates of completion, through Utah State University
John C. Allen, Director of the WRDC, has a long history of developing and delivering sustainable agriculture programs to professionals and producers. In 2003 Dr. Allen was awarded the Nebraska Sustainable Ag Society Research and Education Award.
Jim Dyer, Southwest Marketing Network, Hesperus, Colorado (http://www.swmarketing.ncat.org/)
Jim Dyer and the Southwest Marketing Network have a history of grassroots organizing, program development, and program delivery around sustainable agriculture marketing issues. Previous successes include the Navajo Sheep Project, Healthy Mountain Communities, and the National Center for Appropriate Technology. Training responsibilities will include:
Marketing opportunities in local food systems: buy local promotion, farm to school, etc.
Organic production and marketing overview with direction to sources of expert guidance
Resources for marketing information and assistance
Product promotion strategies (local, nutrition, conservation values, etc.)
Linda Gillmor, Morgan Valley Lamb, Delta, Utah (http://www.morganvalleylamb.com/)
Co-owner Linda Gillmor is a producer who has learned from experience how to enter new markets to remain profitable on her ranch. Linda has developed working relationships with numerous university and government agency service providers in an effort to improve her business. She is eager to share the lessons she has learned along the way. Training responsibilities will include:
Diversified sales strategies
Aaron Johnson, Food Innovation Center (FIC), Portland, Oregon (http://fic.oregonstate.edu/)
Dr. Johnson has helped hundreds of potential food entrepreneurs evaluate their business concept and develop their business idea. His involvement goes beyond "how to" and "what if" discussions to being involved in the research and analysis. The process has included working with process engineers, food technologists, and marketing specialists in a variety of industries. Specific projects have entailed feasibility studies, market assessments, consumer research, and other related tasks. His involvement in the proposed project provides access to a valuable network of technical expertise through Oregon State University's Food Innovation Center. Training responsibilities will include:
New venture creation process
Retail and Internet marketing
Kim Leval, Center for Rural Affairs (CRA), Eugene, Oregon (http://www.cfra.org/)
Kim Leval and the CRA have a long history of working with producers on marketing, small business development and policy issues relevant to sustainable farm and rural development. Training responsibilities will include:
Farm Bill programs and other funding sources for new marketing ventures and small business development
The value of peer-to-peer sharing; shared leadership
Resources for sustainable agriculture education and outreach
Barbara Rasco, Ph.D., J.D, Washington State University, Pullman, Washington (http://www.wsu.edu/)
Barbara Rasco brings legal expertise and a high level of nutritional expertise in the areas of food product development, food law, food safety, and food processing. Training responsibilities will include:
Food safety and processing
Development of profit- added products
Bill Manning, Kiva Orchard, Durango, Colorado (http://www.kivaorchard.com/default.htm)
Kiva Orchard offers a case study illustrating how an ag producer can successfully move into alternative processing and retail sales. Owner Bill Manning will provide advisory support on business and product development, and innovative website development.
Andrew Clark, Sustainable Agriculture Network (SAN), Beltsville, Maryland
SAN is an information exchange effort funded by the USDA SARE program, involving universities, government, producers, businesses, and non-profit organizations. SAN has agreed to help publicize products developed for the training. Andrew Clark, SAN Coordinator, email@example.com.
We will target Extension faculty, USDA Rural Development, NRCS, and other USDA agency personnel, non-profit organizations, grocer associations, banking institutions, and other federal, state, and private agricultural professionals. We anticipate 60 participants at the training workshop. In addition, the DVD Training video will be available for Extension personnel and faculty, USDA Rural Development, NRCS, and other USDA agency personnel, non-profit organizations, grocer associations, banking institutions, and other federal, state and private agricultural professionals.
Activities and Methods
A one-day regional train-the-mentor workshop will be presented. We have chosen to use the word ‘mentor’ instead of ‘trainer’ because we envision this program as one that will develop trusted guides or counselors for the agricultural producers to call upon for information and expertise. Wherein a ‘trainer’ is one who trains and imparts information, they do not necessarily develop long-term relationships with his/her trainees. We propose developing a program that not only encourages but also fosters collaboration between the service providers and the producers where they will each become a resource for the other. The agricultural producers need people with the expertise to educate them on the many facets involved in processing, labeling, packaging, and marketing their products. They also need to be connected with someone who has access to information pertaining to these components and businesses and/or individuals who provide these services. Likewise the service providers are in need of making real world connections with successful agriculture entrepreneurs and those agricultural producers in need of expert guidance.
