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Family Farm Forum. AGRICULTURE OF THE MIDDLE Welcome May 26 th 2010 2:00 – 3:30 p.m. Introduction. The Family Farm Forum consists of: Bi-annual Update on a topic of importance to small and medium-sized family farms 1 st Forum: Farm Transition – Exit, Entry and Planning

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Family Farm Forum



May 26th 2010

2:00 – 3:30 p.m.


The Family Farm Forum consists of:

  • Bi-annual Update on a topic of importance to small and medium-sized family farms
    • 1st Forum: Farm Transition – Exit, Entry and Planning
    • 2nd Forum: Local Food Systems
    • 3rd Forum: Entrepreneurship
    • 4th Forum: Small & Mid-Sized Animal Operations
  • Bi-annual web-conference to discuss selected NIFA programs, funded projects and stakeholder interests
purpose of fff
Purpose of FFF

Enhance research, teaching and outreach programs on key topics for family farms

  • Promote discussion and networking among stakeholders
  • Provide information about NIFA funding opportunities
  • Enhance impacts of NIFA supported programs by disseminating information and encouraging participation

Agenda for Webinar

  • Q & A #1 - General
  • Overview of Selected Programs
    • Steve Stevenson – U. Wisconsin – Renewing an Agriculture-of-the-Middle
    • Shermain Hardesty , Gail Feenstra – U. California
    • Michael Rozyne – Red Tomato
  • Q & A #2 – Programs in the states.

Agenda for Webinar

    • USDA Programs and Initiatives
      • Lucas Knowles – USDA
      • Debra Tropp – Agricultural Marketing Service
    • Thomas Gray – Rural Development
    • Overview of Other NIFA Programs
  • Q&A #3 – USDA Programs and Initiatives
  • General Discussion: How do we build on our strengths and address our weaknesses?
  • Closing remarks
  • Use the chat pod to ask questions and respond to others
  • You can respond to individuals or to the group
  • Repeat your question if it is not answered
  • Contact Patricia for a copy of this webinar or the Update

polling question 1
Polling Question # 1

The topic for the next Family Farm Forum should be:

  • Food Security and Family Farms
  • Food Safety Research and Outreach
  • Access to Credit
  • Other

send suggestions to Patricia:

renewing an agriculture of the middle
Renewing an Agriculture-of-the-Middle

Dr. G. W. Stevenson, Senior Scientist

Center for Integrated Agricultural Systems

University of Wisconsin– Madison

Telephone: 608-212-9078


Business & Marketing Options



1. Direct Marketing

2. Opportunity Area

Multi-Farm Food

Value Chains

Farm Stands

Farmers’ Markets






4. Troubled


3. Commodity Marketing

Small & Mid-scale







strategies for mid sized commodity farmers
Strategies for Mid-Sized Commodity Farmers
  • Individual Strategies
    • Get Bigger
    • Shift to value-adding, direct marketing
    • Shift to lower input cost/higher margin farming systems, e.g., grazing dairy systems…Other farming systems?
  • Collective Strategies: Multi-Farm Food Value Chains
    • Direct-to-wholesale marketing (regional supermarkets & food service) [Completed Case Studies]
    • Direct-to-consumer marketing through multi-farm CSA’s & Internet sales [Current Case Studies]
multi farm food value chains are strategic business alliances that
Multi-Farm Food Value Chains are Strategic Business Alliances that:
  • Deal in significant volumes of aggregated, high-quality, differentiated food products
  • Treat farmers as strategic partners, not as interchangeable input suppliers
  • Distribute rewards and responsibilities equitably across the supply chain
  • Emphasize strategic interests in the well-being of all partners (farmers, processors, distributors, retailers)
  • Build value beyond the product to include the story of the people and the business practices
  • Operate effectively at regional levels
agreements among value chain partners ensure that
Agreements Among Value Chain Partners Ensure that:
  • Prices are negotiated on the basis of production and transaction costs
  • Agreements are fair and for appropriate time frames
  • Opportunities exist for farmers and ranchers to control their brand identity up the supply chain, and
  • Co-branding with supply chain partners is a strategic option
completed case studies
Completed Case Studies
  • Country Natural Beef []
  • Shepherd’s Grain []
  • Organic Valley Family of Farms []
  • Red Tomato []
big themes available resources
Big Themes & Available Resources
  • Themes:
  • Value Chains Can Be Both “Smart” and “Right”
  • Value Chains Can Be the Foundation for a “Third Tier” in the US Food System
  • Resources:
    • Lyson, 2008. Food and The Mid-Level Farm: Renewing an Agriculture of the Middle. MIT Press, Cambridge MA
developing values based distribution networks for small and mid scale producers
Developing Values-Based Distribution Networks for Small and Mid-scale Producers

