Question

1. What are some of the typical obstacles that communities face in establishing a local food system?

Answer 1

INTRODUCTION

Rural economy is depending more and more on the use of local assets and the ability to offer unique products or services matched to regional assets. There are growing opportunities in both foods that have a regional appellation and in the production of food for local consumption. The first provides an opportunity to market a region’s food products to a global audience, while the latter connects local farmers to the community in which they reside. Both provide an opportunity for increased value-added and can increase farm viability. Shorter, more localized food supply chains have been proposed as a vehicle for sustainable development.

In the last few years there has been not only a multiplication of studies and position papers on local food by non-governmental organizations (NGOs) and different networks, but also a growing interest by the public sector for local food, such as the ‘buy local’ campaigns and labels in many Canadian provinces and territories. Over the last 60 years, Canada’s overall food system has become more geared to large-scale systems of production, distribution and retail. There is now a growing interest in the production, processing, and buying of local food. New “local food systems” are being set up to organize the various components that will meet the needs of all the stakeholders in the community or region.

The Soil Association defines a sustainable local food economy as “ a system of producing, processing, and trading, primarily of organic and sustainable forms of food production, where the physical and economic activity is largely contained and controlled within the locality or region where it was produced, which delivers health, economic, environmental and social benefits to the communities in those areas”.

Local food system example of USA

Food and Nutrition Service Programs USDA’s

Food and Nutrition Service administers two important programs that promote the use of farmers’ markets, and are available in most States; the Farmers’ Market Nutrition Program (FMNP) and the Senior Farmers’ Market Nutrition Program (SFMNP). The FMNP was established by Congress in 1992 to provide Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) participants with coupons, in addition to their regular WIC benefits, that can be exchanged for eligible foods from farmers, farmers’ markets, and roadside stands.

Agricultural Marketing Service Programs USDA’s Agricultural Marketing Service administers several grant programs supporting local food initiatives across the country. The Federal State Marketing Improvement Program (FSMIP) provides matching funds to State agencies to assist in exploring new market opportunities for food and agricultural products, and encourage research to improve the performance of the food marketing system. In 2009, 8 out of 23 grants awarded went to projects supporting local foods, such as funding to improve the effectiveness of Colorado MarketMaker.

MarketMaker is a national partnership of land grant institutions and State departments of agriculture dedicated to building an electronic infrastructure that would more easily connect farmers with economically viable new markets. It provides an interactive mapping system that locates buyers (e.g., retailers, wholesalers, processors) and sources of agricultural products (e.g., farmers, farmers’ markets).

Community Supported Agriculture (CSA)

In the USA, there are 1000 CSAs with 77000 member and $36 million of income. The basic model is simple: consumers pay growers for a share of the total farm produce, and growers provide a weekly share of food of a guaranteed quality and quantity. Consumers typically pay two to five hundred dollars for a season’s share. It has been established that members would on average have to pay a third more for the same food at a supermarket. One study in Massachusetts indicted that a $470 share was equivalent to $700 worth of produce if bought conventionally. CSAs also encourage social responsibility, increase understanding of farming amongst consumers, and increase the diversity of crops grown by farmers in response to consumer demand. The central principle is that they produce what people want, instead of concentrating on crops that could give the greatest returns. In addition to receiving a weekly share of produce, CSA members often take part in life on the farm through workdays. Many CSA farms give out newsletters with the weekly food share, so that members stay in touch and know what crops are expected. Some 60% of CSA farmers say that the most successful aspect of their operations is the strengthened bonds with food consumers.

“Know Your Farmer, Know Your Food” Initiative

In 2009, USDA launched the “Know Your Farmer, Know Your Food” initiative, an agency wide effort to create new economic opportunities by better connecting consumers with local producers. As part of the initiative, several funding efforts and programs were announced to assist farmers, help consumer’s access nutritious foods, and support rural community development.

Bringing local food to local institutions

The Farm-to-School salad bar at Malcolm X Middle School in Berkeley, CA, proves that the fresh taste of locally-purchased foods appeals to kids of all ages. Consumers overall are disconnected from one of the most important components for their own health and happiness—the food they eat. Rarely do they have contact with or personal knowledge about the farms and farmers who grow their food. As a result, most consumers have very limited control over the quality and safety of their food. When small-scale farmers are able to sell their products to local stores and institutions, they gain new and reliable markets, consumers gain access to what is often higher-quality, more healthful food, and more food dollars are invested in the local economy. This publication provides farmers, school administrators, and institutional food-service planners with contact information and descriptions of existing programs that have made these connections between local farmers and local school lunchrooms, college dining halls, or cafeterias in other institutions.

New North Florida Cooperative of Small Farmers and University of Wisconsin campus diner service program

A non-profit organization acts as distributor and broker. A community-based nonprofit organization serves as a liaison between growers and institutional buyers. The organization receives food orders from institutions and coordinates with the cooperating farmers to fill and deliver the order.

