Direct Marketing New Markets for Small Farmers Direct Marketing In

Direct Marketing New Markets for Small Farmers 3. Direct Marketing In Australia, direct supply relationships between larger farmers and supermarket chains have been established as a result of improved communication technology (Barr, 2002). In the USA, small and mid-sized farmers are increasingly using direct marketing to sell agricultural products to end consumers. Through this shortening of the supply chain they are earning a greater share of the consumer dollar and boosting economic returns from agriculture. Direct marketing enterprises are described in this chapter and include farmers’ markets, roadside farm stands, community supported agriculture (CSA), pickyour-own farms and agritourism. Direct marketing is closely linked to local food systems (Section 2.4). 3.1 Consumer demands create new markets Increasing consumer interest in less processed, safe, high-quality foods and in foods produced in ways that protect the environment and enhance the quality of life for producers has opened up new opportunities and potential markets for small farmers (HAWCAEP, 2001). Although this trend, and the product demand it has generated, is small in comparison to the demand for conventional food products, it has grown sufficiently in the last decade to merit attention from producers, policy makers and researchers (HAWCAEP, 2001). Establishing a direct farmer-consumer relationship can provide a small farmer a competitive advantage and give consumers assurance that their purchases are returning value to the farmer, the environment and their community (NCSF, 1998). Although this assurance is only verbal, or sometimes backed up by inviting consumers out to see the farm for themselves, the personal relationship and trust often is sufficient for many direct market consumers in the USA. The National Commission on Small Farms (NCSF) suggests it is important for the USDA to assist in linking county and city governments and support their efforts to link urban consumers with farmers who are producing food with attention to stewardship of natural resources. In Australia such initiatives may need stronger credibility to provide assurance, such as an audited environmental management or quality assurance system. 3.2 Farmers’ markets One of the most well known forms of direct marketing in the USA is farmers’ markets; where growers sell directly to consumers at regular (usually weekly) markets in urban settings. Over 100,000 growers are estimated to be involved in over 2600 farmers’ markets throughout the USA (Gradwell et al. 2001). Sales at farmers’ markets totalled US$1 billion in 1999, with most of the money going directly to small family farmers. Farmers’ markets are said to “repersonalise” food purchase and consumption as they enable interaction between producers and consumers (Gradwell et al. 2001). Direct Marketing Farmers’ Markets 3.2.1 Organisation of farmers’ markets Farmers’ markets usually operate at specific locations on certain dates. Many markets establish rules and limit stall space, often keeping a waiting list for stall vacancies. These markets can be organised by the Chamber of Commerce, a city association, a community organisation such as Rotary, farmers themselves and/or extension (usually extension staff help only in the initial stages). Farmers’ market in California. Barbara Lovitt is a farmers’ market specialist at the Iowa Department of Agriculture and Land Stewardship. She says that market organisers who are voluntary tend to “burn out.” Barbara suggests that vendors pay a fee so that a market manager can be employed. Payment can also ensure the vendors feel they have a stake in the market, and encourage them to participate every week. Many markets charge a weekly fee for growers to participate, usually either an up-front payment or a percentage of gross sales. In Iowa, the manager of a farmers’ market determines the boundaries of where eligible produce can be grown. Barbara points out that if the area is too small and there is a hail storm that wipes out significant parts of the region’s crop, then that rule will hurt the market. Barbara advocates a variety of products should be available at a market, not just fruit and vegetables, but products such as baked goods and arts and crafts. Others suggest that dissociation from groceries has a negative impact and makes the market more like a fete or fair, reducing returns to food producers. 3.2.2 Promoting farmers’ markets Advertising for farmers’ markets can be inexpensive but labour intensive – for example, asking local businesses to put notices in waiting rooms and staff rooms. Another method is to print flyers that non-food local businesses (eg pharmacists, hardware stores) can place in shopping bags. Newspaper articles are another method of advertising and Direct Marketing Farmers’ Markets Barbara Lovitt suggests these could include a list of the latest produce available at the market, a recipe and, if applicable, a list of upcoming guests. 