1. PROVIDING FARMERS THE TOOLS TO MANAGE RISK IN VALUE-ADDED VENTURES National Women in Agriculture Educators Conference Memphis TNMarch 27-29, 2012 Winifred McGee, Senior Extension Educator, Penn State Extension Lynn Kime, Senior Extension Associate, Penn State Extension

2. The Pennsylvania State University is an affirmative action, equal opportunity university. This presentation includes material is based upon work supported by USDA/NIFA under Award Number 2010-49200-06201."

3. Agenda The Setting -- local foods marketplace consumer expectations farmers’ response Need for food business knowledge/skills The Food for Profit project workshop on-line fact sheets risk management for food businesses KASA gains and impacts of the project

4. Consumers and Local Foods Demand for fresher, more nutritious foods Desire to support local economies and local farmers Desire for better food security – Safe growing and processing practices – Enough food for all citizens Concern about environmental effects of food transportation Source: Measuring and Understanding Local Foods: The Case of Vermont, David S. Timmons, University of Vermont (May 2006)

5. Farmers’ Response to the Demand Farmers’ markets Community-supported agriculture (CSA) Local food policy councils and coalitions State buy-local programs Community gardening New emphasis on food security Source: The restructuring of food systems: trends, research, and policy issues M. Koc and K. Dahlberg. Agriculture and Human Values 16 (1999)

7. Farmers’ Response to the Demand Farmers’ markets Community-supported agriculture (CSA) Local food policy councils and coalitions State buy-local programs Community gardening New emphasis on food security Source: The restructuring of food systems: trends, research, and policy issues M. Koc and K. Dahlberg. Agriculture and Human Values 16 (1999)

8. Farmer’s Share of Food Dollar

9. Statistical Support for Growth 136,817 farms (in 2007) selling agricultural products directly for human consumption – An 17.2 % increase from 2002 statistics – $1.21 billion in direct sales nationwide Small farms (sales <$250,000) generated 56.7% of the total value of agricultural products sold directly to consumers 93.3% of farms selling directly were family farms (limited resource, P/T and lifestyle) Source: 2007 Census of Agriculture USDA NASS

10. Translation of a Trend Farmers see direct marketing of fresh and value-added products as – Source of additional income (diversifying) – Low cost, low risk(?) entry into agriculture Consumers see local foods as – Regaining a feeling of “safe food” – Opportunity to support the community – Reducing the “carbon footprint”  How to mesh the opportunities and threats?

11. USDA ERS Report – Local Foods “Growers often need education and training” – Meeting the market requirements – Respond to consumer-expectation issues: Risk management Postharvest practices Recordkeeping GAP certification Liability insurance requirements Source: Martinez, Steve, et al. Local Food Systems: Concepts, Impacts, and Issues, ERR 97. May 2010. U.S. Department of Agriculture, Economic Research Service.

12. Food for Profit Program Basic food business start-up instruction: Realities of business ownership Legal requirements Food safety Developing a business plan Niche marketing strategies Packaging and labeling Pricing your product

13. Incorporating Risk Management In 2011, added these topics to the workshop: Good Agricultural Practices (GAP)/Good Handling Practices (GHP) Hazard Analysis Critical Control Points (HACCP) Adequate/correct Insurance Coverage Allergen notification Pro-active recall planning

14. Growing the Program Massive updates/changes (since 1990s) Focus changed from “pin money” to “serious business” Increasing percentage of farmers seeking diversification of income Increasing percentage of food entrepreneurs seeking locally grown commodities

15. The Workshop “Annie’s Project” type class – Interactive environment – Discussion-based learning Learning facets include – Guest entrepreneur – PDA/Municipal sanitarian – In-class activities – Post-class application/individualization

16. The Fact Sheets Before You Start Registering Your Business Home Food Processing Working with PDA Insurance for Food Entrepreneurs Food Labels Business Planning Marketing Your Food Product Price and Pricing Price and Pricing Worksheet

17. The On-line Course Six Modules: – Getting Started – Safe Home-Based Food Production – Developing a Game Plan – Finding a Marketing Niche – Packaging Your Product – Pricing Your Product NE SARE Grant supported this project 24/7 access to much of workshop material

18. Client Response Since fall 2010, 463 participants; 235 of those since Sept 2011 Demand exceeding the “supply” 168 respondents, 2011/12 post-survey tool: – 91% (n = 152) rated “Information Met My Needs” as Very Good or Excellent – 95% (n = 159) rated “Quality of Materials” as Very Good or Excellent – 54% (n = 90) said program Met Expectations; 37% (n = 61) said program Exceeded Expectations

19. Knowledge Gain: Food Code/Business Liabilities

20. Knowledge Gain – Business Start-up Steps

21. Post-Session Attitude: Importance of Identifying/Studying Market Niche

22. Food Risk Aspects in Food for Profit

23. Managing Risk for Food Businesses: Post-program Knowledge Levels

24. Attitude Change: Need to Pre-Test Recall Plan

25. Practice Change: Strategies that Resonated

26. Future Opportunities 2012 NE SARE funding for PA, MD, WV – Train/apprentice additional educators – Develop additional fact sheets/resources Goals – 3 year project – 23 Additional educators (2012) – At least 135 farmers attend resulting workshops (2013) At least 20 new food ventures (2014) At least 20 adopt recommended risk strategy (2014)

27. Discussion/Questions