Local-based, alternative-marketing strategy could help save more small farms

Rural Cooperatives, May-June, 2005 by Thomas W. Gray

* Cooperative farm stores--More prevalent in Europe and Canada than the United States, cooperative farm stores are small grocery stores oriented to carrying local products from farmers and food processors. Products carried may include dairy foods, meats, fresh and canned fruits and vegetables, root crops, mushrooms, dried beans and other legumes, wine and liquors, fresh-baked goods and condiments. These stores are generally owned by 10 or fewer farmers. Most numerous in France, these stores are vehicles for supporting and enhancing the local culture with local products, such as Roquefort cheese from Roquefort, France, and Kona coffee from Hawaii.

* Produce auctions--While not a new innovation, produce auctions have made resurgence in recent years, with many filling a niche demand for organic foods and fresh, local food production. Customers of these auctions are frequently roadside stands, grocery stores and restaurants. The auction houses typically provide not only the facilities, but grading services, pre-boxing and/or pallets, as well as collections and overall management. They represent an intervening link between producers and consumers, though they seek to emphasize localism.

* Cooperative marketing--Green and Hilchey argue that traditional agricultural cooperatives (meaning those formed in the 1930s and 1940s) have not been the choice of farmers seeking alternative agriculture strategies. In order to compete with large multinational investments firms, many older cooperatives increased scale and geographic reach. This has occurred to the degree that many have become large, bureaucratic organizations.

Size and bureaucracy tend to not easily lend themselves to experimentation with new "alternative agriculture" farm production products. However, new and much smaller cooperatives (those with less than $500,000 in gross sales, for example) are being formed in response to the mutual interests producers have in developing markets for crops and products that are out of the mainstream of usual production, Green and Hilchey note. This is particularly the case for fruit and vegetable production in the Northeast.

* Value-added activities--Value-added activity, in which farmers retain ownership of the product post-processing, can enable farmers to keep more value for their products. Value-added activities may range from capital-intensive ethanol plants and sugarbeet processing plants--which require relatively large investments from farmers and large workforces--to mobile meat processing units and "kitchen incubators," requiring much smaller investments and, typically, less than 10 employees.

* New-generation cooperatives--These co-ops are a relatively recent phenomenon, most being formed in the past 10-15 years. They generally are formed by farmers who want to process locally produced commodities, although not necessarily for local markets. Examples include ethanol and corn syrup from corn, biodiesel from soybeans, sugar from sugarbeets, pasta and bread from wheat, and beef and bison processing plants. Output of these firms may go into regional, national and international markets.