3.2.3 Support for farmers’ markets New York, Massachusetts, Washington and New Mexico all have farmers’ market associations, but not necessarily with any state government input or state coordinator as in Iowa. Some south-east states have markets as well, North Carolina has five and the state government provides a link to them from their marketing web page http://www.agr.state.nc.us/markets/facilit/farmark/index.htm. A non-profit farmers’ market association has recently been established in Iowa, and for many years the Iowa Department of Agriculture and Land Stewardship has provided assistance to all markets. The Department has developed a manual and other items (for example, promotional stickers and copies of rules that existing markets have developed) for people who are interested in establishing a market. California has a number of markets, promoted through the Californian Small Farm Centre (Section 4.3.2). Promotional sticker for Iowa produce. Farmers’ markets can be a useful tool for small farmers and communities and traditionally Cooperative Extension have had little to do with them. As such, it has been suggested that Cooperative Extension staff should be trained in direct marketing techniques and promotion of farmers’ markets. It is recommended that the trained extension personnel should then work with farmers and others to support events that feature locally produced agricultural products (HAWCAEP, 2001). An extension of farmers’ markets is urban and suburban agricultural fairs. Fairs can feature produce from local farmers, and foods prepared by local restaurants from locally grown products. The HAWCAEP study (2001) recommended that the USDA should fund and provide technical assistance for such fairs. 3.2.4 Iowa’s farmers’ markets Iowa farmer's markets generally only contain Iowa grown produce, however there is no regulation from Iowa Department of Agriculture and Land Stewardship. There are over 125 markets in Iowa, all of which are organised differently. For example, in Iowa’s capital city, Des Moines, one market operates 4-8pm Thursdays and local stores stay open late, there is live music and beer for sale. Private businesses and the Chamber of Commerce donate funds (to hire security, pay a manger and cover overhead costs) and Parks and Recreation provide tables and chairs. The local radio station sets up a stall and provides the equivalent of US$30,000 worth of advertising. A market in another town has a different guest each week. For example, flower growers (instead of just fruit and vegetables); the Chamber of Commerce (promoting any upcoming festivals); the Aquatic Centre (promoting their opening and giving away passes); the historical centre (selling books); and cubs (selling lollies and homemade goods). There are eleven farmers markets per week in Des Moines. The population of Greater Des Moines (includes outlying suburbs) is 250, 000. The Saturday market is the biggest and is very cosmopolitan – with a large range of produce. Barbara Lovitt says it is Direct Marketing Farmers’ Markets important to encourage Asians/Hispanics, or any local community of another culture, to grow for the market, because then the farmers’ market will attract customers from different demographic sectors. 3.2.5 California’s farmers’ markets Farmers’ markets in California need to be certified and locations and producers are approved by County Agricultural Commissioners. Producers need to be actively working the land that they own, rent, lease or sharecrop. Also the produce must have been grown within California. The number of growers at a market ranges from 5 to 100. Most products (fresh fruit, vegetables, nuts, eggs, honey, flowers and nursery stock) do not have to be in standardised packs of certain sizes or with labels. Jams and meats may be sold but these products need to comply with other standards (Humphrey and Mussen, 1995). California’s farmers’ markets have strict rules regarding their operation and many people in the USA suggest that this is partially due to a number of large fruit and vegetable growers and companies influencing government policy to increase regulations, which reduces the number of farmers’ markets and therefore diminishes competition. Californian markets require a lot of paperwork because of the high number of regulations and therefore often paid managers run more than one market (in states requiring less paperwork volunteers are more likely to be willing to manage markets). 3.2.6 Diversity of products Mark Gaskell, a small farm Cooperative Extension officer, noted that many of California’s farmers’ markets are saturated now and it is difficult for new growers to be involved unless they have a very different product. Market managers have the final say in the number and type of stalls allowed at the market. Generally a manager will limit the number of stalls selling the same product, to ensure variety for consumers, and reduce competition between growers. The Santa Barbara market is on the coast, so fish is sold there as well as farm products. Because of the need for varied products Mark believes that products such as coffee, not traditionally grown in California, may have a niche role. Market managers would be likely to allow a new stall at a market if a new product was available for consumers. 