In a 1984 retirement speech delivered to his colleagues at Cargill, my grandfather called for a renewed focus on the people that agriculture serves. “What is good for producers and consumers,” he said, “is good for us.” His intention was to inspire a more efficient commodity business, but his message – that working in the interests of farmers and consumers will benefit the agricultural whole – resonates a quarter century later. As we search for a way to transition on a large scale to a more diverse and vibrant farming and food culture, we must focus on transforming the relationship between farmers and the people they feed.
The distended relationship between farms and individuals is the fundamental problem in the food system we’ve inherited. Supply chains and the corporate cultures that house them keep information isolated. Choices about what to produce and buy are limited to what merchants will trade and processors will sell. The realities of agricultural production bewilder the quarterly projections of Wall Street.
Yet efforts to circumvent the prevailing order abound. As Joanne Wilson rightly points out in this series, farms that traditionally depended on wholesale buyers increasingly turn now to direct markets. Farms do better when they plan crops, set prices, and choose markets based on intelligence from the people who actually eat their harvest. They also claim more of the dollar spent on their food when they sell directly to individuals (though because of inefficiencies in farmers’ markets and CSAs the profit margin on that dollar is not much higher than it is when a farmer sells wholesale). Despite their proliferation in recent years, these alternative models present substantial barriers – namely the cost to farms of finding and reaching a large customer base – that limit their widespread availability and benefits. Technology has the ability to level the barriers and move alternative models beyond the niche.
That technology has not yet turned the food industry on its head indicates how much complexity the food system presents. Reforming how we grow, seek, and consume food has meaning for our culture and our humanity that de-institutionalizing the rental car and hotel industries does not. Agriculture touches seven billion people with as many different palates, preferences, and nutritional needs. While technology has carved into the markets, products, and identities of almost every other sector, farming and food defy easy solutions. Environmental health, human health, economic relationships, market structures, personal histories, and food cultures are colorful and sometimes conflicting strands of the agricultural dilemmas we face.
To make lasting change in the agriculture and food sector, we need to prioritize two things: farms’ profitability and the affordability of food for households. We need to shift the balance of the consumer dollar to the farmer – the participant in the food system that serves the most critical function, takes on the most risk, and makes the choices that have the largest influence on the environmental, nutritional, flavor, and quality profile of the food we eat. The best way to do that is to give farms a way to sell their harvest directly to individuals.
The dual objectives of farms and their customers doing better go hand in hand, and to accomplish both we need to restructure markets. Companies that play in the middle of the agricultural supply chain do best when producers and consumers are separated by time, place, and information. In contrast, by giving producers and consumers a platform that coordinates transactions and the movement of goods from farm to household, Plovgh provides one example of how technology can make widely available the benefits of alternative markets that CSAs and farmers’ markets already provide on a small scale. Applying technology to models that restore the connection between farmers and the people they feed has the potential to make an already disruptive trend a new standard for agriculture.
This piece also appears on Plovgh and Food+Tech Connect.
Wednesday, September 28, 2011
Monday, September 12, 2011
New Agriculture Needs Out From Under the Corporate Thumb
Last week, Walmart announced a $1 million grant for Growing Power, a Milwaukee- and Chicago-based organization started by Will Allen that focuses on equal access to healthy food for all communities. The Good Food Revolution was aflutter with reactions. Should Growing Power accept Walmart’s support? Can big corporations really be part of the transformation in farming and food or are they merely participating to rack up do-gooder points?
In a reaction to Will Allen’s Facebook message explaining the decision to take the funding, Zac Henson declared, “The revolution will not be grant-funded.” Henson’s perspective raises a crucial and unresolved question: Can New Agriculture succeed without the financial and operational support of the corporate network it aims to subvert?
The problem with Growing Power accepting Walmart funding or pursuing the PepsiCo grant they’re after is not whether powerful corporate interests and dollars ought to be part of shifting the food system. They should. The agriculture movement is not exclusive – it has emerged from concerns shared by citizens, nonprofits, governments, and multinationals alike.