To maximize the opportunity for participation by agricultural producers we will leverage an existing conference for coordination of the regional training. We will approach the organizers of existing annual regional agriculture conferences/workshops and ask for permission to offer a pre- or post-conference training workshop available to both service providers and agricultural producers. Where feasible we will also offer these workshops live via the Internet using Macromedia Breeze.
We have identified the following annual conferences as potential partners for the proposed training workshop. This list is not complete and serves only to illustrate the regional opportunities that exist for partnering and maximizing attendance at the proposed training workshop. These include:
Farm Direct Marketing Conference
Diversified Agriculture Conference
Southwest Marketing Network Conference
Additionally, we will sponsor a ‘munch and mingle’ networking reception immediately following the training workshops to encourage interaction between service providers and agricultural producers.
The workshop mentoring teams will consist of paired technical experts and successful agriculture entrepreneurs to capitalize on their combined strengths and expertise. Case studies, presented by real people who have succeeded, will uncover pitfalls, impart valuable lessons, and help define entrepreneurial success. Technical experts will provide another level of mentoring and expertise. This workshop will be video taped and used to create the DVD training video. This will allow for Extension personnel, NRCS, and other agricultural professionals to use the DVD in the field with the basic content of each workshop remaining the same, but individual workshops conducted using the DVD Training video may be customized based on input from regional partners. Partnering providers with producers will also serve to begin linking the service providers with the agricultural producers to foster increased information exchange and future opportunities.
Extension personnel, NRCS staff, and other service providers require easy-to-access and easy-to-customize tools to guide them through preparation for future workshops. We propose developing two products that will work in conjunction with one another to provide information and resources for the mentors. These include an easily customizable electronic toolkit and a DVD training video. The customizable toolkit will allow for the mentoring team of one service provider and one agriculture entrepreneur to populate the presentation with information pertinent in their geographic region or their particular agricultural market. The two-hour DVD training video will include segments on each of the proposed six components, PDF files of the materials and a web link to the project’s website for easy access to downloadable files, resource networks, etc. The toolkit will include:
A curriculum and customizable PowerPoint presentations, available for download and on the DVD, specifically addressing the issues of market assessment, consumer preferences, processing, packaging, and labeling for retail and Internet sales;
A DVD training video outlining each of the six components, and produced by Utah State University’s award winning production facility, K-SARE (see DVD sample enclosed with original proposal);
Issue summaries for service providers and sustainable agricultural producers;
Regional resource contact information and expert roster.
All products will be made available on an ongoing basis through the Western Rural Development Center website located at http://extension.usu.edu/wrdc.
Four service provider outcomes are expected:
Enhanced awareness of innovative marketing opportunities for retail and Internet sales;
Increased knowledge of market assessment, consumer preferences, processing alternatives, packaging, labeling, entry into retail and Internet markets;
Increased capacity to competently deliver future mentoring workshops;
Increased awareness of, and access to, sustainable agriculture entrepreneur information, resources and networks.
Potential agriculture entrepreneur outcomes include:
Increased knowledge of accessing retail and Internet markets and market assessment;
Face-to-face time with service providers in their sub-region;
Increased awareness of available networks and resources.
The evaluations will be conducted by the WRDC, and monies to manage this portion of the proposal have been outlined on the Center’s budget and budget narrative. We will conduct one service provider evaluation prior to the workshop and one evaluation six months following the workshop. We plan to conduct the evaluation of the agricultural producers six months following the workshop.
E-survey pre-test of initial mentors (service providers) to determine subject knowledge, awareness of similar training available through Extension and other USDA service providers, and level of experience as a mentor in the content areas.
E-survey post-test of initial mentors (service providers) will be conducted six months following the workshop. Post-test will measure change in subject knowledge, awareness of the issues related to entry into retail and Internet markets, and change in behavior (additional mentoring they are conducting, contacts they are making, etc. making).
Mail survey of second level participants (producers) to assess changes in knowledge and behavior (farming or marketing activities), quality of life, or economic situation since the training workshop.