Saturday, February 11, 2012

Big Government and Big Corporations Befriend the Local Food Movement

Local food conference is hosted by the Federal Reserve Bank of Chicago

Federal Reserve Bank of Chicago
CHICAGO.  The local food movement is one of the great trends to hit the country over the past decade as more people head for farmers markets, join community-supported agriculture groups (CSA) and cooperatives, shop at farm stands and U-picks, sponsor farm-to-school programs and demand local food in their neighborhood grocery stores, school and restaurants. 

What isn’t widely known is that the federal government, some big corporations and a variety of non-profit and small business organizations are stepping up to encourage the growth and viability of a local food system in order to give people of all income levels access to local food that is healthier, safer and fresher.

Representatives from these sectors shared “successful models, resources, strategies and opportunities for supporting, cultivating and growing local/regional food systems in the Midwest” with about 150 people at the Local/Regional Food System Conference hosted by the Federal Reserve Bank of Chicago recently. 

“The money we spend on food is a powerful investment tool,” said Deputy Secretary of Agriculture Kathleen Merrigan in her keynote address. 

The USDA, considered by many local food advocates to be a promoter of large, corporate agriculture, is devoting more monies for small local/regional farmers, especially since the Obama administration took office in 2009. 

For example, Merrigan spearheaded Know Your Farmer, Know Your Food in May 2009, which highlights the critical connection between farmers and consumers and supports local and regional food systems that increase economic opportunity in rural America. 

Recently, Merrigan announced the largest allotment of grants for the Value Added Producer Grant Program  (VAPG) with 298 recipients across 44 states and Puerto Rico and totaling $44 million.

The VAPG, begun in 2000, has seen increased funding with each successive farm bill. 

“This funding will promote small business expansion and entrepreneurship opportunities by providing local businesses with access capital, technical assistance and new markets for products and services,” said Merrigan.

There is a “new renaissance of interest” in knowing where food comes from, said Merrigan who added that one of the most influential people promoting local/regional food has been First Lady Michelle Obama, her White House garden and her dedication to eliminate childhood obesity. 

Although direct-to-consumer sales account for about one percent of total agricultural sales, farmers markets have flourished and seen a steady increase since 1994.  In 2011, the USDA counted 7,173 farmers markets, a 17 percent jump from 2010. The Farmers Market Coalition says that as recently as 2005, farmers market direct to consumer sales were already exceeding $1 billion nationwide.

More chefs use local food to distinguish their restaurant from others.  Consequently, they want fresh, high-quality ingredients that are ripe and ready to eat rather than grown and packaged for a 1500-mile journey, as most food products are today.  

According the USDA's own research, local food sales made through direct marketing sales like farmers markets, CSAs, and farm stands plus via supermarkets, restaurants and institutional buyers were close to $5 billion. Fruit, vegetable and nut growers selling into local and regional markets employ 13 fulltime workers per $1 million in revenue earned.

Handling this growing demand for local food presents many opportunities for economic development and job growth because it requires the rebuilding a local food system that involves all the steps from “farm to fork” including production, processing, packaging, marketing, sales and distribution. 

Since World War II, large corporations began to gain almost total control over our nation's food system.  This was intensified when cheap food policies instituted in the 1970s gave rise to monoculture specialization, high tech and expensive machinery, complex transportation and communications networks all with the promise of low prices, year-round accessibility of products and convenience.  These policies also led to the demise of many family farms that were told to “get big or get out.”

Then, something changed over the past decade as more and more people became concerned about where and how their food was grown and whether it was safe, healthy and tasty.  They also wanted to reinvest their dollars in the local economy, be more sustainable and protect the environment.

Corporate Sector
Besides the federal government's efforts to support a local food system, several corporations are also helping to make this transition.

1.  Sysco, a marketing and distribution company, started a local sourcing program with family farms in 2004 because it wanted to make their high quality products accessible to more people, said Craig Watson, vice president of sustainable agriculture. 

So far, one third of Sysco’s distribution is devoted to local food programs in Michigan, Oregon, California and Connecticut.  

Sysco, also interested in environmental protection, uses hybrid diesel delivery trucks and biodegradable takeout containers, and it advocates low-impact farming methods. 

To help make food accessible to people of lower incomes, it makes charitable contributions to fight hunger in the United States primarily through Share Our Strength, the leading national not-for-profit organization devoted to eliminating childhood hunger.

2.  Likewise, Supervalu, a specialist in produce/grocery retail and supply chain services, has distribution centers in 48 states that can assist local growers in getting their products to market.  In fact, the goal of SuperValu is to raise the awareness of what is locally grown and to increase the commitment of customers to purchase more produce overall, said Tim Eberle, director of sales. 

3.  Whole Foods currently has 300 retail stores throughout North America and the UK—with 20 more opening next year.  Its purchasing operations have three tiers:  global, regional and local.  It is known for its high quality products and the world’s largest natural and organic grocer.  Only recently has it trumpeted local foods. 

Whole Foods Midwest distribution hub in Muncie, IN, works with local farmers and seeks to add more.  Its Local Producer LoanProgram provides up to $10 million in low-interest loans to small, local producers to make it easier for them to grow their businesses and bring more local products to market.  Loans range from $1,000 to $100,000 and can be used for purchasing more animals, investing in new equipment or converting to organic production.  Whole Foods also minimizes the fees, interest rates and paperwork that can often get in the way of a small local farm or business taking the next step to expand its operations.

4.  General Electric (GE) is committed to building self-reliant communities throughout the world through technology, which can have some impact on rebuilding the local food system, too.

“Arable land, energy and water are all critical factors in the production of food,” said Dan Walter, global general manager of GE’s Food and Beverage Solutions.  In the United States energy and water have been taken for granted, but food, energy and water are all tied together.”