The deeper problem the funding decision exposes is that if New Agriculture relies on money and support from Industrial Agriculture (and I call it that very intentionally – I am talking here, as I have before, about those corporations that apply traditional notions of efficiency, economies of scale, and operational rigidity to an agricultural system that performs anything but linearly and predictably), then the paradigm of agricultural production and food consumption does not change. Instead, the predominant market system prevails and organizations like Growing Power that fuel the new model in fact exist within the dominant system as a subject of corporate efforts to participate in the cutting edge.
We need a more profound shift than that to sustain the agricultural resurgence we’re witnessing. In New Agriculture, decisions and information do not need to be centralized in the hands of a few powerful companies. Rather, a diverse base of producers and consumers is beginning to coordinate the production, marketing, purchase, and consumption of wholesome food with alternative markets, new tools, and inclusive approaches. It looks like Windowfarms providing farming kits to citizen growers. It looks like Plovgh giving farms a way to earn more for their crops by reaching their customers en masse. It looks like hundreds of thousands of farms in this country reclaiming their economic fate by putting their land into food crops instead of commodities and selling that food directly to the people who eat it.
Growing Power is part of the reason New Agriculture finally feels accessible, but their decision to take support from a corporate giant places them squarely within the corporate framework. Negative reactions to the organization’s decisions express the disappointment that a leader on the alternative path just nestled itself into the hierarchy it aims to change. Its values and mission just became a line item within Walmart’s annual report (or, worse, its Corporate Social Responsibility report) instead of a call for an entirely different way. It reminds us that we’re stuck.
To have the lasting impact that the world needs, New Agriculture needs to stand on its own. To do so it has to be profitable. New Agriculture does not need a re-funneling of corporate money, money that because of the dominant structure it perpetuates won’t give us the market changes that will keep farmers on the land, improve the quality of our soil, and yield healthful food crops and relationships across our agri-culture.
We need new business models that are built for New Agriculture, that reward the producer and the consumer, that value decisions that are optimal economically as well as environmentally and ethically, that give influence back to the people who grow the food and the people who eat it. Only when the companies that are clearing a truly alternative agricultural path are prepared to upend and eventually replace the old paradigm of the agricultural sector with connectivity, community, and environmental stewardship will we have a chance of sustaining the revitalization of our farms and food.
This piece also appears on Plovgh.
In a reaction to Will Allen’s Facebook message explaining the decision to take the funding, Zac Henson declared, “The revolution will not be grant-funded.” Henson’s perspective raises a crucial and unresolved question: Can New Agriculture succeed without the financial and operational support of the corporate network it aims to subvert?
The problem with Growing Power accepting Walmart funding or pursuing the PepsiCo grant they’re after is not whether powerful corporate interests and dollars ought to be part of shifting the food system. They should. The agriculture movement is not exclusive – it has emerged from concerns shared by citizens, nonprofits, governments, and multinationals alike.
The deeper problem the funding decision exposes is that if New Agriculture relies on money and support from Industrial Agriculture (and I call it that very intentionally – I am talking here, as I have before, about those corporations that apply traditional notions of efficiency, economies of scale, and operational rigidity to an agricultural system that performs anything but linearly and predictably), then the paradigm of agricultural production and food consumption does not change. Instead, the predominant market system prevails and organizations like Growing Power that fuel the new model in fact exist within the dominant system as a subject of corporate efforts to participate in the cutting edge.
We need a more profound shift than that to sustain the agricultural resurgence we’re witnessing. In New Agriculture, decisions and information do not need to be centralized in the hands of a few powerful companies. Rather, a diverse base of producers and consumers is beginning to coordinate the production, marketing, purchase, and consumption of wholesome food with alternative markets, new tools, and inclusive approaches. It looks like Windowfarms providing farming kits to citizen growers. It looks like Plovgh giving farms a way to earn more for their crops by reaching their customers en masse. It looks like hundreds of thousands of farms in this country reclaiming their economic fate by putting their land into food crops instead of commodities and selling that food directly to the people who eat it.
Growing Power is part of the reason New Agriculture finally feels accessible, but their decision to take support from a corporate giant places them squarely within the corporate framework. Negative reactions to the organization’s decisions express the disappointment that a leader on the alternative path just nestled itself into the hierarchy it aims to change. Its values and mission just became a line item within Walmart’s annual report (or, worse, its Corporate Social Responsibility report) instead of a call for an entirely different way. It reminds us that we’re stuck.