Project Directors:

Director: Shermain Hardesty, Ag & Resource Economics, UC Davis,

Co-Director: Gail Feenstra, Sustainable Agriculture Research & Education Program, UC Davis,

Project Partners:

Dawn Thilmany: Ag & Resource Economics, Colorado State University

Tom Gilpatrick: Food Industry Leadership Center, Portland State University

Jim Dyer: Southwest Marketing Network, Durango, CO

Bob Corshen & Josh Edge: Community Alliance with Family Farmers

project goals
Project Goals:
  • Identify how successful distribution networks involving small- and mid-scale producers are affected by 3 factors
    • Access to financial capital
    • Governmental regulations and policies
    • Business/entrepreneurial savvy
  • Describe how these networks generate environmental & social benefits, enhance financial viability of small- & mid-size producers
  • Educate producers, agbusiness lenders/funders, policy-makers & small business/community development consultants about factors critical to the development of successful values-based distribution networks
methodology 2 phase research process
Methodology: 2-phase research process
  • Phase 1: 9 case studiesof western US food distribution networks that are part of values-based supply chains or more conventional supply chains
  • Phase 2: Survey of 3 institutional segmentsexpected to affect development of value chains:
    • Agribusiness lenders & funders
    • Government agencies
    • Small business/community development consultants
  • Outreach:
    • Advisory board includes stakeholders involved in distribution networks
    • Share findings through regional workshops, professional meetings, academic & practical publications
preliminary findings financing business saavy
Preliminary Findings:Financing/ Business Saavy
  • Access to capital for established distributors does not contribute significantly to success unless the distributor is associated with a nonprofit or dependent on grant funds
  • Distribution expertise and prior investment in infrastructure is important for distributors
  • The “right balance” of small, mid-scale and large producers in distribution networks is important for financial stability of distributors
preliminary findings regulations
Preliminary Findings:Regulations
  • Retailers and institutional buyers, rather than government, have been largely responsible for imposing food safety standards (GAP, HAACP, etc.)
  • Small growers, in particular, will need to prepare for new GAP standards
    • Group GAPS?
preliminary findings emerging trends
Preliminary Findings:Emerging Trends
  • “Aggregation hubs” or “Regional food hubs” are emerging in various forms for small and mid-scale producers to consolidate product.
    • May involve existing distribution warehouses
    • May involve farmers markets
  • Ability to communicate authentic stories of producers is bottom line. May trump “local”
red tomato
Red Tomato

Michael Rozyne

Red Tomato

Canton, MA 02021

781-575-8911  x 24

we differentiate products decommodify
We Differentiate Products (decommodify)
  • Locally-grown
  • Ecologically-grown
  • Fair trade
  • Intrinsic product
  • Aggregation, consolidation
  • Brand
  • Storytelling, promotion
  • Day-to-day: we develop product lines and packaging, brand, sell, finance, food safety, insure, take and fulfill orders, manage logistics
  • We coordinate a network of 40 Northeast mid-sized growers

“Michael, my job is to imitate California; same varieties, same box, same pack. And then deliver it for a couple bucks less. It’s June. Sorry, I don’t have time to talk.”

