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Economics
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Producer
Profitability
Other Possible Actions
The following are some other ideas that people have suggested.
Profitability
Gail C. Stern,
Palm Beach County Horse Industry Council, says: "Putting more of the economic return in the hands of the growers is essential. The middle man's pricing is a large factor in survivability."
Rick Roth
of Roth Farms in Belle Glade, Florida, says: "Farm cooperatives are the way to allow small landowners to stay competitive."
Pat Cockrell
of the Florida Farm Bureau Federation agrees. But, he adds, "We should not look at co-ops as outdated or only for the small producer ... Florida's natural citrus co-op helps all sizes of growers."
Provide
low-cost loans,
training and technical assistance to help producers take full advantage
of current technology, information systems, computer software geared to
their businesses and operations, and the Internet.
Promote:
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Business
planning and capital investment.
Preparing a business plan can allow farmers and ranchers to examine a
range of strategies to increase profits. Canada has a national program
that provides incentives for farmers to develop business plans through
cost-sharing and grants. A new Massachusetts program gives farmers
access to a team of agricultural, economic and environmental
consultants. Team members assess farm operations and make
recommendations to improve performance. Farmers may receive state grants
for capital improvements based on their business plans. Problem is,
farmers must in turn agree to sign five- or ten-year covenants
restricting development of their land. Tim W. Williams took exception to this. As he says: " It is prudent to develop a business plan, not prudent to voluntarily give up development potential, unless very well compensated. Same old story ... Loaded gun for trinkets?"
Conduct
research to determine
changes that need to be made in estate tax and other tax laws to be
competitive with foreign producers." (See Section 5, Priority Actions,
Tax Issues.)
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Address market value of land.
Provide means to compensate landowners and producers for other values of the land. Pay producers for the environmental benefits derived from agriculture activity or management. Pay for the stewardship services producers provide to society for managing wetlands, wildlife habitats and controlling exotics: the payment per acre would be the same amount the public would pay for these services if land was in public ownership. See Endnote (Also, see Section 5, Priority Action 1: "Landowner Equity")
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Provide better
crop insurance.
Insure farmers, not the crop. A crop insurance system in Canada is worth
exploring. Growers pay in a percentage of the revenues received in good
years. In bad years, they receive a payment equal to their average
income during a good year.
"Fix crop insurance by forcing growing regions back into traditional time slots."
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Economic Development
Integrate
agriculture into all economic development efforts
at the state and county levels.
Promote:
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Planning
for agricultural viability.
Some local
governments are incorporating agricultural business strategies into
their traditional economic development plans. Four local governments in
Maryland employ economic development specialists who advise farmers on
new products, services, marketing strategies and management techniques
to increase profitability.
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New products and marketing strategies.
State and local governments and agricultural
organizations are helping growers create and market specialty products such as cheese, wine, preserves and sauces, potato chips and cereals. These products can be sold year-round and some can be marketed through the mail. Several states are investigating the feasibility of public commercial kitchens that could serve as incubators for farm-based food business.
Provide financing for start up farm operations.
[There was
not complete agreement on this. Rick Roth says: "Farm Credit does a
very good job lending money to viable farmers. Government, state or
county, should not lend money to first time farmers. This is a
private industry function."]
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Marketing
Promote:
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Direct marketing.
Growers who
market agricultural products directly to customers usually receive
higher prices than farmers and ranchers who sell wholesale. Counties and
towns can encourage the development of agricultural retail businesses by
specifically permitting roadside stands, pick-your-own operations,
nurseries and other agricultural uses in their zoning bylaws. Many
communities also have developed and distributed maps showing the
location of farm stands, pick-your-own operations and farmers' markets,
and some have posted signs directing drivers to farm businesses.
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Ferdinand F. Wirth, Ph.D.,
Assistant Professor of Food and Resource Economics at the University
of Florida's Indian River Research and Education Center, notes that:
"There is a general belief that farmers selling direct will make
more profit by capturing some of the monies normally retained by
various marketing middlemen (wholesalers, brokers, etc.). This is
not necessarily true! There are a number of marketing functions that
must be performed if food is to flow successfully from producer to
consumer.
These
marketing functions, normally performed by middlemen, include
exchange functions (buying and selling), physical functions
(storage, transportation, processing), and various facilitating
functions (standardization, financing, risk-bearing, marketing
intelligence gathering). All of these functions must be performed by
someone, and there are costs associated with these marketing
functions. If farmers want to sell direct, they have to have the
physical and financial capability and resources to perform these
marketing functions."
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Marketing to restaurants and food retailers.
A growing number of natural and specialty food stores are expressing interest in selling local farm products. Several nonprofit organizations are working to establish links between growers and chefs. Encouraging restaurants to use local produce and meats and promote them on their menus may help build a retail customer base for both local farms and dining establishments. Contact with restaurants and food retailers also helps keep farmers informed about trends in the food industry.
Farmers' markets.
Farmers' markets can be a boon to small and medium-size growers, since they give growers access to a large base of customers. Most markets are open-air public spaces where farmers gather to sell homegrown products. The markets are good for the city as well as the farmers, as they attract customers who patronize other downtown businesses.
Large growers usually sell their produce by the truckload.
The time and
labor involved in handling smaller quantities is not cost effective.
However, with farmer-operated local distribution centers, truckloads of
produce can be distributed to vendors at farmers' markets, street
vendors and local restaurants, thus allowing farm operations of all
sizes to benefit from direct marketing opportunities — and to provide
the community with a supply of fresh local produce.
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As
Gail C. Stern points out:
"In certain areas of California, open air markets have stone floors
and booths centered around an open social/eating area. Booths around
this area support the purchase of local fresh fruits and vegetables.