3.2.7 Customer loyalty Jennifer Lenet has been growing berries, chestnuts and avocados for four years on the central coast of California. In peak season she receives six times the supermarket price for blueberries at most of the eight farmers’ markets she attends. At the beginning of the season her price is comparable to the supermarket price, but the stores reduce their price as more berries become available in the peak production period. Jennifer says she receives the premium price because her customers are loyal, they prefer the taste of her Direct Marketing Farmers’ Markets berries than what is available in supermarkets, and because her produce is organic. Jennifer tries to look Jennifer Lenet with Mark Gaskell, small farm advisor, inspecting raspberries. after her customers and provide them with products they want, for instance, she provides a mixed berry pack consisting of raspberries, blueberries and blackberries. There are potentially twelve markets, which Jennifer could participate in, but the time required to attend all markets in the region would not provide enough return to justify the lost time on farm. 3.2.8 Added benefits of farmers’ markets Farmers’ markets have become known for providing other services or benefits to consumers beyond fresh and novel products. For instance, farmers’ markets are often part of agritourism programs. In addition, many markets provide a festive atmosphere with live music and other entertainment, so food shopping is couched within a larger social event (Abel et al., 1999, cited in HAWCAEP, 2001). One of Iowa's farmers’ markets is open one day per week between 4 - 5:30pm, to allow people to come after work. Located in the court house square, in the middle of town it is a major social event for the community (population 2380). Other benefits conferred by direct marketing initiatives are discussed in Section 3.3. 3.2.9 WIC farmers’ markets nutrition program WIC (Women, Infant and Children) is a federal government program where nutritionally at risk women, infants and children are given food vouchers that they can redeem in supermarkets. In the WIC Farmers’ Market Nutrition Program farmers’ markets coupons are issued and these cannot be used in supermarkets or vice versa. Markets in Iowa are involved in the program and two people at Iowa Department of Agriculture and Land Stewardship administer it. The staff on the Iowa Farmers’ Markets Nutrition Program need to certify individual producers and whole markets. Sometimes they may need to verify where produce was grown (if there have been allegations from other vendors), because for the WIC program all produce must be Iowa-grown. Not all farmers’ markets are in the WIC program, or even all vendors within one market. Markets have to meet certain criteria - they have to be open a certain number of hours and have at least five Iowa grown fruit and vegetables for sale. Generally markets become WIC certified, so they attract more consumers from different demographic sectors. Vendors receive a sign to display if they are part of the WIC program (and there are regulations governing how to display that sign). Direct Marketing Challenges and Opportunities 3.3 Benefits of direct marketing Direct marketing has been acknowledged as serving a community – building function, through interaction between local farmers and non-farmers in a community. Direct marketing relationships, by their very nature, encourage the creation of social capital – a type of social resource associated with trust and networks, useful for purposes beyond the direct marketing business (Sharp et al. 2002). For example, building a coalition of support for agriculture in a rural-urban setting, or networking between farmers to improve their businesses. Direct markets are often specialty markets appropriate for small farmers who have the capacity to move smaller amounts of product or wish to experiment with novel crops and products and gain customer feedback (NCSF, 1998; HAWCAEP, 2001). Direct marketing is of particular importance to small farmers when their produce is too specialised, too perishable or the volume too small to sell through conventional channels. Use of direct marketing opportunities can allow farmers to experiment with diversifying into new products. This is beneficial because an analysis of the profitability of small farms in the USA indicates that diversification is a significant factor explaining differences in the level and variability of income between higher and lower performing small farms (Hoppe, 2001). A roadside store is a good option for farmers on major roads near urban centres. 3.4 Challenges of direct marketing Although many benefits are generated from direct marketing, producers in the USA acknowledge challenges, particularly the large amount of time and effort it takes to develop customers for direct markets. According to one farmer in the USA, “the easiest part is to make a product that tastes good, the hardest part is distribution and sales” (Humphrey and Mussen, 1995, p6). Karen Armstrong-Cummings, a member of the USDA Small Farms Advisory Committee, says that farmers cannot rely on direct marketing to make a living, at least not if they only have one product. Similarly, Dan Morrical, an extension officer in Iowa, said direct marketing is a tremendous challenge, it’s not easy and it takes a lot of time. Direct Marketing Innovative Programs Another problem with direct marketing is volume. For instance, half a hectare of peaches can produce too many kilograms of fruit to be able to sell it all at a farmers’ market within a short space of time. Direct marketing to consumers may be a great opportunity for small farmers in Australia, but most likely only for those farmers close to large urban centres. Hurdles, such as a willingness of consumers to change their shopping habits, and their expectations of year –round availability of produce, would need to be overcome for direct marketing businesses to prosper. Food safety is another challenge for farmers involved in direct marketing, this is referred to in Section 2.4.3. Further information on benefits to consumers, communities and producers involved in direct marketing, and challenges facing direct marketers, is contained in Iowa CAFÉ, a resource and workshop manual on community agriculture and food enterprises. (Available from the author of this report). 