GE's ultimate goal is to make food production profitable, sustainable and economically viable, he said, but there are certain global challenges that make this difficult.

Currently, 925 million people suffer from hunger and the UN projects the world’s population will reach 9.3 billion by 2050. 

A growing middle class worldwide will expect clean water, a higher protein diet and better power, so the demand for food will jump by 70 to 100 percent by 2050, according to the UN’s Food and Agriculture Organization (FAO).  Production in developing countries will need to double.

Various global financial and environmental (droughts, earthquakes, hurricanes, floods, oil spills) shocks are impacting agriculture as well as households and livelihoods.

As energy costs increase and water, oil, natural gas and other resources decrease, alternatives are needed for agriculture.

GE is looking for alternative water sources through the conversion of saline and brackish water and water reduction strategies like drip irrigation and no-till farming.  It is exploring energy alternatives like solar, wind and biogas engines as well as vertical farms in cities, GPS-driven machinery and the reduction of food spoilage, which amounts to 20 to 25 percent of all produced. 

“I'd like to think that technology will win out to meet the challenges we face,” said Walter, “but market forces will change before technology catches up to the changes.”

Non-Profit and Small Business Sectors
Many non-profit organizations, planning commissions and worker-owned cooperatives are also involved in the transition to a local food system.

1.  Feeding America, the nation's leading domestic hunger-relief charity, maintains a local and national network that secures and distributes food from corporate manufacturers, retailers, farmers and government sources to the 37 million Americans who lack access to food, including 14 million children and 3 million seniors.    

Feeding America has over 200 food banks and 61,000 agencies and it annually ships 70 percent or 330 million pounds of local produce to needy people, said James Borys, director of the Fresh Produce Program in Chicago.

Its NationalProduce Program increases the network's capacity to handle fresh foods. 

Mobile pantries allow food banks to engage a much larger circle of groups in supplying food to the needy, which increases the number of people served and extends service into regions that the food banks haven’t reached. 

Its SNAP Outreach Program provides access to food for more than 1 million people each year and aims to increase participation among eligible individuals to 70 percent in 2012. 

2.  Southwest Wisconsin, which is comprised of only five rural counties, is working on a regional plan to figure out how local foods can impact a tri-state area (Wisconsin, Illinois and Iowa) where 35 million people live and spend $150 billion on food.  This could result in tremendous job creation and an economic boom to the area.

“Agriculture is key, said Amy Seeboth, planning manager of the Southwestern Wisconsin RegionalPlanning Commission, “and the goal is to look at the big picture and take local control at a scale that people are willing to buy.”

The commission is developing a database on what area farmers can grow, who is processing and buying food, what people are paying for food, what kinds of food are needed and in what forms and what distribution networks are available.

3.  Organic Valley is known for its dairy products but the biggest farmers cooperative in the country with more than 1,687 farmer-owners in 33 states and four Canadian provinces started out in 1988 with produce. 

Most produce comes from California because big producers ship in the volume that large grocery stores need. Those stores are not able to buy from individual, small, family farms, however, so Organic Valley has its farmers “pool” their crops and achieve the volume those stores require in markets they could not access. 

Other benefits to this cooperative arrangement include helping farmers, especially young farmers, who don’t have the money to invest in the infrastructure it takes to market and deliver crops or the time to self-market or the desire to self-promote (like its many Amish producers).

4.  Parrfection Produce is a four-year-old operation started by a 21-year-old University of Wisconsin-Platteville agriculture business major, David Parr.  His business got a kick-start when he was selected as the winner of the Pioneer Academic Center for CommunityEngagement's business plan competition for his business, Parrfection Produce.  He received $1,000.

He works with 90 produce growers who each farm five acres on average by providing order buying and management services; warehousing; and distribution to small family restaurants, small chain restaurants and grocery stores.  Recently, he partnered with the Monroe school district to try to increase the amount of local produce being used in the school lunch program. 

5.  Green CityGrowers Cooperative is one of three operating enterprises of Evergreen Cooperatives that was designed to create sustainable jobs in inner-city Cleveland where 40 percent of the population lives below the poverty level and 16 percent is unemployed. 

Workers in the Green City Growers 230,000-square-foot greenhouse grow year-round hydroponic produce in a building that also has a packing facility, offices and advanced energy facilities all on 3.25 acres.   

The EvergreenCooperatives are pioneering innovative models of job creation, wealth building and sustainability based on the Cleveland Model, which involves a partnership between the residents of six of the city’s neighborhoods and some of Cleveland’s most important “anchor institutions” including the Cleveland Foundation, the City of Cleveland, Case Western Reserve University, the Cleveland Clinic, University Hospitals.  Together, it was found, they had $3 billion worth of buying power with very little of it coming from local sources. 

6.  One of the big problems in rebuilding the local food system is connecting farmers with customers.  Local Roots began filling that gap in northeastern Ohio by forming the Wooster Local Foods Cooperative.  It currently has 700 members with 100 producers supplying produce, meat, dairy, eggs and bakery items—and receiving 90 percent of their sales.

After a year of planning, a steering committee of 12 opened a renovated an empty building in January 2010 for a six-day-a-week year-round market and cafe that features seasonal local dishes.  The building was financed by funds from members, local businesses, a Specialty Crop Block Grant from the Ohio Department of Agriculture and the sweat equity of volunteers. 

The building has a classroom, demo kitchen to teach people how to cook, and in December 2012 it will open a small, commercially licensed kitchen that allows producers to process and preserve products for sale at the market.  It will soon offer the Sprouts Program that helps entrepreneurs get started.

Collaboration and cooperation are the hallmarks of making this emerging local food system work, said Secretary Merrigan.  

And, the Midwest, once known as the Rust Belt of America, is leading the way!


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