From the Farmer's Tractor
August 24, 2008
The number of farmers markets grew by 150% over the last decade, according to the USDA, thanks to growing consumer interest in obtaining fresh, local and organic products. Linking urban communities to farmers, farmers markets represent an important and increasingly popular way for farmers to connect with consumers.
Long before the rise of the retail agribusiness system, farmers markets represented a crucial link in the community food distribution system, and they continue to do so today. Farmers markets serve as an important direct producer-to-consumer business opportunity. They also help to establish a loyal customer base between entrepreneurial and small farmers and the non-farming community.
After years of decline, farmers markets emerged in full force following the passage of the Farmer-to-Consumer Direct Marketing Act in 1976, which helped develop and expand the direct marketing of agricultural commodities from farmers to consumers. The Farmers Market Promotion Program, created in the 2002 Farm Bill to continue the expansion of domestic farmers markets, further fueled the trend.
“Farmers markets are quite individual to each community,” says Jim Bingen, Professor of Food and Agriculture at Michigan State University and a Farmers Market Coalition board member. “They offer one means for people living in small communities, suburbs and cities to re-connect with farmers in surrounding areas. In some areas, they have become real ‘go-to’ places. Regardless of size, farmers markets today are part of a diversified marketing strategy for farmers.”
There are more than 4,300 operating farmers markets in the US, amounting to about $1 billion in annual sales. The number of farmers who sell at them has more than tripled since 1994. More than three million Americans a week get their fresh food directly from the farmers who grow it. Nineteen thousand farmers reported selling their products exclusively at farmers markets in 2000. Sixty-nine percent of farmers participating in farmers markets also sell their products (in higher volumes and at lower margins) to retail.
Farmers can make up to 60% more by selling their products directly to consumers than by selling them to wholesalers, but a retail presence is a significant part of the farmer-consumer relationship too. Through retail, smaller farmers can reach a group of consumers that may not be visiting local markets. Plus, their place on the shelves helps to educate consumers about the local movement and, in theory, drive consumers toward more sustainable behaviors.
“In many towns, local retailers still see farmers markets as competition though,” says Bingen. “This is why more local community discussion is needed to sort out the value of a farmers market as a community enterprise.”
The overall volume of produce sales via farmers markets is small, at less than two percent of US sales overall. However, the markets offer great opportunities for sellers of organics and other small operations to find an audience. The USDA found that organic growers participated in more than four-fifths of the 210 markets they studied in 2002, representing about one-third of regularly attending farmers.
Most recently, at the USDA’s National Farmers Market Summit, participants discussed the possibility of creating a single national trade organization for farmers market stakeholders, similar in nature to the Farmers Market Coalition (FMC). Although the USDA and FMC recognize the decentralized nature of growing markets, some key issues, like the importance of increasing consumer access in low-income areas, may be better addressed on a national level.
Other issues currently affecting farmers markets include the newly instated ability to use food stamps at most markets, wireless capabilities, and the establishment of education programs that speak to consumers on topics like public health, economic sustainability and local food systems.
“In the US, farmers markets have come and gone. For growth to continue, it will necessary for those who support the markets, including consumers and local governments, to see them as a new type of community and economic enterprise,” says Bingen.