3.5 Innovative programs A number of innovative government programs and policies are in place in the USA to assist farmers involved in direct marketing enterprises: • The USDA has designed a Farmer Direct Marketing Action Plan to assist small farmers (http://www.ams.usda.gov/directmarketing). A week of the year has been designated National Farmers’ Market Week. Also, a bibliography of information on direct marketing strategies, for academics, extension staff, nonprofit groups and farmers has been created. The Washington DC USDA office manages a farmers’ market outside their building each week and this is now being repeated at other federal properties (http://www.ams.usda.gov/farmersmarkets/USDA_markets.htm). • A number of government agencies and non-profit groups provide directories of direct marketing businesses for farmers, retailers, restaurateurs and consumers. For example, Farm Fresh 2000 is a publication by the Iowa state government which lists contact details (free of charge) for farmers’ markets, pick-your-own strawberry producers, fruit and vegetable growers, honey producers and Christmas tree producers, to assist consumers in locating Iowa grown products. The USDA Farmers’ Market Directory, lists nearly 3000 markets operating throughout the country (available in hard copy or on the web http://www.ams.usda.gov). • Various Cooperative Extension Services provide fact sheets for direct marketers. For example, Kentucky Cooperative Extension developed a folder for the direct marketing of vegetables, which is held in all the state’s extension offices. (http://www.ca.uky.edu/agc/pubs/agpubs.htm - see ID-134 – Marketing options for commercial vegetable growers; ID-107 – Understanding produce marketing for Kentucky’s direct markets; ID-106 – Promotion and advertising for Kentucky’s direct markets). The Kentucky Cooperative Extension Service also provides notes on storage tips/requirements and recipes for vegetables, which farmers can hand out to their customers. These are available both on the web Direct Marketing Messages for Victoria and in extension offices. The Extension Service suggests farmers place their own label sticker on the handouts as a marketing / promotional initiative. 3.6 What might Victoria learn? Many Victorian institutions embrace mission statements based on the concept of sustainable economic, environmental and social development. This may be possible to achieve in some areas of the state through fostering direct marketing. Direct marketing is not well established in Australia, whereas in the USA there are over 2600 farmers’ markets generating US$1billion in sales in 1999 and over 1000 Community Supported Agriculture enterprises exist (Gradwell et al. 2001). Harvest day on a Community Supported Agriculture farm. There is a need to investigate further the benefits that direct marketing enterprises might produce for communities within Victoria, and how viable different schemes may be. This might best be carried out through a joint research project between institutions, with communities being trained to be able to conduct much of the market research and trials themselves. The following sections outline the relevance of direct marketing to areas around Melbourne, the benefits of direct marketing and the case for government involvement in development of such enterprises. 3.6.1 Direct marketing in the green wedges Direct marketing should be of particular interest to the Victorian institutions with the advent of the Melbourne 2030 strategy. Through this strategy ‘green wedges’ will be established in rural areas around metropolitan Melbourne. In these areas priority in planning and development will be for agriculture, conservation, natural resource-based uses, tourism and the protection of important water catchments. Direct marketing initiatives would be well placed to meet the green wedge purposes of providing productive agricultural uses and tourism, preserving open rural and scenic landscapes and also potentially contributing to the biodiversity and environmental health of the city. Direct Marketing Messages for Victoria Proposed green wedge legislation includes changes to planning controls, which will limit retail premises to markets, plant nurseries, primary produce sales, and restaurants, only if they are used in conjunction with agriculture. This legislation would allow, and encourage local food system initiatives such as pick-your-own operations, farmers’ markets, community supported agriculture, roadside stands and restaurants promoting locally produced food. Melbourne 2030 aims to achieve a fundamental change in the relationship of rural areas to metropolitan Melbourne. Direct marketing can help achieve this, particularly through the social relationships it can build, reducing the urban-rural divide. Direct marketing enterprises could be a significant new opportunity for many farmers in green wedges who need to adapt to new regulations. 