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Feature   |   Fall 2003

A new generation of opportunity

Walk down the long rows of melons, peppers, tomatoes, pumpkins, flowers and other agricultural products at the Clearspring Produce Auction and you'd think a megafarm is behind the bounty.

Not so. About 40 small farmers—many of them Amish—pooled their ideas and resources to establish this growing LaGrange County growers association, which rang up about $430,000 in sales in 2002.

Although the auction is another way for the partnering farmers to sell their produce, the growers association is more about survival, says Steve Western, Clearspring's manager.

“The Amish want to farm 20 acres of corn and milk 15 cows, and that doesn't cut it anymore. You've got to be bigger,” Western says. “For these Amish boys to stay on a 60- or 80-acre farm, they're going to have to diversify with this produce. This is the up and coming thing.”

As Clearspring developed into a regional agricultural business, its partners have increasingly turned to Purdue University for technical and management advice. To help other producer groups statewide also get off on the right foot, Purdue Extension specialists and county educators have formed the New Ventures Team.

The team is made up of Extension specialists in agribusiness marketing, consumer economics, community development, food processing and rural business development, as well as Extension educators from 13 Indiana counties.

The team's mission is to provide educational information and other services to Hoosier producers interested in starting value-added and alternative agricultural businesses. “There are lots of different reasons for Extension to be involved in value-added enterprises,” says Steve Engleking, Extension educator in LaGrange County and a New Ventures Team member. “One is the profitability of the small farm. Small farms usually employ part-time people. They probably have as much or a greater need for education than some of the larger farms, which tend to turn to fertilizer and seed dealers for technical advice.”

Small farms also strengthen national security—an important issue in these troubling times. “A decentralized food system is harder for terrorists to attack,” says Engleking, who's worked with Clearspring the past three years. “It's also good for the overall economy. Small businesses employ most of the people in this country.”

New generation cooperatives, or NGCs, are springing up across the nation, says Joan Fulton, New Ventures Team co-chairperson and an associate professor in Purdue's Department of Agricultural Economics. Several producer groups in Indiana are close to forming NGCs or partnerships of another form, including operations that would sell freezer beef directly to consumers, produce ethanol and process corn into masa flour.

“There are people in Indiana saying, ‘Let's see what's available in terms of value-added processing of the products we produce,'” Fulton says. “Members of our team are already working with some of those groups.”

Agricultural cooperatives have been around for decades. According to the Center for Cooperatives at the University of California , there are more than 4,000 ag co-ops in the United States , with an annual total net business volume of more than $89 billion.

NGCs share many characteristics with traditional co-ops but are different in three significant ways. “New generation cooperatives are involved in value-added processing of the farmer's commodity,” Fulton says. “The other differences have to do with the organizational structure. In traditional cooperatives, if you want to get your equity investment out of the cooperative, the cooperative has to pay you out,” she says. “Also, in the new generation cooperatives, the producers/owners can sell their shares—what we call ‘tradable equity shares.'”

Last December, the first Extension publication from the New Vewntures Team was published: ID-315, New Generation Cooperatives: What, Why, Where, and How . www.extension.purdue.edu/extmedia/ID/ID-315.pdf . The publication is an Internet guide of resources about the cooperatives and is available at Purdue Extension county offices or online.

The New Ventures Team plans to develop other Extension publications and programs in the months and years to come, says Jerry Nelson, New Ventures Extension educator and co-chair. “We want to deliver programs that help people understand the steps they'll go through to start a venture in value-added agriculture,” he says. “Agriculture is changing, and the New Ventures Team was formed to address those changes.”

LaGrange County 's Clearspring Produce Auction has benefited from its relationship with Purdue and the New Ventures Team, says Western. “We're striving to be successful. We just need a little more oomph to get over the top.”

That final push could come courtesy of the New Ventures Team.

 

 

© 2003 Purdue University School of Agriculture

 

 

 

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