NC1198: Renewing an Agriculture of the Middle: Value Chain Design, Policy Approaches, Environmental and Social Impacts
(Multistate Research Project)
The NC1198 group and its predecessors evolved to address a troubling structural change in US agriculture: the decline of mid-scale farms capable of generating household income. We have referred to this phenomenon as the disappearing “Agriculture of the Middle (AOTM)” The decreasing numbers of mid-sized family farms as evidenced by the NASS Census of Agriculture data from 1997-2012 reflects a tren12)d that has been going on for decades (Stevenson et al. 2011). Across the US, only the very smallest farms (farms with < $10,000 in sales) and the very largest farms (farms with > $million in sales) have been increasing in number. Interestingly the 2012 Census suggests a slight improvement in these numbers. USDA classifies farms with sales from $350,000-$999,999 as “Mid-sized Family Farms”. The 2012 Census data show that farms in the ranges of $250,000 - $499,999 and $500,000-$999,999 both slightly increased in number from 2007-2012 (Ahearn and Harris, 2014). While these signs are encouraging, it is important to note that there are still only about 118,000 mid-sized family farms nationally and the greatest number of farms in the US farms are considered Small Family Farms, with the greatest numbers of these classified as retirement and off-farm occupation farms.
Income-generating small and mid-sized farms are vital to the overall well-being of US rural communities, the economy and the environment, as confirmed by numerous studies over the years (e.g., Kirschenmann, Stevenson, Buttel, Lyson, & Duffy, 2008). Research suggests that small and mid-scale farms spend a relatively higher amount of input dollars locally and have a higher multiplier effect than do larger farms (Jablonski & Schmit, 2015). The land in mid-sized family farms comprises about one-fifth of all agricultural land and compared to other potential uses (i.e., development, particularly paving) provides numerous ecosystems services.
Beyond a measure of farm size, the NC1198 team has expanded the concept of the Agriculture of the Middle (AOTM) as a “marketing middle” that designates a third tier of marketing that lies somewhere between direct marketing and commodity marketing. The concept and the role of values-based food supply chains (VFSCs) and other forms of strategic partnerships that differentiate foods and their distribution systems based on particular sets of product and business attributes have been of particular interest for their ability to improve market access for small and mid-sized family farms (Stevenson et al 2011; Lev et al 2015). Many of these farms are too large or otherwise unsuited to direct market all of their products, yet too small to successfully compete in commodity markets. Partnerships are a logical choice for these farms. Borrowing from the theory of the firm and transaction costs (Coase 1937), many of these farms have too large a volume to “make” their own marketing (selling through direct markets like some smaller farms do) yet too small a volume to survive in by “buying” marketing though anonymous commodity channels. Partnerships and the opportunity to aggregate products with other similar producers offer the potential to bring modest price premiums of differentiated products while selling larger volumes and access to mass markets. A recent AFRI project led by NC1198 members has identified and created a database of over 250 VFSCs in the US that distinguish themselves in the marketplace based on particular attributes related to food quality, environmental practices, distribution of economic benefits, or social relationships (Peterson et al 2016).
Over the course of the NC1198 project, the team members have produced numerous case studies, peer reviewed publications, lesson plans, and presentations to professional meetings and received many extramural grants to support the work. Moreover, the group has congealed into vibrant community of scholars, collaborating of a variety of topics and developing deep expertise in the field of values based supply chains and strategic partnerships. We request funds to continue the work. We anticipate the research falling into four main categories, distilled to the objectives below: economic performance of supply chain actors, contributions to community well-being, contributions to the environmental well-being; supply chain governance; policy implications. It is important this work be done as a multi-state project, given the diversity of the scholars and setting in which we work, and our ability to learn together and share lessons across contexts. The research is technically feasible: we will use well-established research methods with which our team has established expertise. Our objectives will lead to improved opportunity and viability for mid-sized farms and increased vibrancy of our food system and rural communities.