3.6.2 Benefits of supporting direct marketing Farmers, the USDA and universities in the United States have recognised the value of direct marketing as a means for small farmers to increase profits and diversify businesses. The direct marketing opportunities in Australia may be fewer, because of the smaller consumer market and the large distance for many producers to access highly populated regional centres, but they could still be quite beneficial for some small farmers. Around regional centres, there may be opportunities for marketing local food as part of tourism initiatives, for example either in restaurants or high profile regular markets, which might attract the growing retiree population, who may be looking for day trips outside of urban areas. Direct marketing can: • Enhance a sense of community and reduce the rural-urban divide; • Generate income for small farmers; and • Lead to improvement in environmental quality because the improved return farmers receive for their products may allow them to invest in natural resource management. Also, consumers who are interested in locally produced product (and social values of food production) are often also demanding environmental responsibility/ accountability. 3.6.3 Developing markets for small farm goods and services There is an economic argument for government involvement in establishing direct marketing enterprises. If small farms and the values they provide are considered important enough to be retained in our state, they need to remain economically viable. Although it is not the role of government to help individuals for private benefit, there may be a role for policy makers in facilitating the development of a market for small farm goods and services within the mainstream economy. Drawing on Australia’s Productivity Commission’s (Byron et al. 2002) work on markets for environmental goods and services, some concepts can be extrapolated to small farm values. Direct Marketing Messages for Victoria Byron et al. (2002) suggest that market based policy instruments can harness the innovative capacity of the private sector and make government policy catalytic, particularly where the absence of markets is the dominant feature. This (absence of market) is the case with values for small farms. Lack of markets reduces information available to decision makers to make appropriate choices, and this can reduce the overall wellbeing of society. In the USA there are a range of functioning markets for goods of small farms, through direct marketing enterprises, which use smallness of farm size and family farming as selling points. The current absence of a mainstream market for goods and services from small farms in Australia may be due to the low number of buyers and sellers, and uncertainty over the nature of the service being provided. In the USA a percentage of consumers, albeit small, are aware of the values provided by small and family farms and are willing to pay for these services. Byron et al. (2002) acknowledge that (for private conservation initiatives) challenges to marketing services can be educating and convincing the public of the mere existence and benefits of the service. Byron et al. (2002) note that it is costly to bring buyers and sellers together to establish a market. They state “Markets are not costless. In fact, the costs of establishing a market can be so high that markets fail to form — the so called ‘transaction costs’ may exceed the expected gains from trade.” Potential costs include the seller’s costs of identifying prospective buyers and revealing their willingness to pay and vice versa. Even where the costs of identifying potential clients and informing them of the product are low, other hurdles exist (Byron et al. 2002). An example provided by Byron et al. is the Calgar Springs Sanctuary located near Gosford on the SydneyNewcastle freeway. Despite being on a major tourist route, “red tape” has prevented any sign on the freeway to inform potential visitors of its existence. Government, through DPI extension and agribusiness programs, could potentially aid small farmers in overcoming some of these transaction costs. Extrapolating from the work completed by Byron et al. (2002), it can be suggested that by government taking actions that reduce transaction costs and improve information: • The innovation and initiative of the private sector may be tapped, unleashing new technologies and investment towards small farms; and • The resulting markets lower the cost of small farm policy, making previously unviable action feasible. Byron et al. suggest a fundamental step, after the problem and its underlying causes are understood, is to remove unnecessary legislative and regulatory constraints to potential markets. 