To have the lasting impact that the world needs, New Agriculture needs to stand on its own. To do so it has to be profitable. New Agriculture does not need a re-funneling of corporate money, money that because of the dominant structure it perpetuates won’t give us the market changes that will keep farmers on the land, improve the quality of our soil, and yield healthful food crops and relationships across our agri-culture.
We need new business models that are built for New Agriculture, that reward the producer and the consumer, that value decisions that are optimal economically as well as environmentally and ethically, that give influence back to the people who grow the food and the people who eat it. Only when the companies that are clearing a truly alternative agricultural path are prepared to upend and eventually replace the old paradigm of the agricultural sector with connectivity, community, and environmental stewardship will we have a chance of sustaining the revitalization of our farms and food.
This piece also appears on Plovgh.
Friday, July 8, 2011
Agility in Agriculture: Why Farms Will Succeed and Food Corporations May Not
Extreme weather has thrown off fruit and vegetable production schedules by a couple of weeks around the country this year. Anyone who’s a CSA member or an avid farmers’ market-goer knows it – farmshares are starting delivery a couple of weeks late in some regions and markets are still displaying spring greens in others. In the Pacific Northwest, there is much talk of compromised fruit crops. Cherries, which usually hit the stands well before the 4th of July, will make their way to Portland markets one of these days, but for now the strawberries will do just fine. Most people seem okay with that.
American consumers are increasingly choosing to be part of a dynamic agricultural experience. The value of agricultural products marketed directly from the farm to individuals through CSAs and farmers’ markets grew 104.7% from 1997-2007, representing over $1.2 billion in revenue in 2007 alone. Alternative channels have taken hold in part because consumers have demonstrated great capacity to adjust their expectations to the realities of agricultural production. Late cherries are not a nuisance, the thinking goes, but part of a story that connects people with the larger system that feeds them. Direct communication between farmers and people has also given producers insight into what their customers want, allowing diversified farms to adjust their crop plans to people’s tastes.
Meanwhile, the food industry is on a hunt for a “sustainable” production and marketing model. A recent Fast Company piece describes how companies like Unilever and PepsiCo know that they need to prepare their supply chains for a volatile climate and assuage their customers through social responsibility. However, food companies need more than a revision in their procurement strategies and waste policies; they need to completely rethink their design, development, and manufacturing processes. If they are to source from farms, they ought to meet dynamic production systems with an equally dynamic processing and marketing strategy instead of the unwavering product needs they present the market with today.
A farmer and a corporate procurement manager probably agree that it will be harder and harder to force a static basket of consistent, timely products out of the land for years to come. But the two have wildly different capacity to deal with this reality. While the farmer can reasonably adjust her production methods and planting choices to the ecological and market conditions her farm faces, the procurement team will have an awfully hard time figuring out how to redesign a nutrition bar in light of a cold spell in the Pacific Northwest in order to use extra strawberries as an ingredient in lieu of those missing cherries.
The future of farming does not lie in producing the same thing over and over again – the soil can’t take it and neither can farmers’ bank accounts. The future lies in an agile production system and in building producers' capacity to respond to changing markets, environmental conditions, and tastes. Farmers are good at managing for diversity and unpredictability. Individuals are getting better at it. Companies with keystone products, hefty manufacturing infrastructure, and entrenched organizational wisdom will have a hard time adjusting, I predict.
Agility means a push of what the land gives up into the markets and eventually the hands of people who eat, not a pull of ingredients through a supply chain, and it may require thinking beyond traditional measures of productivity and efficiency. As Fred Kirschenmann has remarked, economies of scale and specialization are not appropriate gauges for agriculture. Yet those are measures that food companies have typically been keenly focused on. There is a profound disconnect in food supply chains if scale is not the solution at the farm level but is the only measure of success at the corporate level.
One way forward is for farmers and people to get together and sort it out themselves (that’s where Plovgh comes in). Another is for companies to begin investing immediately not just in new procurement strategies but in a responsive product development and marketing mentality. Companies will have to do more than get closer to the farms that supply them; they need to rethink how they design and manufacture products that involve agricultural risk.
I see great potential in farmers, who demonstrate agility out of necessity, driving the future of agriculture (what a funny thing to have to say). I also see great potential in the ability of human beings, who are integrating agriculture – the culture of the land, as a reality in their daily lives, to adapt to changing conditions. I have much less faith that global, publicly held, quarterly measured corporations will figure out how to upend entrenched organizational processes, branded products, and global manufacturing in order to lead our agricultural future.
