Market Niche Recaptures Profits
Specialty crops and livestock from family farms practicing environmental stewardship show special promise, report says.
6/18/97: Opportunities are growing for family farmers to improve their incomes by producing and marketing specialty crops and livestock to meet consumer demand, according to research by the Center for Rural Affairs, in Walthill, Nebraska. But new marketing and processing institutions must be developed to realize these opportunities.
A nationwide survey found that 63 percent of consumers would be willing to pay a slightly higher price for products that were produced with environmental responsibility if the benefits are clearly demonstrated. "Traditional marketing and processing structures serve neither consumers, farmers, nor society, but cater to the large agribusinesses engaged in food processing and marketing," commented Kelly O'Neill, the report's author and Marketing Alliances Project Leader at the Center for Rural Affairs.
The farm share of value added to agricultural products and the profit associated with it have fallen steadily from 21 cents of the consumer dollar in 1910, to only 5 cents in 1990. Shares have increased for the input sector for fertilizers and other products, and for the post-harvest sector for processing, distribution, marketing and other services.
Strategies for farmers to recapture some profit opportunities by producing and marketing higher-value products are described in the Center's report, Emerging Markets for Family Farms: Opportunities to Prosper Through Social and Environmental Responsibility. Marketing opportunities are particularly promising for crops and livestock produced by owner-operated farms practicing environmental stewardship.
The price premiums now available to farmers are based primarily on the volume of a particular commodity sold at one time, and are unavailable to diversified farmers of modest scale, who typically have smaller quantities of several products. These marketing institutions also concentrate wealth in the hands of a few corporate agribusinesses' stockholders. They limit opportunities to entrepreneurs in rural communities who could process and market agricultural products while providing employment and retaining investments in their rural communities.
"A large number of consumers want meat products raised in ways that they perceive will enhance their personal health, rural communities, and the natural environment," added O'Neill. "Many farmers are producing products meeting these criteria. New marketing structures to link the two groups have great potential to provide consumers with products they desire, and the opportunity to use their purchasing power to vote for environmental and social responsibility. The marketplace has great potential to provide prices for these products that would provide opportunities to prosper to both family farms and rural communities."
Emerging Markets for Family Farms is available for $7 from the Center for Rural Affairs, PO Box 406, Walthill, NE 68067; (402) 846-5428.
Source: From a news release by the Center for Rural Affairs.
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