3.6.4 Specific focus on direct marketing The Agribusiness Group of DPI has an export focus, their charter is: To provide leadership to companies, colleagues, allies and primary producers and to respond to opportunities from key export markets in a strategic and market driven manner. As such, they are unable to provide much support to domestic marketing. Admittedly most USA small farmers have not had significant government assistance in developing Direct Marketing Messages for Victoria direct markets, however the presence of non-profit farmer groups assisting small farmers makes a significant difference. Few well-established groups with a focus on small farmers exist here, partly due to the lower total number of farmers in Australia. If direct marketing is to become established in Victoria, institutions will need to concentrate on developing local niche markets. Development of niche markets and local food systems would include promoting the opportunities available with direct marketing, and assisting farmers to surpass initial hurdles such as food handling regulations and legal requirements, lack of post harvesting handling information and instruction, and lack of appropriate scaled technology and infrastructure to support local food systems. Promotion of the concept to the wider community would also be beneficial. Some consumer guides to Victorian Food and Wine already exist, such as the North East Valleys Seasonal Indulgence Food and Wine Guide, available at tourist information centres. This guide was funded by winegrower industry groups, local councils and a Federal Department of Transport and Regional Services grant. The recent compilation of a report on Community Supported Agriculture opportunities in Australia by DPI staff was a positive step towards promoting this form of direct marketing. Gippsland would be an ideal location to run a pilot program to promote and support direct marketing concepts because of the success of two recently established farmers’ markets in that region and the proximity to large urban centres. If Victorian institutions employed staff to handle producer enquiries and provide links to more information or suggestions on how to overcome challenges in direct marketing, this would help to put the state at the forefront of enhancing small farm opportunities. Direct Marketing Case Studies 3.7 3.7.1 Case Studies Roadside farm stand - Paul Dennison Paul Dennison is a Kentucky horticultural producer who traditionally only grew tobacco. The local extension officer, Chris Clarke, convinced Paul’s wife to trial vegetables in 1990. Now the Dennisons grow 12.5ha (30 acres) of tobacco and 16.5ha (40 acres) of pumpkins and sweet corn. They sell some wholesale, some through a co-operative and some through their roadside stand. They buy flowers, other fruit and vegetables and garden plants to sell in the store; all are grown in Kentucky. Paul says the difficulty in moving to vegetable production is that he no longer has a guaranteed price, like he did with tobacco. Paul says his wife has a natural flair for marketing. They also attend marketing conferences that the extension agents hold. They have a good relationship with the extension agency, which has established a blackberry variety trial on the farm. At the farm they have a petting zoo and, for part of the year, a straw bale maze, for children’s entertainment. Paul believes it is important to provide for children, to encourage their parents to come. They also hold field days, an antique tractor day (including live music), sometimes have a portrait photographer available on the veranda, and school children come on excursions to pick pumpkins. The store was originally a few tables in front of the house, then they built onto the barn, over time they added a floor, heating and had it fully enclosed. The store is open from early April until Christmas. Dennison’s Roadside Market. Direct Marketing Case Studies 3.7.2 Roadside farm stand – Billy Reid Billy Reid has a farm store, Reid’s Orchard, outside of Owensboro, Kentucky. The farm and store has been in the family for 128 years. Billy grows 28ha (65-70 acres) of apples, 1.25ha (3 acres) of peaches, 1.25ha (3 acres) of strawberries (half of which are used for a pick-your-own operation) and 0.1ha (0.25 acre) of thornless blackberries and raspberries, also for pick-your-own. Eighty percent of what is grown on the farm is sold in the store, the remainder to supermarkets. Billy also leases some land to a company for a golf driving range. He says he would make a lot more money by subdividing his land for housing. Billy says the petting zoo on the farm and the E. coli levels for cider production come under increasingly tough health regulations. The paperwork this creates for small operators is a significant challenge, he says. The non-profit Horticulture Society of Kentucky obtained grant funding for a number of small growers to buy small pasteurising equipment, so now all his cider is pasteurised. Billy has an integrated pest management program which has reduced his chemical use by 80 percent. Improved spraying equipment and high density planting has also helped. However he says that consumers do not understand that the levels are greatly reduced, if they see you spray once they get upset. Consumers also expect year round availability of produce because they are used to the supermarkets. Billy buys in some vegetables and seedling flowers for his store. The 83ha (200 acre) farm is run by Billy, his father and one full time employee. The store employs two full time staff. In October they hold an apple festival. This attracts 24, 000 people and 7000 cars. He has land set aside especially for parking, which he also cuts hay from. The festival involves 19 food booths and 19 craft booths. Reid’s Orchard. Direct Marketing Case Studies 3.7.3 Farm festival - Doug Bahl Doug grows 30, 000 pumpkins on 12.5 hectares (30 acres) on his family’s farm in Iowa. These pumpkins supply the local supermarkets and surplus product is sold to other stores. The family holds an annual pumpkin festival on the farm. Six years ago Doug planted Christmas trees, the first of which were to be cut