    • Richard Bonanno, Pleasant Valley Gardens, Methuen, MA
    • 3rd generation vegetable grower
    • 70 years selling lettuce, peppers, squash, etc.
    • PhD in weed science
  • 90’s: $8.50/ case for 24 heads lettuce
  • Canada: $7-8/ case
  • labor + 80%, box + 50%, truck/fuel +100%
the dignity deal not a formula rather a process our way of doing business
The Dignity DealNot a formula, rather a process—our way of doing business
  • Based on values
    • Fairness, Transparency, Shared risks and rewards, Triple bottom line accountability, (Economics, Social, Ecological)
  • Baseline
    • Striving for freshness and flavor through continuous improvement
  • Origins of dignity pricing
    • Began with costs of production + reinvestment and fair/limited profit
    • Unrealistic, so moved on to the dignity price
characteristics of the dignity deal
Characteristics of the Dignity Deal
  • Close the distance between grower and consumer
  • Farm identity preserved
  • Feedback loops
    • Constant communication
    • Continuous improvement
  • Risk sharing
    • Buyer commitment
    • Advance planning
  • Dignity pricing
    • Farmer is at the table for strategy and price making
  • Externalities are part of the conversation

Locally-grown: farm identity

preservation and promotion

second q a
Second Q & A
    • How do we identify and disseminate information about programs at various states to enhance the impacts?
  • Other?

Lucas Knowles, Marketing and Reg. Programs

USDA’s Vision for Rural Economies
    • Regional Food Systems and Supply Chains
    • Broadband
    • Ecosystem Market Incentives
    • Forest Restoration and Private Land Conservation
    • Renewable Energy and Biofuels
Our Mission:

Know Your Farmer, Know Your Food (KYF2) strengthens the critical connection between farmers and consumers and supports local and regional food systems.

Participation across the Department
  • Existing authorities and programs
  • Emphasis on collaboration
  • Areas of focus:
    • Meat and Poultry
    • Food Hubs
    • Farm to School and School to Farm
    • Food Deserts
    • Research and Analysis
agricultural marketing service
Agricultural Marketing Service

Contact info:

Debra Tropp

Branch Chief

Farmers Markets and Direct Marketing Research

USDA Agricultural Marketing Service

202-720-8326 (home page)