This piece is also posted at www.plovgh.com.
American consumers are increasingly choosing to be part of a dynamic agricultural experience. The value of agricultural products marketed directly from the farm to individuals through CSAs and farmers’ markets grew 104.7% from 1997-2007, representing over $1.2 billion in revenue in 2007 alone. Alternative channels have taken hold in part because consumers have demonstrated great capacity to adjust their expectations to the realities of agricultural production. Late cherries are not a nuisance, the thinking goes, but part of a story that connects people with the larger system that feeds them. Direct communication between farmers and people has also given producers insight into what their customers want, allowing diversified farms to adjust their crop plans to people’s tastes.
Meanwhile, the food industry is on a hunt for a “sustainable” production and marketing model. A recent Fast Company piece describes how companies like Unilever and PepsiCo know that they need to prepare their supply chains for a volatile climate and assuage their customers through social responsibility. However, food companies need more than a revision in their procurement strategies and waste policies; they need to completely rethink their design, development, and manufacturing processes. If they are to source from farms, they ought to meet dynamic production systems with an equally dynamic processing and marketing strategy instead of the unwavering product needs they present the market with today.
A farmer and a corporate procurement manager probably agree that it will be harder and harder to force a static basket of consistent, timely products out of the land for years to come. But the two have wildly different capacity to deal with this reality. While the farmer can reasonably adjust her production methods and planting choices to the ecological and market conditions her farm faces, the procurement team will have an awfully hard time figuring out how to redesign a nutrition bar in light of a cold spell in the Pacific Northwest in order to use extra strawberries as an ingredient in lieu of those missing cherries.
The future of farming does not lie in producing the same thing over and over again – the soil can’t take it and neither can farmers’ bank accounts. The future lies in an agile production system and in building producers' capacity to respond to changing markets, environmental conditions, and tastes. Farmers are good at managing for diversity and unpredictability. Individuals are getting better at it. Companies with keystone products, hefty manufacturing infrastructure, and entrenched organizational wisdom will have a hard time adjusting, I predict.
Agility means a push of what the land gives up into the markets and eventually the hands of people who eat, not a pull of ingredients through a supply chain, and it may require thinking beyond traditional measures of productivity and efficiency. As Fred Kirschenmann has remarked, economies of scale and specialization are not appropriate gauges for agriculture. Yet those are measures that food companies have typically been keenly focused on. There is a profound disconnect in food supply chains if scale is not the solution at the farm level but is the only measure of success at the corporate level.
One way forward is for farmers and people to get together and sort it out themselves (that’s where Plovgh comes in). Another is for companies to begin investing immediately not just in new procurement strategies but in a responsive product development and marketing mentality. Companies will have to do more than get closer to the farms that supply them; they need to rethink how they design and manufacture products that involve agricultural risk.
I see great potential in farmers, who demonstrate agility out of necessity, driving the future of agriculture (what a funny thing to have to say). I also see great potential in the ability of human beings, who are integrating agriculture – the culture of the land, as a reality in their daily lives, to adapt to changing conditions. I have much less faith that global, publicly held, quarterly measured corporations will figure out how to upend entrenched organizational processes, branded products, and global manufacturing in order to lead our agricultural future.
This piece is also posted at www.plovgh.com.
Monday, January 24, 2011
How Plovgh Makes FarmVille Real
It’s refreshing to hear Dave Thier talk about the struggles he had as a farmer on FarmVille. I hesitate to say it, but I think his experience – the attraction, the addiction, the desertion, actually bodes well for farms and farmers. Apparently more than 80 million people want to get involved with the farm (albeit only at arm’s length), but, man, it’s a hard life even on FarmVille. Most of us aren’t cut out for the real thing, which makes it all the more important for us to give due respect and dollars to those who are.
When I first heard about FarmVille, I found a teeny-tiny bit of hope in millions of people pretending to farm. Maybe it would mean a resurgent interest in the realities, challenges, and glories of farming. For long I’ve thought that farming was just about the swellest thing you could do. Were others, perhaps, beginning to agree?
