Farm-based Enterprise Development: Lessons Learned

Since 1993 Southern SAWG has undertaken research and planning projects to guide our work in enterprise development and to help other organizations and individuals identify program priorities.  Below are the descriptions of two of our projects and our lessons learned:

Increasing the Effectiveness of Assistance for Southern Farmers (2004-05)

Integrating Farmer-driven, Value-added Enterprises into Sustainable Agriculture Systems (1998-2003)

Enterprise Development: Resources

Much of our work in the area of enterprise development has resulted in the production of accessible resources such as farm videos and enterprise manuals, profiles of successful sustainable farm operations, and links to publications and other helpful sites. Visit the link above to view the available resources, and check back often for updates and additions.

Increasing the Effectiveness of Assistance for Southern Farmers:

Results from a Planning Process led by Southern SAWG

From October 2004 through June 2005 Southern SAWG facilitated a planning process that identified some of the most important research, education or other project activities that would increase the effectiveness of sustainable enterprise development assistance for family farmers in the Southern United States. This project was partially funded by the Southern Region SARE program.

During the winter of 2004-05, we conducted phone interviews with key people from 23 agencies and organizations that offer assistance to farmers in areas such as business planning, product development, financing and capitalization, production, marketing, distribution, entrepreneurship, and the development of cooperatives or other business partnerships. In April 2005, we convened a meeting to review the survey results and compile a list of strategic activities that would increase the effectiveness of this work in the South.

Suggested Research and Education

The following are suggested activities focused around five areas that were felt to be some of the most important to increase the effectiveness of sustainable enterprise development assistance to farmers in the Southern United States.

Research and education on sustainable/regional food systems

1. Identify the key components and principles of a sustainable food system. How do they connect and relate to make up the system?

2. Create an educational dialogue on sustainable food systems and their viability, their impact on the community, and opportunities for the farmer. What components are in place? What components need to be developed and how?

3. Facilitate the development of strategies (or "blueprints") for building more sustainable food systems in each state. This would include some type of assessment of current components and infrastructure.

4. Specifically describe the opportunities for farmers in the system, and help assistance providers understand how to provide assistance in a way that takes advantage of the benefits of these emerging systems.

5. Identify needed next steps for research and for successfully implementing sustainable/regional food systems in our region.

Enhance networking, collaboration, cooperation, and partnerships

1. Map where sustainable enterprise development resources are allocated.

2. Facilitate the coordination of resources through enhanced networking, collaborations, and partnerships.

3. Help farmers have input on development of resources and become more equal partners in assistance programs. 

Create a marketing information service for direct marketers 

1. Develop a system of on-going research on markets and price information at local levels. Especially look at market analysis on consumer demand for sustainably produced products.

2. Assess, consolidate and deliver this information to farmers. Develop a system for this information to be easily accessed by farmers. 

3. Conduct research on gaps in marketing information.

Enhance enterprise information and entrepreneurship

1. Compile and circulate successful enterprise models that could be used by farmer entrepreneurs. Focus on components or principles of the enterprises that can be applied to other enterprises or other locations.

2. Provide training for assistance providers on how to analyze new enterprises, how to find and use enterprise models and budgets, and how to create enterprise budgets.

3. Facilitate entrepreneurship training for assistance providers, using expertise that is already in our region. Find a way to institutionalize this within organizations and agencies that assist farmers.

Research farmer coops and facilitate development of new collaborations

1. Conduct research on farmer cooperatives (or other marketing collaborations) to determine what assistance is successful, what assistance is not successful, and why. 

2. Establish a staffed program for facilitating development of collaborative marketing and other sustainable enterprise activities among farmer groups.

For Further Information

A complete 20-page report on all of the survey results is available for free. The report has extensive information on:

1.   Which programs people feel are most effective in helping farmers.

2.   Other programs or activities that respondents would like to see implemented in our region.

3.   Barriers that are perceived as keeping organizations from being more effective in this work.

4.   An expanded list of research and information needed to increase the effectiveness of this type of work.

5.   Background information on some of the organizations doing this work in the South.

The full report is available in PDF format by clicking here.

Integrating Farmer-driven, Value-added Enterprises into Sustainable Agriculture Systems

From August 1998 to April 2003 Southern SAWG managed a project entitled "Integrating Farmer-driven, Value-added Enterprises into Sustainable Agricultural Systems." This project was partially funded by the Southern Region SARE Program.