Restaurants cook local fresh fruits, vegetables, seafoods and meats and educate the public on a personal basis as to the benefits of home grown foods. Support booths include culinary shops offering hard to find food items such as spices and cooking utensils. This could be expanded to Florida, showcasing our wonderful diversity of growers and products."
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Community supported agriculture.
Community supported agriculture is a relatively new form of direct marketing. CSA farm customers pay for a share of the harvest at the beginning of the year and receive a weekly bundle of vegetables and fruits throughout the growing season. This system takes some of the risk out of farming and shifts the time that growers must spend on marketing to the beginning of the year. Some organizations are working to build CSA networks that would allow individual growers to offer a larger selection of farm products to their customers.
The problem with direct marketing, selling to restaurants, farmers markets and community supported agriculture is that these strategies are usually appropriate only for small farmers. And, as
Pat Cockrell
of the Florida Farm Bureau Federation points out, "Government has already
forced out the small farmer. Most large operations don't have time [for
these strategies] ... [There is] no way to really impact the industry.
This works around the edges."
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Develop funding strategies to pursue these ideas.
Tim W. Williams
picked up on this
thought by suggesting that "we should do more with the powers
of the Capper Volstead Act and other vehicles to collectively market
and share information/marketing power. The Capper Volstead Act is
the federal law allowing agricultural cooperatives to operate
outside the anti trust laws. This law allows the ‘cooperative
structure' to exist ... Sunkist, Golden Gem, etc. The Florida Fruit
and Vegetable Association also has set up numerous ‘marketing
exchanges' using powers available through the CVA.
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These
exchanges work fairly well and could even improve if given the
opportunity . I believe this vehicle and others available should be
explored and applied to all ag in Florida. We must find a way to
command more return to the grower. Whether we raise chicken, corn,
avocados, tropical fish, or boniato, there must be a better
marketing tool available."
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Education
Encourage local restaurants and stores to feature local produce,
and to provide
information about the origins of the produce they use — even including
profiles and visits by the growers who produce the foods being used, and
listing farms and farmers on menus.
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Encourage restaurants to feature specials with fresh ingredients
produced by "farmers of the week."
All ingredients in meals listed, with information on where
ingredients come from. Effort made to increase patrons' "food
appreciation" by showing connection between each dish that is made,
the people who grow and produce its ingredients, the places where
the ingredients come from and the effort and care that go into
producing, harvesting, processing and preparing the ingredients in
each dish — from farm to table.
"Farmers of the Week" prominently displayed through posters, displays, videos and/or live appearances. Part of restaurant proceeds could even go to the "Farmers of the
Week."
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(There is not complete agreement on this approach. Rick Roth says: "Farmer of the week program [is] too time consuming for the benefits.")
Establish chain of "farm stores"
in shopping malls with specialty foods and gift foods; gallery with
wildlife and nature photos taken on ranches and farms (from
Bud Adams,
for example), photos of food and farms, farmer of the week photos and
drawings; products from conservation, farm and ranch organizations;
publications from conservation, farm and ranch organizations;
information on conservation, farm and ranch organizations; web site
links to conservation, farm and ranch organizations; membership sign ups
for conservation, farm and ranch organizations; food nutrition and
safety information; and ongoing story of our food: how it's grown, who
grows it, how it gets to our tables.
Promote agri-tourism.
Several state and
local governments offer workshops for farmers who are interested in
developing recreational businesses. Nature-based tourism and
agricultural tourism are growing rapidly in popularity. Entrepreneurial
growers can offer educational opportunities in conjunction with their
regular operations and generate new sources of revenue.
Sponsor special events to highlight agriculture's role in the economy, environment and landscape and feature selected products.
Include agriculture in the
expansion of Ft. Lauderdale's Museum of Science and Discovery.
Other Suggestions
William K. Crispin, a Dade County attorney representing owners and operators in production agriculture, says:
"Agriculture's role in carbon sequestration, carbon as a new agricultural commodity, needs to be [given] more emphasis ... The USDA's recently issued Economic Analysis of U.S. Agriculture and the Kyoto Protocol makes a good case for production agriculture to gain economic benefits from carbon sequestration; the public relations benefits are another huge benefit. Certainly Florida being a state whose exposure to the effects of global warming is terrific ought to be a leader on this subject." Crispin goes on to note that "The South Dade Soil & Water Conservation District is establishing a carbon sequestration pilot project on agricultural lands it manages."
"Levy a tax on imported Ag products similar to the bed tax and redistribute the income from the tax to the Ag operators in each county, with a percentage going to research and a percentage going to low interest loans/beginning farmer (5 years or less). Use county Farm Service Administration (FSA) to administer the program. Take a percentage of the ad valorem taxes and do the same thing."
" Beef up Ag disparagement laws."
Develop a national food security policy.
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As
William K. Crispin points out: the nation's Farm Bills "historically have been titled the Food Security Act, [de]noting that the production of food and fiber within the country has been an area of national security."
Crispin also notes we should bear in mind that Florida Statutes, Section 604.001,
already states:
1.
It
is the public policy of this state and the purpose of this Act to
achieve and maintain the production of agricultural commodities for food
and fiber as an essential element for the survival of mankind.
2.
The production of agricultural commodities in this state is a large and basic industry that is important to the health and welfare of the people and to the economy of the state.
3. A sound agricultural industry in this state requires the efficient and profitable use of water and energy and many other natural, commercial, and industrial resources.
4.
The efficient and profitable use of energy and water resources in agricultural production in this state is often difficult to achieve because of problems that are not well known or fully understood by the people, such as weather, climatic changes, and market conditions.
5. It is important to the health and welfare of the people of this state and to the economy of the state that additional problems are not created for growers and ranchers engaged in the Florida agricultural industry by laws and regulations that cause, or tend to cause, agricultural production to become inefficient or unprofitable.
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