To some extent, they were. Just as those millions on FarmVille were playing the virtual farmer, millions of people were entering into a real-life version of that game. They called it Community Supported Agriculture and spent $1.2 billion buying their food directly from farmers in 2007 (up 50% from just five years earlier). I’m relieved to say that, even in 2010, virtual gamers didn’t spend that much on all social gaming platforms combined.
But I think there are some significant lessons to be learned from FarmVille’s popularity. The way people have responded to the game suggests they want to be part of something bigger, an on-going process that yields something colorful, flavorful, valuable. CSA subscriptions and farmers’ market purchases deliver a real-world version of that experience but in a wholly lo-fi way, and as a result, miss out on the addictive potential that the gaming industry has tapped into. What’s more, the real-world farm game doesn’t forego the burnout and desertion that Thier describes of his FarmVille experience: CSA farms have an average member retention rate of just 65% nationally.
FarmVille’s user numbers and the increase in the popularity of CSAs and farmers’ markets lead me to believe that people want to be involved in food and farms, but only up to a point and only if it gives them a subtle power trip. The thought of turning everyone loose on their own six acres and betting on who can subsist is terrifying; that would be way too much adrenaline. However, I do think there’s a way to get the eating person involved in making decisions about what is produced for them, but for real, not for fake. And not in the way that makes you the annoying food evangelist who’s always praising the virtues of bok choy.
Plovgh puts farms and people together at a virtual farmstand. We hope that they buy and sell together, plant some crops together, follow the ups and downs of their harvest together. Plovgh is about the thrill of being part of the farm but without the kookiness of FarmVille because, um, Plovgh lets you spend real money on real crops and real farms. Don’t worry, you don’t have to leave your console or forsake your iPhone. We’re in there.
When I first heard about FarmVille, I found a teeny-tiny bit of hope in millions of people pretending to farm. Maybe it would mean a resurgent interest in the realities, challenges, and glories of farming. For long I’ve thought that farming was just about the swellest thing you could do. Were others, perhaps, beginning to agree?
To some extent, they were. Just as those millions on FarmVille were playing the virtual farmer, millions of people were entering into a real-life version of that game. They called it Community Supported Agriculture and spent $1.2 billion buying their food directly from farmers in 2007 (up 50% from just five years earlier). I’m relieved to say that, even in 2010, virtual gamers didn’t spend that much on all social gaming platforms combined.
But I think there are some significant lessons to be learned from FarmVille’s popularity. The way people have responded to the game suggests they want to be part of something bigger, an on-going process that yields something colorful, flavorful, valuable. CSA subscriptions and farmers’ market purchases deliver a real-world version of that experience but in a wholly lo-fi way, and as a result, miss out on the addictive potential that the gaming industry has tapped into. What’s more, the real-world farm game doesn’t forego the burnout and desertion that Thier describes of his FarmVille experience: CSA farms have an average member retention rate of just 65% nationally.
FarmVille’s user numbers and the increase in the popularity of CSAs and farmers’ markets lead me to believe that people want to be involved in food and farms, but only up to a point and only if it gives them a subtle power trip. The thought of turning everyone loose on their own six acres and betting on who can subsist is terrifying; that would be way too much adrenaline. However, I do think there’s a way to get the eating person involved in making decisions about what is produced for them, but for real, not for fake. And not in the way that makes you the annoying food evangelist who’s always praising the virtues of bok choy.
Plovgh puts farms and people together at a virtual farmstand. We hope that they buy and sell together, plant some crops together, follow the ups and downs of their harvest together. Plovgh is about the thrill of being part of the farm but without the kookiness of FarmVille because, um, Plovgh lets you spend real money on real crops and real farms. Don’t worry, you don’t have to leave your console or forsake your iPhone. We’re in there.
Thursday, January 20, 2011
Wal-Mart's New Policy Could Starve Us of Fresh Food
You probably caught the headlines a few months back about Wal-Mart entering the market for local food (defining it as food produced and sold within the same state, an arbitrary definition at best). Today’s New York Times features an article about the store’s plan to make food healthier. One of the plans is to drop the price for fresh fruits and vegetables.
Using fresh food as a loss leader is ludicrous as a solution to getting more fruits and vegetables into the mouths of Americans. In fact, it misses the mark entirely and potentially has harmful repercussions on the quality and amount of fresh food available to us. It might be a little counter-intuitive, but lets’ think this through.
