by Tamara Scully
There isn’t a set definition of a local or regional food system within the USDA. But that doesn’t mean that local food isn’t a priority. In fact, local food systems are definitely on the USDA’s radar, and all initiatives focusing on local food are coordinated via the prominent Know Your Farmer/Know Your Food program.
Elanor Starmer, USDA’s National Coordinator and Advisor for Local and Regional Food Systems, outlined the characteristics of a local food system to a national audience, via a live webinar, “The Role of Cooperatives in Local Food Systems Development,” held earlier this fall. Local food systems have all phases of the lifecycle of the food take place within a defined region, Starmer said. And, the benefits of such a food system impact the immediate community. These benefits include social, economic, environmental and nutritional improvements. Additionally, products in a local food system are identified as “local,” and “a lot of other values are conveyed with that product,” she said.
And don’t think it’s all about vegetables.
“More than half of all farmers, who we surveyed, involved in local food are doing livestock production,” she said.
Local food access
Jim Barham, USDA Agricultural Economist, identified regional food hubs as a key component of a local food systems. These hubs, he said, work on behalf of local farmers to aggregate, distribute and market local foods. Historically, many farmers’ cooperatives acted as food hubs do today, being “far more engaged” in the process than a distributor would be, and insuring “a decent living for farmers.”
Food hubs have developed in areas where small and mid-size growers are located, such as the Northeast, Mid-Atlantic and Upper Midwest, in order to aggregate the supply to meet consumer demand. Over one-half of the food hubs in operation today were started less than five years ago. Some are farm-to-business operations (29 percent), some are farm-to-consumer (39 percent), while 32 percent are hybrids models, providing services to both sectors. One myth is that food hubs rely on grant funding. Fifty-one percent of food hubs rely on no grant funding, and only 17 percent are highly dependent on funding.
Privately owned food hubs account for about half of the roughly 300 hubs counted by the USDA. Less than one-third are non-profits, and the remainder — about 60 — are cooperatively run. The cooperative food hubs can consist of producer members, consumer members, or both, Barham said.
Barham used Tuscarora Organic Growers, a Pennsylvania cooperative established in 1988 and primarily serving the wholesale market, as an example of growers’ cooperative. He noted that 75 percent of the sales revenues go back to the farmers. The Oklahoma Food Cooperative, formed in 2003, is a 90 producer member and 4,000 consumer member hybrid cooperative for locally-grown and handmade items. They aggregate and deliver food to 43 sites, taking orders online. Producers retain ownership of the product through delivery, and farmers are paid on delivery.
Margaret Bau, a Cooperative Development Specialist with the USDA’s Rural Development program, stated that cooperatives play a major role in developing a local food system, including acting as a broker to get food into local institutions. What works best is when buyers have one point of contact, producers are left free to do the growing, and the cooperative serves as the coordinator between the two, performing quality assurance, aggregation, delivery and invoicing duties. But cooperatives are not always successful.
Developing a cooperative food hub
The first step in successful cooperative development is to honestly assess members’ motives. The model is not going to work for all farmers. It is a wholesale model, she said, and pricing will be less than for direct retail sales. It also is not going to work for all institutions, as there will be some increase in food costs associated with local sourcing.
The first lesson for successful cooperatives is to work with experienced farmers and to not promise things that you cannot deliver. Lesson number two is to raise capital prior to launching, and to have a business plan and feasibility study completed. The third priority is to hire an experienced manager to handle the complexities of food marketing.
“It’s difficult to move forward in a business model when you’re dependent on volunteers,” Jan Tusick, director of the Mission Mountain Food Enterprise Center in Montana, said. Tusick has been involved in food hub development, including shared use food processing facilities development, and the USDA’s “group GAP” pilot program.
The Western Montana Growers Cooperative is one of the pilot sites for the group GAP, Tusick said. Group GAP creates an umbrella, where some cooperative members will be GAP-certified, while others will “be incubated” in their GAP planning. Training and internal audits will be performed by the cooperative for these members.
“The small-scale producer does have some barriers to meeting these requirements,” Tusick said of GAP, and the group GAP will help to overcome some of the concerns and issues.
Karl Sutton, a farmer and member of the Western Montana Growers Cooperative explained how the cooperative has helped keep his farm viable. The WMG Cooperative has nine members providing 68 percent of the sales, he said, but they do offer opportunity for small growers wishing to become members. Offering “a full plate of products,” the cooperative has markets spread across the state. A diversified marketing scheme includes natural food stores, restaurants, institutions, a CSA program and grocery stores. As a small grower, aggregation has helped him to increase his sales. Sutton appreciates that there are two income streams — wholesale and retail — available to him at all times.
“The USDA is very interested in promoting local food systems, and is involved on both the policy and the outreach levels. Local food systems offer increased access to healthy food, preservation of farmland, new farmer development opportunities and economic development.”
“Our doors are open for local food producers and businesses,” Stramer said.