in 2002. Some ornamental Indian corn, squash and gourds are grown specifically for the festival. Doug has no problem in finding markets for his pumpkins, and has adequate information from extension officers on production aspects. The festival has been run twice, in 2001 it attracted 5000 people. Doug buys apples from a local producer to sell at the festival. He also visits craft shows, identifies people and products he likes and invites them, for a small fee, to participate in his festival. He believes having some crafts encourages more people to the festival. In future he is considering buying the crafts to re-sell them himself. Doug identifies a role for the Extension Service to facilitate networking of people like him with other small producers who have roadside stands, so they can be part of the festival too. The Extension Service currently produces a brochure of where to find pickyour-own berry farms, but nothing about his enterprise. Brochures that promote a number of small farms avoid government providing individual benefits, whilst helping establish a market for small farm goods and services. Government support in helping establish a market in the mainstream economy should in the long run reduce the need for government support of small farms, as the goods and services will be valued in commercial markets. Doug says in the first year the festival was difficult to organise, but the second year was a lot easier. Part of the difficulty is that Doug works full time, 370 kilometres away from the family farm. The sales from pumpkins, Christmas trees and the festival are to raise money so that Doug can buy the family farm. Challenges for Doug relate to insurance. He cannot obtain crop insurance for fruit and vegetables and although he has liability insurance for the festival he is concerned that if someone did sue the insurance would not provide adequate coverage. Direct Marketing Case Studies 3.7.4 Community supported agriculture - Angela Tedesco Community Supported Agriculture (CSA) is an agricultural production/marketing system where a farmer (occasionally farmers) produces fresh vegetables, fruits, herbs and flowers (and sometimes meats, eggs, fibre or preserves) directly for local community members; delivering the products weekly. CSA sees the sharing of the production risks spread equally between the farmer and the consumer. Members pay for their food up front, before the season commences, and are then kept involved in the farm’s activities with field days, newsletters and open invitations to visit the farm. If there is a drought or some other impact on yield then the members accept that risk. Angela runs Turtle Farm, a certified organic CSA and pick-your-own strawberries business, located just outside of Iowa’s capital city, Des Moines. Angela started her CSA business with friends as customers. Numbers increased in the second year through word of mouth and now she has customers who allow her to place advertising flyers in their stores. She is also listed on an internet CSA site and has her own website – http://www.turtle-farm.com. Angela considers her business to be a small CSA, she has 90 customers who receive one box of fruit and vegetables per week. She also grows flowers and herbs which are available for sale. She splits the CSA load into two delivery days per week. She has three drop off areas where customers pick up their boxes; two front porches and a church. The customers return the boxes, which can be collapsed for transport, each week. Turtle Farm employs one full time and one part time person. Membership costs US$375 for a year. Alternatively people can work for their membership fee by contributing three hours every harvest day (once per week) for 20 weeks. In 2000 she had 4 customers take up the labour offer. A difficulty for customers with this option can be transport and child care. Angela Tedesco, Turtle Farm. Angela says that CSA is not a model for all consumers interested in direct marketing or fresh produce, some people might prefer farmers’ markets for instance. To be interested in a CSA the customer needs to use a range of vegetables so that they do not feel they are wasting money on food they do not eat. Also CSA only suits people who do a lot of cooking (as opposed to eating out). Sometimes customers will share a box between two families. CSA farmers work together through organisations such as Iowa Network for Community Agriculture (INCA). They have a philosophy of forming a support network, not competition with each other. Through INCA, CSA farmers buy wax delivery boxes in bulk (minimum 600). Non-profit organisations such as INCA often rely on government support to operate. Direct Marketing Case Studies Turtle Farm is 8.3 hectares (20 acres) in size and only one quarter of this land is under cultivation for saleable product– 0.83 hectares (2 acres) for pick-your-own strawberries and 1.25 hectares (3 acres) of produce for the CSA. Flowers, herbs and a cover crop of buckwheat to reduce weeds and to be turned into the soil to increase organic material, are grown on some of the other land. These plants also harbour beneficial insects says Angela. The remaining area is sown to grains and legumes such as rye, oats, red clover and lucerne, as well as some raspberries on a hillside to stabilise soil. Hay is made from the lucerne, which is spread over the raspberries and garlic (perennial plants) before winter. The