Farm Aid report shows how family farmers can power economic recovery

Farm Aid report shows how family farmers can power economic recovery

By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, June 2 – Trumpeting a potential reversal of fortunes, a Farm Aid report released Wednesday on the eve of USDA’s National Summit of Rural America sees family farmers as key to national economic recovery.

Farm Aid President Willie Nelson explains that “In 1985, we started out to save the family farmer. Now it looks like the family farmer is going to save us. As our nation continues to endure an historic economic downturn, America's family farmers offer us much hope.” The Farm Aid report itself, “Rebuilding America’s Economy with Family-Farm Centered Food Systems,” is based on Nelson’s belief that “family farmers are the backbone of the country, the bottom rung of the economic ladder on which all else depends.”

The Farm Aid report warns that:

“Communities that lose family farms lose a core of skilled producers with exceptional experience and practical insight. They lose a base of committed employers and consumers, causing more businesses to shut their doors, shrinking the local tax base and ultimately leading to population loss. In addition, a number of studies have documented trends of economic and rural community decline in areas with greater concentrations of industrial farms. The industrial system that so often replaces family farms siphons millions of dollars away from rural economies, purchasing inputs from corporate supply and service industries outside the region and sending profits to financial centers far from the farm. This pattern drains local businesses and can decimate the social fabric of rural communities, increasing unemployment rates and putting more pressure on public welfare services such as Medicaid and food assistance programs. Compounded with an aging farming population and an exodus of rural youth to urban areas, previously vibrant farming communities are in sharp decline.”

As an example of how concentration has changed rural America, the report notes that “four companies dominate 83.5% of the beef market, 66% of the hog industry and 58.5% of the broiler chicken industry. At the same time, 93% of soybeans and 80% of corn grown in the United States are under the control of just one company.”

The Farm Aid alternative is to encourage mid-sized farmers, those operating full-time family farms with annual gross sales between $100,000 and $250,000, to create “mid-scale food value chains” to aggregate the production from a group of farms to give farmers cost-effective access local or regional distribution networks. The report points to Shepherd’s Grain in the Pacific Northwest, collecting and milling wheat from 33 family farms averaging 4,500 acres per farm, as “an alternative business model that supports regionally identified, high-quality and differentiated foods.”

In a Farm Aid teleconference to launch the report, farmer and Shepherd’s Grain founder Karl Kuper explained that the eight year marketing program now accounts for about $5 million in annual wheat flour sales, wholesale value. Responding to consumer and distributor interest in knowing where their food comes from, he said that “we maintain traceability throughout and really support the whole ‘Know Your Farmer, Know Your Food’ concept, and that’s really a large component of our whole marketing success.”

The report concludes that Shepherd’s Grain and similar aggregation efforts represent “a huge opportunity to revitalize our rural economies and transform our food system by investing in both the growing direct market sector and emerging ‘mid-scale food value chains’ that together sustain both small and mid-sized farms. These local and regional food systems offer potent sources of economic and community revitalization.”

Another case study cited in the report is the Indian Springs Farmers Association in Mississippi. The report explains that”

“One way local food systems are successful is by aggregating the work of businesses at different stages along the food chain. Successful models often come in the form of producer cooperatives, which grant farmers ownership over the aggregation and marketing of their goods, and often reduce transaction costs in the supply chain. Started in 1966 with a mere $250 federal grant, the Indian Springs Farmers Association now combines the efforts of three dozen farmers, mostly African American, in six rural Mississippi counties. Farmers join Indian Springs for a modest $200 fee and annual dues of $12, receiving a number of benefits in return, including lower-priced supplies and coordinated growing and sales targets. The cooperative focuses on fresh vegetables, which offer higher margins than commodity crops. Indian Springs offers incentives for its members to diversify their products and members often teach each other how to improve their environmental performance, all of which reinforces an ecological and economic sustainability for their land. The farmers have pooled their resources to build a $500,000 plant where they jointly wash, process, package and distribute their many fruits and vegetables. By aggregating their goods, the growers utilize distribution networks and reach markets generally beyond their individual capacity. Each week, the cooperative pumps between $5,000 and $10,000 into one of the poorest regions of America.”

Ferd Hoefner, policy director of the National Sustainable Agriculture Coalition commented in the teleconference that rather than continue forcing farmers to “get big or get out,” the alternative championed by Farm Aid offers more options for farmers in the mid-range of $50,000 to $500,000 in annual sales. He said the aim is to “provide some marketing options for those farmers, so they can stay in business” through participating jointly in “an entirely different part of the food system.”

To read Farm Aid’s 20-page report “Rebuilding America’s Economy with Family Farm-Centered Food Systems,” released June 2, go to: www.agri-pulse.com/uploaded/FarmAidReport.pdf.

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