what we do to support ag of the middle
What We Do to Support “Ag Of The Middle”
  • The Agricultural Marketing Service works every day for producers of all sizes - including farmers in the middle - to help them move product through the food supply chain in an efficient and cost-effective manner
  • AMS strategic mission and legislative authority mandates that our programs:
      • facilitate the competitive and efficient marketing of agricultural products
      • quickly move wholesome, affordable agricultural products from the farm to the consumer
      • reduce the price spread between producers and consumers
what we do to support ag of the middle37
What We Do to Support “Ag Of The Middle”
  • In particular, our Marketing Services Division focuses on helping small and mid-size farm operators by supporting the expansion of direct and local marketing opportunities for their products
  • Our Farmers Market Promotion Program, currently funded at $5 million per year
        • awards competitive grants to a number of eligible entities, including producer cooperatives and networks
        • supports demonstration projects and technical assistance initiatives in farmers markets, roadside stands, community-supported agriculture programs, agri-tourism activities and other direct-to-consumer marketing
what we do to support ag of the middle38
What We Do to Support “Ag Of The Middle”
  • Meanwhile, the research branch of our Marketing Services Division conducts baseline research and case study analysis of direct and local marketing issues and trends, and provides site-specific technical assistance to food market planners and managers on design issues and consumer demographics
  • Much of our research involves identifying promising distribution and marketing models and practices to help local producers/processors—and the stakeholders that support the—make better informed business decisions
what we do to support ag of the middle39
What We Do to Support “Ag Of The Middle”
  • We see the development of direct“business to business” market opportunities between mid-size farm producers/networks and institutional, restaurant, and retail buyers as a potential major contributor to farm income and rural economic vitality
direct marketing from farm to firm and institution
Direct Marketing from Farm To Firm(and Institution)
  • Brief history:
  • Agency involvement dates back to mid-1990’s
  • Was first agency at USDA to support and implement two pilot farm-to-school marketing projects—among the earliest projects in the US!
      • Developed three guidance documents on farm to school marketing between 2000-2005 (one in partnership with FNS and CFSC)
  • Early pioneer in examining competitive advantage of local meat processors in supplying restaurants—published Enhancing Commercial Food Service Sales by Small Meat Processing Firmsin 2004
direct marketing from farm to firm and institution41
Direct Marketing from Farm To Firm (and Institution)
  • Recent accomplishments:
  • Published a handbook in 2009 on direct institutional and retail sales strategies, in an effort to provide practical information to farmers and processors from those who actually source local product
  • Content of the handbook was based on lessons learned from a training event organized by AMS in 2008, which involved the participation of a hospital food service director who purchases locally grown food, a regional produce manager from a major national food retail chain, and a regional produce distributor
direct marketing from farm to firm and institution42
Direct Marketing from Farm To Firm (and Institution)
  • Ongoing activity:
    • To further expand the marketing opportunities available to mid-size farmers and farmer networks, anewly created USDA farm-to-school tactical team, comprised of personnel from the Commodity Procurement Branch of AMS’s Fruit and Vegetable Programand FNS, is conducting 15 site visits this year to farm-to-school programs across the country to learn about how farmers can establish new markets in local schools
    • Information collected from these site visits will assist schools, farmers and the Department in developing the tools to address existing challenges and replicate successful programs
guidance on supply chain management
Guidance on Supply Chain Management
  • Accomplishments:
  • Created “Supply Chain Management Basics” series, designed to help small and mid-sized producers and processors better understand the changing landscape of buyer requirements regarding quality control, inventory management, packaging, vendor selection, and food safety
  • Completed modules include:
    • The Dynamics of Change in the U.S. Food Marketing Environment
    • Technology:  How Much—How Soon?
    • Tracking Trucks with GPS
    • Niche Agricultural Marketing: The Logistics
  • Intend to complete this series with an additional training module on food safety practices and considerations, currently under development
guidance on supply chain management44
Guidance on Supply Chain Management
  • Ongoing activity:
  • Assessing distribution and logistical challenges faced by mid-sized producers who are attempting to broaden their customer base. 
  • Studying nine distribution models being used by farmer networks and alliances across the country
  • Many farmers continue to be challenged by the lack of distribution, aggregation and processing infrastructure that would give them wider access to retail, institutional, and commercial foodservice markets
  • Problem is especially acute for mid-size farm operators, who are too large to rely on direct marketing channels as their sole market outlet, but too small to compete effectively in traditional wholesale supply chains by themselves
guidance on supply chain management46
Guidance on Supply Chain Management
  • Ongoing activity:
  • Working with the Wallace Center of Winrock International and approximately two dozen leading national researchers and practitioners to:
    • develop a common framework for how we define, study and understand value chains in the food system
    • summarize analysis from current research on the major lessons learned, challenges, and opportunities for establishing value chains
    • create a compilation of practical tools/applications that can be utilized by practitioners to establish or strengthen value chain development. (To be completed summer 2010)
agriculture of the middle
Agriculture of the Middle

Thomas W. Gray, Ph.D.

