The Eastern Shore of Maryland and Delaware are ahead of the game in retail agriculture because of their proximity to a metropolitan area, said Gary Matteson of the Farm Credit Council.
City dwellers who visit the Eastern Shore are looking to buy a “prime experience” in the form of fresh produce because it tastes better. Shore farmers have been responding to that consumer preference as far back as the 1950s.
As a result, Mid-Atlantic Farm Credit, which serves this region, has had the opportunity to learn about this different kind of business and realize it is still a viable agricultural business.
The metrics that go into a lending decision may be different. For example, they take into consideration the marketing plan, which could make production secondary. The loan may be based on projected revenue in terms of “dollars per square foot of retail space, rather than the number of bushels per acre.”
Not all retail agriculture involves direct-to-buyer sales, but might also include sales to a local grocery store that will turn around and re-sell that to local consumers.
“Customers want it fresh and (recent surveys suggest) they want to feel they are contributing to the local economy,” Matteson said.
The local food movement is growing and will continue to grow in the foreseeable future.
A concern that many consumers share is for agriculture to remain viable into the future. As a result, many states and some local governments have looked into setting aside land for agriculture by setting up systems that allow farmers to sell development rights.
Even if the owner doesn’t farm the land, renting it to someone who will remains the only option to produce an income from land zoned for agriculture. Renting farmland is one way that beginning farmers are able to get started.
Vast acreage isn’t required for an operation designed to sell to a farm market. Matteson said many of these operations are part-time businesses, meaning the farmer hasn’t given up his day job. Because a metropolitan county represents a ready market for fresh produce, there are fewer farm starts in rural areas.
He noted that while the big operations accumulate most dollars, small businesses — including small farms — create the most wealth. That’s because the small business is local and integrated into the community not only buying from other local businesses but contributing to the community in other ways.
With large agri-business operations, diversity of crops is the exception rather than the rule. With small farms, diversity is the rule. The divide is between mechanical and non-mechanical harvest techniques, which are determined by the crop. Most small operations are more labor-intensive. But gradually even some large farming operations are setting aside some acreage for products in high demand from consumers, he said.