The relationships and incentives involved in the production, sale, and consumption of fresh food look something like this.
As the perceived value of fruits and vegetables increases, your willingness to pay for them increases. If you’re willing to pay more, the price the farmer gets increases. As the price to the farmer goes up, his incentive to grow that food for you also goes up. When he grows more, supply of fresh food in the market increases and, all else being equal, lowers the market price of that food. Basic needs, flavors, and headlines all influence demand for fresh food, and as you see more value, you probably eat more fresh food and push the market price upward (again, all else being equal).
Wal-Mart is trying to artificially diminish the perceived value of fruits and vegetables. By lowering consumers’ expectations about what they should have to pay to eat fresh food, Wal-Mart fools the market and gives farmers no reason to continue growing fruit and vegetable crops. By dropping prices on fruits and vegetables, Wal-Mart isn’t making more fruits and vegetables accessible to people who think they can’t afford to eat well; it’s making it less appealing for farmers to grow specialty crops. If Wal-Mart’s approach takes hold, we will see fewer farmers choosing to grow non-commodity crops, and instead of more people being able to eat fresh foods, fewer of us will (even those of us who can afford to pay full price for it). Wal-Mart has chosen the wrong point to press on to serve demand for fresh food and get people to eat better.
Leslie Dach, of Wal-Mart’s corporate affairs group, is quoted as saying, “This is not about asking the farmers to accept less for their crops.” But how can it not be? It is not in the farmers’ interest to have their crops devalued, even if the wholesale price they’re getting from Wal-Mart is a fair one. Farmers who sell to Wal-Mart are forced to “accept less” because Wal-Mart is sending a message to the world that no one should have to pay much to eat their food. You’ll notice there are no quotations in the article from farmers who supply Wal-Mart.
I contend that there’s a better way for farmers and for eaters, and that way does not include a behemoth controlling the interaction between the two. In a post I wrote a few months ago, I mentioned that when you buy fresh food, you’re now paying intermediaries far more than you pay the farmer. Do you really value the trucking and storing and advertising and grocery store cashier more than you do the soil, the water, the sweat that went into producing your food? You don’t buy food because you think the wholesaler that got the food to you did a really great job; you buy it because you think it’s going to meet your taste, nutritional, maybe even emotional needs. The farmer imbues your food with those qualities, not the grocer or anyone else. So, why not start paying the farmer an amount that reflects the value they provide you?
Plovgh is developing a way for you to do that. We get that it’s not always easy to pay the farmer because to do so, you have to find her. We want to pull down the barrier between people and farmers so that you have more control over who feeds you. It doesn’t solve everything to put the farmer and the eating people into direct relationships, but it certainly upholds balance and eliminates the forces that keep the makers of fresh food separate from the people who need it.
This article is also posted at Plovgh.
Using fresh food as a loss leader is ludicrous as a solution to getting more fruits and vegetables into the mouths of Americans. In fact, it misses the mark entirely and potentially has harmful repercussions on the quality and amount of fresh food available to us. It might be a little counter-intuitive, but lets’ think this through.
The relationships and incentives involved in the production, sale, and consumption of fresh food look something like this.
As the perceived value of fruits and vegetables increases, your willingness to pay for them increases. If you’re willing to pay more, the price the farmer gets increases. As the price to the farmer goes up, his incentive to grow that food for you also goes up. When he grows more, supply of fresh food in the market increases and, all else being equal, lowers the market price of that food. Basic needs, flavors, and headlines all influence demand for fresh food, and as you see more value, you probably eat more fresh food and push the market price upward (again, all else being equal).
Wal-Mart is trying to artificially diminish the perceived value of fruits and vegetables. By lowering consumers’ expectations about what they should have to pay to eat fresh food, Wal-Mart fools the market and gives farmers no reason to continue growing fruit and vegetable crops. By dropping prices on fruits and vegetables, Wal-Mart isn’t making more fruits and vegetables accessible to people who think they can’t afford to eat well; it’s making it less appealing for farmers to grow specialty crops. If Wal-Mart’s approach takes hold, we will see fewer farmers choosing to grow non-commodity crops, and instead of more people being able to eat fresh foods, fewer of us will (even those of us who can afford to pay full price for it). Wal-Mart has chosen the wrong point to press on to serve demand for fresh food and get people to eat better.