Rural Sociologist/Agricultural Economist

USDA, Rural Development--Co-op Programs

1400 Independence Av-SW

Washington, DC 20250

Ph. 202-690-3402


democratizing democracy agriculture of the middle and cooperatives
Democratizing Democracy: Agriculture of the Middle and Cooperatives
  • Democracy presumably seeks to create political-economic (and sociological) room for people to influence decisions that have an impact on their lives (Roussopoulos and Benello Participatory Democracy, 2005)
  • Over the last several decades farmers and much of the consuming public’s influence on food and agriculture have been subordinated to larger socio-economic forces, e.g. globalization, Fordist industrialization, corporate conglomeration, and technological developments that create a redundancy among farmers and communities
two parallel food and agricultural systems
Two parallel food and agricultural systems
  • Two parallel food and agriculture systems have emerged with the development of these larger tendencies
  • One progressively large scale and vertically integrated into a global and corporate food system
  • The other composed of much smaller and more diverse farms oriented primarily to local and regional markets
A series of choices and tensions have come out of these dynamics as well, and include (among others) consideration of:
  • Farming as a business and a way of life versus farming as a business. (Economic and social sustainability)
  • Reduced reliance on external sources of energy, purchased inputs, and credit versus continued reliance on these inputs. (Economic sustainability)
  • Emphases on use of renewable resources and conservation of non-renewable resources versus continued heavy reliance on non-renewables. (Ecological sustainability)
  • Emphases on dispersed control of land, resources, and capital versus continued reliance on processes that concentrate them. (Social sustainability)
  • Rural Communities understood as essential to a sustainable agriculture versus rural communities understood as non-essential and dispensable (Beus and Dunlap 1990; Flora and Chiappe 1998). (Social sustainability)
agriculture of the middle farms
Agriculture of the Middle Farms
  • The AOTM farms tend to be commodity based, and larger in output than “metropolitan-local” (often organic) units, but smaller than their mega-farm cousins. Also referred to as “the disappearing middle” or as farms in a “death zone”
  • They struggle for survival, in-part because they produce large volumes of a low-value homogenous product (a commodity) that is in direct competition with large, mega-industrialized farms
  • Their volumes of output and distance to metropolitan areas tend to preclude entering specialized “local” metropolitan markets
  • Survival trajectories suggest moving away from a commodity based production to more value-added output
values based value chains
“Values-Based” Value Chains
  • But not just value-added but rather “values-based” value chain development, i.e. products and production that incorporate various sustainability criteria into a differentiated product. —with emphases on, among other characteristics, renewable resources, decentralization or localism, rural community health, safe, flavorful, healthy food, and understandings of farming not only as a business but a way of life
  • This development can deepen a tendency of democratization or re-democratization in that it can bring greater influence back to farmers, narrow the distance between producers and consumers, empowers local areas rather increasing centralization, and serves to produce safe food for a health and environmentally conscious public
  • Painter article reviews and documents deepening consumer interests in such differentiated products (Painter, Kathleen. 2009. An Analysis of Food-Chain Demand for Differentiated Farm Commodities: Implications for the Farm Sector)
Organizational Design Questions: Plethora of Interests Involved in Economic, Social and Environmental Sustainability
  • How are all these different interests integrated into one organization
  • Business organizations do not easily integrate so many agendas beyond making a return on investment (roi)
cooperatives have had some success
Cooperatives have had some success
  • Organic Valley
  • Country Natural Beef
  • Thumb Oilseed Producers Cooperative
cooperative principles
Cooperative Principles

Cooperatives are organized around three basic principles:

  • The user-owner principle: Those who own and finance the cooperative are those who use the cooperative
  • The user-control principle: Those who control (govern) the cooperative are those who use the cooperative
  • The user-benefits principle: Cooperative purpose is to provide and distribute benefits to its users on the basis of their use (Schaars)

While not the only choice, the cooperative structure is designed to meld together the many (often) conflicting voices of a membership organization through the processes of member-based, democratic decision making

cooperative advantages
Cooperative Advantages
  • When there is a group of citizens with interests to produce benefits for themselves as a group, as well as the larger community, and these goals are supplemented with definite business objectives, then cooperative organization tends to recommend itself as a desirable organizational strategy
  • They can have all the economic advantages of assembly, scale, branding, marketing and advertising
  • Their advantages relative to many other forms of organization is their democratic structure, their transparency and service
  • And they are embedded in their membership, and therefore embedded where their members live. They can’t get up and leave unless their membership does
cooperative tensions
Cooperative Tensions
  • Earnings versus service versus meaning
  • Individualism and individuals action versus collective action
  • Competitive individualism versus cooperative behavior
  • Business efficiency versus participative democracy
  • Complex expertise versus grass-roots wisdom
  • Centralized decision-making versus decentralized decision-making
  • Bureaucratic logic versus cooperative logic
  • Democratic bureaucracy versus direct participative democracy
competition driven institutionalization
Competition Driven Institutionalization

Historical risk: According to Fairbarin of the Saskatchewan Co-ops Center, the organizational design risk of agricultural cooperative in the U.S. and Canada, due to an intense competitive environment, has been the tendency to expand and merge (for efficiency and competitive reasons, and for survival reasons) resulting in a “relative” loss of the democratic aspects in favor of business efficiency and bureaucracy


