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Entrepreneurs
Keep the Local Food Movement Hot Local food businesses play a much more
critical role in economic development than commonly thought, a new report
shows

By John Tozzi <http://www.businessweek.com/bios/John_Tozzi.htm>

Entrepreneurs are flocking to local
food<http://bx.businessweek.com/local-food-movement/>,
starting businesses devoted to producing and delivering food within their
communities. Just as consumers focus new attention on what we eat and where
it comes from, farmers, foodmakers, restaurateurs, retailers, distributors,
and processors are rethinking the business models behind it. They want to
create enterprises that will succeed in the long run for local food to be
more than just a fad or a luxury for wealthy Western consumers.

A report, "Community Food Enterprise: Local Success in a Global
Marketplace," <http://www.communityfoodenterprise.org/> spotlights 24
ventures around the world that are pioneering models for local food.They
range from the sprawling Organic Valley
<http://www.organicvalley.coop/>farmer co-operative, which ships more
than $500 million in dairy and other
products annually, to a caterer in Zambia that has branched out to selling
processed food and equipment. The examples include private companies,
co-ops, and nonprofits. Whatever the form, all the enterprises are locally
controlled and aim to be sustainable business operations, not dependent on
grants or government subsidies.

The 190-page report, funded by the Bill & Melinda Gates
Foundation<http://www.gatesfoundation.org/>and the W.K.
Kellogg Foundation, <http://www.wkkf.org/> highlights the role local food
businesses play in economic development—creating jobs and bringing money
into a community.Michael Shuman, an economist at the Business Alliance for
Local Living Economies <http://www.livingeconomies.org/> and co-author of
the report, sees economic development intertwined with developing local food
systems.For example, the Appalachian Harvest
Network<http://www.asdevelop.org/buy.html>in the Appalachian region of
Virginia and Tennessee helps mostly poor former
tobacco farmers switch to growing organic fruits and vegetables for
specialty stores and grocers, replacing a shrinking market with a growing
one.Likewise, researchers found that the majority of the small farms that
sell their crops at New York City's green
markets<http://www.cenyc.org/greenmarket>could not survive without the
access to the city's customers that the
program provides.
Beyond Financial Goals

Staying economically viable can be a challenge for food enterprises.
Consider the growth of small farms in the U.S. Between 2002 and 2007, the
number of American farms increased by 76,000, according to the latest data
from the U.S. Agriculture Dept.'s Census of
Agriculture<http://www.agcensus.usda.gov/>,
compared to a decline of 87,000 in the five years before that. But half of
all farms in the U.S. have sales of less than $5,000, and just 5% have sales
above $500,000.

Local food ventures often have goals that are not strictly financial. Most
of the companies examined in the report factored in some nonfinancial issues
into business decisions,<http://www.businessweek.com/smallbiz/special_reports/20090403social_entrepreneurs.htm>such
as their impact on the environment, workers, and communities. They're
also not interested in growth at all costs. "In the mainstream business
universe, growth is the indicator of competitiveness," Shuman says. "Most
[local food enterprises] really see stability as a marker of
competitiveness."

Advocates for local food say success depends on nurturing an interlocking
network of small companies that produce, process, distribute, and sell food.
"We as a society and as an economy need to start optimizing for a large
number of small things, not just relying on a small number of large things,"
says Woody Tasch, founder of the Slow Money
Alliance<http://www.slowmoneyalliance.org/>,
a year-old nonprofit inspired by the Slow Food
<http://www.slowfood.com/>movement that is raising money from small
donors to seed local food
ventures.
Funding Hurdles

One of the barriers to developing stronger local food systems is financing.
People can't invest in local businesses as easily as they can buy shares of
stock in publicly traded companies, because securities laws make it
impractical for small companies to issue stock. For the same reason, the
vast wealth in pension funds and philanthropic and educational endowments
doesn't flow to small, local enterprises. Both Shuman and Tasch envision
ways to get more of that capital into local food businesses.

"Does anybody here think it's revolutionary if I say we should invest 1% of
our assets in local food systems?" Tasch asks audiences at conferences. Many
people raise their hands, he says, even if they agree with the goals such an
investment would support, like preserving soil fertility, fighting obesity,
and improving childhood nutrition.

Changing that attitude and creating mechanisms to let people easily make
such an investment are no simple tasks. But even without these changes,
entrepreneurs have begun to transform food systems across the world. Says
Shuman: "We found this incredible range of businesses that really show how
mature this industry is becoming."

For snapshots of each of the 24 enterprises featured in the report—from
restaurant chain Cabbages & Condoms in Thailand to the Zingerman gourmet
food empire in Michigan—flip through this slide
show.<http://images.businessweek.com/ss/09/12/1218_24_local_food_businesses/index.htm>

Tozzi <[log in to unmask]> covers small business for
BusinessWeek.com.

-- 
Dr. Teri Hamlin
North Region Agriculture Education
Georgia Department of Education
204C Four Towers University of Georgia
Athens, Ga 30602
706-542-3679 / 706-540-0032
[log in to unmask]