All-Iowa Meals project with Iowa State University

A local wholesaler acts as distributor and broker. A local food wholesaler picks up, processes, and delivers produce to schools and/ or institutions.

America Fresh Distribution System

Farmers’ markets serve as the central location where schools pick up farm products. Schools or institutions purchase produce at a local farmers’ market. To ensure that institutional buyers get the type and quantity of produce they desire, orders are placed in advance with specific vendors. A coordinator is required to order, pick up, and deliver produce from the market to the schools.

Fresh Produce Program

Fresh Produce Program purchases food from farmers and then serves as vendor to the schools. North Carolina, Florida, Tennessee, Kentucky, and Washington State are working with the U.S. Department of Defense in coordination with the USDA’s Small Farms/School Meals Initiative. California and Illinois also have pilot programs underway. Food service companies as intermediaries in farm-to-campus programs. Private food service companies that contract with colleges and universities to procure, process, and deliver food to cafeterias procure some of their meat and produce from local farmers rather than through institutional brokers.

Some of the typical obstacles that communities face in establishing a local food system

A number of obstacle that stand in the way of growth of local food initiatives are given below:

Lack of financing

Local food projects, whether they are small agro ecological farms or the profit/non-profit organizations that organize CSAs tend not to be well endowed financially and thus depend on external financing.

Retailer Buying Habits

Large food distributors and retailers prefer year round purchasing contracts, purchasing from larger suppliers, and requiring a guaranteed food supply. The limited growing season represents a considerable challenge for producers to meet retailers’ demands.

Economic power

The food retail sector is marked by high rates of market concentration and food producers have no other choice but to go through conventional marketing channels such as supermarkets in order to survive. Supermarkets and their subcontractors often impose certain (often superficial) quality standards and minimum quantities that are difficult for local producers to meet. The revenues of large food retail chains also means they have a significantly larger marketing budget and can win price wars with smaller competitors. This is often framed as a question of competitiveness, but from the point of view of local food activists it is not. Supermarkets have been able to achieve economies of scale because they do not have to pay for the social and environmental costs of their business practices. The implication is that this is a case of market failure and that public policy should give more advantages to LFS rather than subsidize the agro-industrial model of production and distribution.

Knowledge

On the production and distribution side, it is mostly about LFS developers (from farmers to organizers) having the information they need to make LFS function: where to get funding, where to find physical space, relevant business skills, and also knowledge about each other. Networking is as important in alternative food value chains as it is in the conventional business world but the people working on developing LFS are fewer and far between. More important perhaps are the lack of in formation on the consumer and the lack of knowledge about the social and environmental consequences of the conventional food system.

Constrain Capacity Limitations Small, Local Growers

For producers of local foods, who often run small-scale farm operations, it can be diffi cult to meet intermediary demands for high volumes, consistent quality, timely deliveries, and out-of-season availability (Shipman, 2009; Sachs and Feenstra, undated; Abate, 2008; Gregoire et al., 2005; Guptill and Wilkens, 2002; Chefs Collaborative, 2008). It may be diffi cult for small local growers to scale up, as much time is spent off-farm, selling products to consumers. Findings from the USDA Agricultural Management Survey (ARMS) indicate that growers who work off-farm generally have fewer incentives to expand and become more effi cient than do small growers who do not participate in alternative, off-farm marketing activities. In other words, the incentive of smaller farmers to expand and become more effi cient is diminished as more time is spent offfarm performing additional entrepreneurial activities such as marketing at farmers’ markets.

Signifi cant costs of direct marketing and onfarm processing, especially those related to time and labor, can present obstacles to expansion of local food sales. Interviews with farmers in New York and California indicated that shortage of labor related specifi cally to marketing activities is consistently reported by farmers as being a barrier to direct marketing. Proximity to metro areas only somewhat alleviates labor constraints if farm wages and work availability are not competitive with urban labor conditions. Time involved in customer relations, travel and delivery, processing and packing, and scheduled harvesting to meet the needs of direct marketing varies across direct-marketing venues, but is particularly extensive for farmers’ markets and u-pick operations.

From the farmers’ perspective, marketing risks when selling in local markets include low sales volume, price competition from multiple sellers with the same product and local angle, rejection based on quality requirements, inability to meet specifi cations, inability to meet logistical requirements, and buyers backing out of contracts. These concerns are not easily managed by the smallest growers, particularly differences in specifi cations and packaging across outlets. Many farmers who successfully bridge multiple direct outlets invest in technologies and management strategies that permit the same harvesting, processing, and transportation systems to be used across outlets. For example, bagged lettuces can be sold to both school lunch programs and at farmers’ markets, possibly in different sized bags but using the same postharvest supply and marketing chain. By having a single production process that appeals to multiple markets, risk of sales shocks in one outlet may be offset by availability of different outlets.

Obstacles to restaurant purchases include inconsistent availability and quality, diffi culty identifying reliable local suppliers, diffi culty in making purchases, and dealing with multiple suppliers . These concerns are echoed in surveys of institutional buyers summarized by Hardesty (2008): year-round availability, local and State regulations, working with multiple vendors, obtaining adequate supply, reliable food quantity, and on-time delivery.