Leslie Dach, of Wal-Mart’s corporate affairs group, is quoted as saying, “This is not about asking the farmers to accept less for their crops.” But how can it not be? It is not in the farmers’ interest to have their crops devalued, even if the wholesale price they’re getting from Wal-Mart is a fair one. Farmers who sell to Wal-Mart are forced to “accept less” because Wal-Mart is sending a message to the world that no one should have to pay much to eat their food. You’ll notice there are no quotations in the article from farmers who supply Wal-Mart.
I contend that there’s a better way for farmers and for eaters, and that way does not include a behemoth controlling the interaction between the two. In a post I wrote a few months ago, I mentioned that when you buy fresh food, you’re now paying intermediaries far more than you pay the farmer. Do you really value the trucking and storing and advertising and grocery store cashier more than you do the soil, the water, the sweat that went into producing your food? You don’t buy food because you think the wholesaler that got the food to you did a really great job; you buy it because you think it’s going to meet your taste, nutritional, maybe even emotional needs. The farmer imbues your food with those qualities, not the grocer or anyone else. So, why not start paying the farmer an amount that reflects the value they provide you?
Plovgh is developing a way for you to do that. We get that it’s not always easy to pay the farmer because to do so, you have to find her. We want to pull down the barrier between people and farmers so that you have more control over who feeds you. It doesn’t solve everything to put the farmer and the eating people into direct relationships, but it certainly upholds balance and eliminates the forces that keep the makers of fresh food separate from the people who need it.
This article is also posted at Plovgh.
Thursday, November 18, 2010
Eating In Trumps Eating Out
In an article last week, I discussed data that shows that a farmer receives a dwindling portion of the consumer food dollar in the US. The data does not explain the ratio of whole foods to processed or prepared foods purchased, but one person who commented on that post attempted to reason, “The farmers' share has fallen because consumers are choosing to eat out more and buying food in more highly processed forms. If we all want to return to buying raw food at markets and spending hours preparing it then the farmers' share can go up.” This is an understandable, if uninformed, take on why farmers aren’t winning in the current food economy, but it misses what’s really going on: Americans spend significantly more money on food they eat at home than they do on food they eat out.
Since 1929, when theUSDA dataset begins, disposable income spent on food-away-from-home has increased more than five times faster than has disposable income spent on food-at-home. There is no question that the market for restaurants, prepared food, and food service blew up in the second half of the twentieth century. But the food-at-home market is still 42% bigger than the market for food that is consumed away from home, and it has been that way since the early 2000s. Furthermore, the ratio of dollars spent on food-at-home to dollars spent on food-away-from-home has been especially stable in recent years. Cathy Erway and her ilk, who are trying to shift even more consumption back into the home, might take comfort in that statistic, even if they have a lot of territory to cover to get us back to our early-1900s habits. Even in this era of idolizing chefs, restaurants, and food experiences, we still spend more money on food that we eat at home than we do on food outside of the home.
That means that the data to which I referred last week is not just a reflection of people paying someone else to prepare their food. I posit that what is really going on is that stale supply chains make it nearly impossible for farmers to reach consumers, and that because of the lack of choice in market channels, consolidators, wholesalers, and distributors can earn a huge amount of money, even though most on-lookers would say they don’t add a whole lot of value. Those intermediaries skew the portion of the consumer dollar that goes to the farmer for producing the food, tending the land that gave up that food, and managing the risk and decisions involved with sustaining a crop.
In response to intermediaries eating into food dollars, farmers have attempted to reach consumers directly through farmers’ markets and CSAs, and consumers show a growing interest in forging that connection with the farm and their food. That the number of farmers’ markets in the US has increased 114% in the last decade, to6,132 markets around the country, suggests that consumers have an interest in getting their whole dollar to the farmer, rather than paying a store to keep its lights on.
Consumers, take comfort. You have a direct hand in farmers getting more of the credit for the food you eat. But you have to start with knowing whom you empower to feed you.
This piece also appears at www.zocalofood.com/blog.