area under cultivation for saleable product is rotated each year. The farm is located on a highway, which is ideal for the pick-your-own strawberry enterprise. Angela says the location of the farm for the CSA business is not critical. Angela lives in Des Moines, she only has a small hoop house for seedlings and storage shed on the farm. She also has a deep (180 metre) well for trickle irrigation. She did not want a shallow well because of nitrate pollution that can occur from livestock faecal matter and fertilisers from other farms in the catchment. Angela uses trickle irrigation because it uses less water, is targeted at the productive plants (not to weeds), and is directed away from the foliage, which helps avoid disease. Irrigation line damaged by coyotes, insects or people will be managed in the future with equipment to bury the lines. Angela maintains open communication with her customers, for example she welcomes her CSA customers to visit the farm at any time and organises specific events for her members. In summer she runs a field day and invites a beekeeper to the farm and hires draught horses to drag an antique potato plough, so that children and other customers can follow, picking up the potatoes. In the autumn she organises a dinner in Des Moines for members, where everyone brings a plate of food. A weekly newsletter is provided to customers with information about farm activities, an outline of the week’s vegetable varieties and a recipe. Angela believes it is important to educate her customers, for instance if she sees a snake she will write about it in the newsletter and explain how snakes are important to keep rodent numbers down. Direct Marketing Case Studies 3.7.5 Community supported agriculture - Ron and Jen Skinner Ron and Jen Skinner own a four-year-old CSA enterprise serving the towns of San Luis Obispo, Pismo and Arroyo Grande on the central coast of California. Membership costs US$540 per season. Because of the farm’s distance from towns Ron and Jen do not offer an option of working in lieu of a membership fee. They provide 180 boxes per week of mixed vegetables, fruit, edamame (edible soybean) and flowers, for 32 weeks of the year. They deliver the produce in eskys so it can sit out on a porch for some time without spoiling. However they are concerned about customers using the esky for meat at a BBQ, which could have health ramifications if not cleaned properly. A newsletter is included with the produce every week. The farm also sells produce at a farmers’ market, which contributes only 5% of the farm income but takes up one day per week in labour. As such this part of the business may be phased out and the CSA enterprise will be the sole focus. Kyle and Ron Skinner, Huasana Farm. The CSA enterprise started by using word of mouth and membership has increased each year. In the first year Ron and Jen had 25 customers, then 50, then 100 and in 2001 they had 180. The business also received newspaper coverage which helped boost numbers, however these customers are not as committed as the original members and some have been dropping out because 2001 was a difficult year and therefore the farm did not grow as many different varieties of vegetable as previously. Ron provides a pro rata refund if members drop out, so that he does not attract bad word of mouth. Ron would like to obtain credit card facilities because some customers have a low disposable income and have difficulty providing money up front, even if they have the option of several payments. Ron and Jenny’s core group of customers is very supportive, and when Ron suggested a discount for long term members they rejected it. These customers primarily wanted to support the farm and felt that receiving discounted food would jeopardise this. The farm employs three full-time staff as well as Ron and Jen, they now have part-time summer help as well. Ron found the first three years of managing the business very easy and only had complaints about excess food supplied. However in 2001 there were complaints of not enough food. Ron says the expansion was difficult and next year he will not expand past 200 members and he will ensure he hires extra help early in the season. Direct Marketing Case Studies Ron says that the timing of crops is very important to avoid climate stresses on plants. The produce is grown on 1.8 hectares. ‘Compost tea’ is sprayed for disease prevention and vinegar is used on weeds. No other sprays are used, which Ron believes offers a marketing advantage. In future Ron wants to organise better storage for root vegetables – garlic, onion, potato and sweet potato. Then he could mechanically harvest them all at one time, but use them in the boxes over an extended period. The farm has an open day/farm tour in spring, which most recently attracted about 150 people. In autumn the Skinners hold a party with children’s activities, live music and a recipe contest (with books as prizes). Ron says his customers are buying more than just vegetables, they are buying a service, which includes delivery, newsletters, a party and flowers. Newsletter and some of the produce supplied in a weekly delivery. School groups often come out to the farm and at least one customer will visit per fortnight – the farm is always open to members. To improve customer service Ron and Jenny run surveys three times per year asking what products their members would like to receive in the boxes.