While foodservice directors in Minnesota have expressed interest in a wide variety of locally produced products, many felt that they had limited knowledge about what products were available locally and at what times of the year. Some of these obstacles can be reduced by training sessions that explain what is grown in the region, and teach foodservice staffs how and when to introduce these products into school menus. In addition, many directors noted problems fi nding farmers who have the needed product, price, and delivery capacity. In some cases where farmers lacked the delivery capacity to deliver to multiple schools, foodservice staff had to arrange transportation or deliver the food themselves. Time needed to negotiate terms and coordinate deliveries was cited by many directors as reasons for purchasing a limited number of local products. A signifi cant number of foodservice directors also expressed displeasure with products not being delivered at the date and time expected, and with the quality dimensions specifi ed. In most cases, the districts relied on a single farmer and had no contingency plan.

In addition to budget constraints, major challenges to local purchasing in hospitals include: large volumes needed; effi ciencies required in ordering, delivery, and billing; contract requirements with existing vendors; lack of staff skills in preparing fresh foods; and lack of administrative support. School lunch programs face similar constraints.

Some Federal purchasing programs may have an uncertain effect on local food procurement. USDA purchases and processes food through several programs including The Emergency Food Assistance Program and the Commodity Supplemental Food Program.Without a specifi c policy to encourage local purchases, these national programs may favor purchases from large suppliers who can offer discounts on pricing and can better facilitate bulk shipments.

Small local growers sometimes overcome scale limitations by pooling resources and diversifying tasks within the supply chain. Production pooling allows small local farmers to capture the advantages that come with larger scale production systems (economic and logistical effi ciencies), and may work to meet the supply requirements of large institutional markets. Based on their literature review, Vogt and Kaiser (2008) found that recommendations made by farmers to increase direct farm sales to institutions included building a local customer base and partnering with other farmers. They also found that the most commonly cited factor to increase the likelihood of farm to school program success was farmer co-ops/regional brokers to allow “one-stop shopping.” Interviews with small-scale farmers by Lawless et al., (1999) found cooperation between farmers in promoting or managing direct marketing ventures to be an important ingredient in their success. None of the farmers interviewed in the study expressed interest in expanding sales to local restaurants without working together in a joint effort.

Producers can move higher volumes of local food along the supply chain by using an intermediary to pack, distribute, or ship local products to consumers through traditional supermarket channels, restaurants, or institutions. Such intermediaries allow growers to spend more time managing the farm. However, Berkenkamp (2006) found few cases where school districts were working through distributors to purchase local produce on a large scale.

Regulatory Uncertainties

Uncertainties exist in regulatory scope and enforcement jurisdiction of local food requirements across State, County, and municipal lines, as well as between Federal agencies which may impede the fl ow of information between various regulators. For example, what may be a “voluntary” food safety requirement by the Federal Government may not be interpreted as such by enforcing authorities at the State level (Tropp and Barham, 2008). Another example is the application process for participation in the WIC Farmers’ Market Nutrition Program, which provides WIC participants with coupons that can be used at local food outlets. While the program is administered by USDA’s Food and Nutrition Service, it is implemented by various States, regions, and local entities that sometimes apply different standards for vendor participation.Lack of clear rules and jurisdictional lines sometimes means that growers must determine which regulations apply to their situation and who is responsible for developing and enforcing regulations.

Costs and uncertainties related to food safety and processing regulations affect direct-to-consumer marketing activities across State, county, and municipal boundaries, especially on-farm production and post-harvest handling practices. For example, there may be costs related to complying with State rules on processing, and uncertainty about whether direct farm sales are exempt from existing food safety and processing regulations in certain locations. Clearly stated health and safety rules and licensing and inspection requirements can facilitate the successful operation of farmers’ markets.

Conclusion

Local food systems have many benefits for farmers, consumers and communities, but re-embedding food systems in local places takes a wide variety of knowledge, skills and efforts. Across Missouri and across the country, farmers and researchers are experimenting with new crops, new soil management techniques and new varieties and breeds that can help them meet the demands of local markets. Businesses are responding to the demand of local consumers and developing relationships with local farmers to spur increased wholesale availability of local products. Food distributors are developing new strategies to efficiently pick up and deliver locally sourced foods, while also helping farmers guarantee the safety of their food. Individuals, consumer groups and food advocates are creating change by demanding increased availability, becoming educated on the importance of eating local and advocating for healthier, fresh and local food products from farmers.

Local food systems also require different types of infrastructure – from small packing and grading sheds on farms, to food hubs and distribution models, to new storage facilities or retail spaces. Because local food systems are generally small-scale, it is important for participants to thoroughly investigate food safety regulations, economic incentives and tax structures to support their development. Education — from producing in hoop houses to cooking fresh foods — will be a key component of strengthening and enhancing local food systems.