Job Creation Starts With Investment in Food Entrepreneurs

It’s time to support farmers who think small. In the latest report showing how small-scale farmers get the shaft, the Center for Rural Affairs found that a poor understanding of sustainable agriculture has led to a bias against lending to these farmers—many of whom are deemed too risky so they get charged extra fees. And banks aren’t the only ones neglecting these growers.

Development agencies across the country are ignoring the needs of small-scale producers and other small food enterprises, offering few opportunities for business assistance and training. Without small business development resources, those in regional food production have limited access to the capital needed to grow. Across the country, small and midsize producers, processors, and distributors provide critical support to local economies by creating jobs and building wealth that stays in the community.

Despite all the benefits of that small and mid-sized food business bring, here in the Puget Sound region, the local food movement isn’t recognized as a growth industry. They may not be Boeing or Microsoft, but food-related businesses in King County generated 118,000 jobs and over $3 billion in payroll in 2008. Local food producers often pay livable wages, treat animals with greater care than traditional agriculture and grow food in a way that replenishes soil, rather than depleting it.

But apparently you can’t take good business practices to the bank. The local food movement generally strikes out when it comes to economic development agencies and this is hurting communities. If we are going to increase access to fresh food and build more resilient communities, we have to invest in scale-appropriate infrastructure for small and mid-sized food enterprises along the value chain.

There are some steps forward in the Pacific Northwest. This year the City of Seattle issued Farm Bill Principles calling for bigger investment in smaller farms. In Everett, Washington a 60,000 square foot food hub is being developed for all the activity that happens after harvest. Food hubs provide facilities to aggregate, package, market and distribute products from multiple farms. They provide skilled staff to help small farms manage record keeping and logistics. The Everett hub is a partnership between a private developer and the Snohomish County economic development agency and will include a commercial kitchen to support processing and a retail market for local goods. This kind of regional investment in business incubation boosts access to institutional markets and makes regional food more available to everyday consumers.

Unfortunately, small food enterprises are too often are rebuffed when they search for assistance from county development offices. To fill this gap, some private and non-profit entities have stepped in. Organizations like Slow Money support food entrepreneurs with technical assistance and investment. Slow Money has 2,000 investor members nationally who are eager to provide patient capital to the right businesses—those that can demonstrate their savvy with well-crafted business plans. Helping prepare these plans is just the kind of technical assistance development offices should provide by shoring up their small business programs and tailoring them for building regional food economies.

We are told, after all, that small businesses are the backbone of the American economy, comprising almost 90% of all businesses in the United States. So what are agencies doing to support these engines of economic prosperity? If your business happens to be running a small food enterprise, the answer is not much. The U.S. Department of Agriculture’s $14 billion a year in subsidies go to huge commodity growers of corn and soy. Small acreage specialty crop producers receive less than one percent of federal agricultural subsidies—about $100 million a year.

It seems clear that increased federal investment is unlikely, so local jurisdictions need to find solutions that work locally. Development agencies could be doing a host of things to maximize regional food production and distribution. A critical step would be providing the market research and feasibility studies needed to identify infrastructure and technology needs. Local agencies could also support and promote food-processing entrepreneurs.

In Boulder County, Colorado feasibility studies completed by the Food and Agriculture Policy Council have led to a commitment to invest in commercial kitchen space. Working with stakeholders from across the county, the council and the parks department are developing plans to build out kitchens at the county fair grounds. They plan to make the space available at hourly rates, which are much more affordable for micro-enterprises.

Direct market farmers have been the catalyst behind school gardens and farm-to-school projects. They are the reason there is so much excitement around teaching our kids to eat right. But they can’t grow their businesses by attending ever more farmers markets. Expanding markets for small-scale food producers could be the most “shovel ready” projects in the nation. Investment in scale-appropriate infrastructure would not only employ thousands of people across the nation immediately, it would also promote good health and strong local economies.

3 thoughts on “Job Creation Starts With Investment in Food Entrepreneurs

  1. I cannot express the excitement I felt after reading Tammy Morales,s excellent article of awareness. We hear on a constant basis from politicians that things have to be better for small businesses but offer no other solutions than “what will help me politically “.
    I was washing a Costco plumb to get rid of the protective grease and pesticides while reading Tammy’s comments. Thanks Tammy for giving me a better incite.

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