Figure 1: Local Cooperatives




Source: Schaars, p. 51


Figure 2: Centralized Cooperatives



Local Service Units


Source: Schaars, p. 51


Figure 3: Federated Cooperatives






Source: Schaars, p. 51

schumaker quote
Schumaker Quote

“Whenever one encounters such opposites [as centralization and decentralization] each of them with persuasive arguments in it’s favor, it is worth looking into the depth of the problem for something more than compromise …Maybe what we really need is not either-or, but [both] together”…we can find ways to enjoy the benefits of size while staying small; we can get the advantages of centralization while remaining decentralized”

further information
Further Information
  • Gray, Thomas. 2009. Selecting a Cooperative Membership Structure for the Agriculture-of-the-Middle Initiative. USDA, Rural Development-Cooperative Programs Research Report 216. Washington, DC: USDA, Rural Development
  • Gray, Thomas W. and George Stevenson. 2008. “Cooperative structure for the middle: mobilizing for power and identity,” in Thomas W. Lyson, G.W. Stevenson and Rick Welsh. 2008. Food and the Mid-Level Farm: Renewing an Agriculture of the Middle. Cambridge: The MIT Press
  • AOTM agendas can place, or re-invest influence back with farmers, consumers, rural communities
  • The cooperative model is an organizational design model that may “relatively” solidify and deepen democracy over time
other nifa supported projects
Other NIFA Supported Projects
  • Sustainable Agricultural Research and Education (SARE) program promotes profitable farming systems that are environmentally sound and enhances the quality of life for farm families and their communities
  • Example: Red Tomato project - Michael Rozyne
  • SARE is administered regionally.
  • NIFA Contact: Rob Hedberg -

other nifa supported projects67
Other NIFA Supported Projects
  • Agricultural Risk Management Education (RME) offers opportunities to develop agricultural risk management curricula and deliver these to producers
  • Example: A North Central RME grant enabled the Wisconsin Department of Agriculture to create new market opportunities for farmers liking them with local food buyers
  • RME is administered regionally
  • NIFA Contact: Patricia Hipple –

other nifa supported projects68
Other NIFA Supported Projects
  • Small Business Innovation Research(SBIR) supports research related to important scientific problems and opportunities in agriculture that could lead to significant public benefit if successfully commercialized
  • Example: It helped to establish a quality verification program at Good Natured Family Farms thus enabling the formation of a successful small farmer cooperative
  • SBIR is administered nationally
  • NIFA Contact: Charles Cleland –

third q a
Third Q & A
  • How do we identify gaps and strengthen what we have to enhance impacts?
  • Other Questions?

Polling Question # 2

  • How do you currently learn about new initiatives and grant opportunities?
    • Government RFA announcements
    • Newsletters
    • Websites
    • State Departments of Agriculture
    • Other
q a on funding opportunities
Q&A on Funding Opportunities
  • How can partnerships between CBOs, NGOs, small businesses, Universities, state agencies, and others be enhanced?
  • How do we find success stories that show how programs make a difference in the lives of our stakeholders? 
  • What is the best way to get feedback, preferably with quantifiable information on impacts?
general discussion
General Discussion

Participant Questions

concluding remarks
Concluding Remarks
  • Purpose of Forum
  • Thank you for participation
  • Highlight main points
  • Send feedback to Patricia McAleer:


Regina Beidler (VT)

Organic Valley

Gary Pahl (MN)

Pahl’s Farm

Diana Endicott (KS)

Good Natured Family Farms

Karl Kupers (WA)

Shepherd’s Grain

June 8, 2010

Producer Perspectives on New Opportunities in the Middle

9 to 10:30 AM USDA Workshop (open to USDA staff)

107-A Whitten

2 to 3 PM Congressional Briefing (open to public)

Senate Agricultural Committee Room, Russell 328-A

For more information, contact Jess Daniel,; 202-547-5754

polling question 3
Polling Question # 3

How many previous Family farm Forums have you attended?

  • This is the first
  • This is the second
  • I have attended three or more