We developed and tested a model for providing information and training to sustainable family farmers who would like to create farm-based, value-added enterprises. In support of this service, we completed a report on the keys to creating successful enterprises and established an information bank of resources supportive of these enterprises. These are the most important lessons learned from that project.

Ten Most Important Lessons Learned

1.) The development of better services to help farmers, farmer organizations and farm-based entrepreneurs hatch new businesses or expand current businesses that add value to sustainably produced farm products is greatly needed. Even when people differed slightly on how to provide the service or how to finance such a service, everyone involved with this project felt that it was urgently needed.

2.) Even though the focus of the project was on adding value, farmers need assistance in a whole systems, whole farm manner. Assistance needs to be delivered in a whole systems way or at least coordinated by someone who helps the farmer keep whole farm goals in mind. For instance, assistance solely on processing and market development will not be adequate for a farm that also has enterprise barriers related to production, business management, or even planning.

3.) Providing assistance in a whole systems manner must also include an aspect of personal counseling or coaching. Often thinking patterns and emotional patterns of the farm manager are barriers just as difficult to overcome as lack of technical know-how. Some of the most important assistance a consultant can provide is more interpersonal than technical. 

4.) Assistance is much more useful if it is delivered in a "one stop" system. Most farmers don't have the time or skills to hunt and peck through numerous resources, hoping to find information on value-added enterprise development one kernel at a time. If one agency or one consultant can facilitate the complete service delivery, farmers are much more likely to stick with the process until they get what they need.

5.) When farmers are matched with consultants who can talk through problems with them and help them create a plan, the farmers are more motivated to take calculated business risks and create value-added operations. One-on-one attention is crucial both for developing new ideas and overcoming fears.

6.) The most valuable sources of information are producer entrepreneurs who have gone through several trials and errors already, and created successful enterprises. Yet these producers may not have the time or teaching skills to train others. Assistance providers can take advantage of these practicing experts by facilitating a visit to their farms, facilitating a discussion between the experienced entrepreneurs and farmers needing assistance, paying the producer entrepreneurs for their time, and following up the visit with further analysis and information.

7.) Even though we can identify general principles for success in creating value added enterprises, there is rarely one learning and development approach that works for everyone. Assistance must be tailored to each client, along with numerous opportunities and channels for clients to provide feedback on the assistance, the quality of help being provided, and reassessment of future goals.

8.) Consultants or organizations that facilitate value-added enterprise development need to know how to access other appropriate experts, including business planners, accountants, bankers, legal experts, and marketing professionals. If some sort of database or network of possible consultants and organizations could be developed and maintained, it would provide an important tool for service providers.

9.) Organizations and agencies that focus on sustainable agriculture need more expertise in small business management and entrepreneurship, and organizations that focus on small business management and entrepreneurship need more expertise in on-farm applications. There is a need for networking and collaboration between organizations with good business and entrepreneurship information, and organizations that work with family farmers and the sustainable agriculture community.

10.) Prospective farmer clients, consultants, facilitators, organizational directors, and evaluators all need to be involved in planning, implementing, and evaluating program efforts. Dedicated participation will help ensure that the services are farmer-friendly, organizationally sound, and contain appropriate training procedures.

Areas Needing Additional Study

1.) The keys to successful farm-based, value-added enterprises that we developed should be explored with other entrepreneurs around the country, refined by additional research, and updated as appropriate.

2.) There is a need for information or models that will help a farmer entrepreneur decide when it is advantageous to add value to an item themselves, when it is better to partner with someone else to add value, and when it is better to not add value. Research comparing management, labor, investment, and net return under each condition is needed to help farmers make more informed decisions.

3.) We need to create innovative ways to deliver training and services--including providing expert consultants--to farmers in an individualized way that is also cost effective.

4.) There is a need to create more effective ways to have farmer entrepreneurs network with one another. We need to find ways to overcome barriers of long distance, lack of time, and the reticence to disclose proprietary information.

5.) A system of compiling and sharing names of local experts who can act as consultants to farmer entrepreneurs is needed.

For a copy of the complete Southern SARE project report, contact Keith Richards at Keith@ssawg.org.