Since 1929, when the
That means that the data to which I referred last week is not just a reflection of people paying someone else to prepare their food. I posit that what is really going on is that stale supply chains make it nearly impossible for farmers to reach consumers, and that because of the lack of choice in market channels, consolidators, wholesalers, and distributors can earn a huge amount of money, even though most on-lookers would say they don’t add a whole lot of value. Those intermediaries skew the portion of the consumer dollar that goes to the farmer for producing the food, tending the land that gave up that food, and managing the risk and decisions involved with sustaining a crop.
In response to intermediaries eating into food dollars, farmers have attempted to reach consumers directly through farmers’ markets and CSAs, and consumers show a growing interest in forging that connection with the farm and their food. That the number of farmers’ markets in the US has increased 114% in the last decade, to
Consumers, take comfort. You have a direct hand in farmers getting more of the credit for the food you eat. But you have to start with knowing whom you empower to feed you.
This piece also appears at www.zocalofood.com/blog.
Wednesday, November 10, 2010
The Balance of Food Profits: Whom Do You Really Pay For Your Food?
The USDA tracks the value of domestic food expenditures, and also reports what portion of the consumer dollar goes toward labor, packaging, intercity transportation, fuel, pre-tax corporate profits, and farmers. The difference between what the consumer pays and what the farmer gets is called the marketing bill (look at the pink line in the graph). The marketing bill, which “covers processing, wholesaling, transportation, retailing costs, and profits”, or any function beyond the farm but before the household, has been climbing upward since the start of the dataset, in 1967, which means the farmers’ share has been on the decline.
The components of the marketing bill show that, from 1970 to 2006, labor, packaging, fuel, corporate profit, and miscellaneous items (like advertising and promotion, local for-hire transportation, and rent) increased relative to consumer spending, while fuel costs fell slightly relative to spending. The portion of a consumer dollar that a farmer receives fell the most dramatically in relation to consumer spending on food: in 1970, a farmer captured 32.10% of the consumer dollar; in 2006, she got just 18.53%.
These trends suggest that over the last 40 years, it has become more expensive to get food to market. It is worthwhile to note that the farmers’ share of the dollar begins to decrease significantly in the 1980s, right around the time that alternative market channels like farmers’ markets and Community Supported Agriculture (CSA) started gaining popularity. Is it any surprise that farmers would seek the closer connection to consumers that these other economic models afford in a world in which almost all of the functions involved in connecting consumers with their food got a raise while farmers who actually produced the food got, in essence, wage cuts?
Some would say that the functions involved in the food supply chain beyond food production add significant value – the aggregation of supply, the processing, the wholesaling, the marketing, the advertising, the research and development, the store shelves and employees. But perhaps we’re moving beyond the need for those functions as a costly component of our food. The internet levels, liberates, and democratizes industries and supply chains. We should unleash it for the benefit of our farmers and our eaters, instead of continuing to pay for “value” that I, frankly, have a hard time valuing.
This post also appears at www.zocalofood.com/blog.
The components of the marketing bill show that, from 1970 to 2006, labor, packaging, fuel, corporate profit, and miscellaneous items (like advertising and promotion, local for-hire transportation, and rent) increased relative to consumer spending, while fuel costs fell slightly relative to spending. The portion of a consumer dollar that a farmer receives fell the most dramatically in relation to consumer spending on food: in 1970, a farmer captured 32.10% of the consumer dollar; in 2006, she got just 18.53%.
These trends suggest that over the last 40 years, it has become more expensive to get food to market. It is worthwhile to note that the farmers’ share of the dollar begins to decrease significantly in the 1980s, right around the time that alternative market channels like farmers’ markets and Community Supported Agriculture (CSA) started gaining popularity. Is it any surprise that farmers would seek the closer connection to consumers that these other economic models afford in a world in which almost all of the functions involved in connecting consumers with their food got a raise while farmers who actually produced the food got, in essence, wage cuts?
Some would say that the functions involved in the food supply chain beyond food production add significant value – the aggregation of supply, the processing, the wholesaling, the marketing, the advertising, the research and development, the store shelves and employees. But perhaps we’re moving beyond the need for those functions as a costly component of our food. The internet levels, liberates, and democratizes industries and supply chains. We should unleash it for the benefit of our farmers and our eaters, instead of continuing to pay for “value” that I, frankly, have a hard time valuing.
This post also appears at www.zocalofood.com/blog.
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