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Bringing the Market to the Farm

Students learn how community supported agriculture (CSAs) is changing the relationship between the farmer and the consumer.

Introduction

Most people get their fruits and vegetables from the grocery stores. But increasingly there are alternatives for consumers to get agricultural products.

Instead of the producers (farmers) bringing their goods to the market, more consumers are heading to the farm.

Learning Objectives

  • Be able to define community supported agriculture (CSA).
  • Identify community supported agriculture (CSA) projects in their area.
  • Recognize that there are both costs and benefits of CSAs for
    consumers, producers and the local community.

Resource List

  • Local Harvest: Founded in 1998, they are now the number one informational resource for the Buy Local movement and the top place on the Internet where people find information on direct marketing family farms.
    www.localharvest.org/
     
  • Community Supported Agriculture: This is the Department of Agriculture's site on community supported agriculture.
    https://www.ams.usda.gov/local-food-directories/csas
     
  • Interactive Benefits Activity: In this activity students will explore the benefits to the producer, consumer, and local community of community supported agriculture.
    Interactive Benefits Activity
     
  • Interactive Costs Activity: In this activity students will explore the costs to the producer, consumer, and local community of community supported agriculture.
    Interactive Costs Activity

Process

Ask the students where they get the majority of their fruits and vegetables? When you mention buying fruits or vegetables, most people assume you mean that you buy them from a supermarket. Tell the students that there are other options now available for buying their groceries directly. Use the example that if they wanted some fresh cranberries to make cranberry sauce for Thanksgiving, where could they go instead of a grocery store? To see some choices, have the students look at the "Local Harvest " website. Have them type in "cranberries" in the description of product category and do a search. Ask them what they found? [Answers vary]. Tell them that as they can see, many of the choices involve picking your own cranberries.

Now have the students type in the names of other food items they might like to find or look at. Tell them that their is the product list to see what items are available. Check to see if there any products that they think might be available near where they live. Depending on where they live, they may have a great many choices or they may have none at all.

Tell the students that consumers have been getting produce and other items from farmer's markets and family farms such as those above for some time. 

Tell the students that a relatively new approach that also brings consumers and producers (farmers) together is the CSA (community supported agriculture).

Explain to them that a CSA is a group of individuals that support a farm operation so that the crop grown really belongs to the consumers. Tell the students that in most cases, supporters (consumers) make a pledge to support the farm throughout the year by buying a share of the season's harvest. The price paid is usually the cost of running the farm divided by the members in the community. Members help pay for seeds, fertilizers, water, equipment, and labor. In return, the members receive seasonal fresh produce throughout the growing season. CSA farmers often use organic or biodynamic farming methods. Most CSAs produce a diversity of vegetables, fruits and herbs. Many also offer eggs, meat, milk, baked goods and even firewood to their members. There are no middlemen, packing or transportation costs. Some members even participate in the farming operation to keep costs down. If the farmer produces more than is needed by the members in the CSA, the members would need to decide who gets the additional money if the overage is sold. CSAs are generally developed in conjunction with small farms but could be adapted to larger operations.

Tell the students that CSAs do not represent a true market economy. In a market economy, production decisions are made by entrepreneurs acting in what they perceive to be their own best interests. Individuals seeking profits are free to produce whatever good or service they desire. Consumers will decide if they will buy this good or service. Competition forces producers to use efficient techniques of production and to respond to changing consumer preferences. Businesses that are inefficient will lose customers to their competitors. CSAs essentially eliminate the competition and would seem to eliminate the incentive for efficient production. However, in the long run, if CSAs are not efficient in satisfying consumers, consumers will then leave the CSA and probably return to more traditional markets.

Explain to the students that CSAs can be found in many states. To see if there are any CSAs near the students, have them look at the Department of Agriculture's site on community supported agriculture. If there are none in their state, see if there are any in a neighboring state. Ask the students if they think people in their community would join a CSA if one were available?

Have the students complete the following Interactive Benefits Activity, and have them match which benefits are benefits to the consumer, which are benefits to the producer, and which are benefits to the local community.

[Answers to Interactive Benefits Activity:

BENEFITS TO CONSUMER

BENEFITS TO PRODUCERS

BENEFITS TO LOCAL COMMUNITY


Produce may be at below retail price
High quality and freshness
May be organically grown

Price received covers costs of production
No time spent finding buyers
Little or no transportation cost
Guaranteed market
Preserves small farms

Keeps food dollars in the local community
Maintains a more diversified agricultural community
Support of a local business
]

 

Have the students complete the following Interactive Costs Activity, and have them match which costs are associated to the consumer, which are costs to the producer, and which are costs to the local community.

 

[Answers to Interactive Costs Activity:

COSTS TO CONSUMER

COSTS TO PRODUCERS

COSTS TO LOCAL COMMUNITY


Increased shopping time due to inconvenient location
Possibly higher cost than in grocery stores
Less selection
Long-term commitment

Possibly lower price received than current market price
More different crops to manage
Less control over production decisions

May adversely affect other businesses (local grocers)
May not generate highest revenues or taxes
May not be highest use of the land]

Conclusion

Explain to the students that in order for any market to be successful, both producers and consumers must satisfy their needs. Use the example of the farmer who wants to make a profit from his crop. [Profit = Revenues – Cost.] A consumer wants a quality product at a good price. If the farmer produces more than is needed by the members in the CSA, the members would need to decide who gets the additional money if the overage is sold.

  • As with benefits, there are costs for both the farmer and the consumer. Can you think of some costs or potential disadvantages to the consumers in a CSA? [If there are not enough members, or the cost of production is high, consumers may end up paying more than retail prices for the same amount of produce. Since farms are probably not as conveniently located as supermarkets, there is a transportation cost as well as time involved for consumers. If the crop fails, consumers may end up with no produce for their money invested. The CSA agreement commits the consumers to receiving produce from one producer for an entire season or year. The consumer can’t "shop" around – no competition. The produce may not be as high in quality as produce in the supermarket.]
  • What are some costs to the farmer in a CSA? [The farmer may receive a lower price than he could get if he sold to grocery stores or other markets; the farmer may have less control of his farm due to members’ involvement; the farmer may have to grow a greater variety of crops to satisfy members.]

Assessment

To see how an actual CSA works, let's consider a typical example. Farmer Bill of Green Acres Farm can grow a variety of fruits and vegetables on his farm and the growing season is about seven months long. To grow the widest variety of produce, Bill estimates it will cost him about $175,000, which includes his labor costs and desired profit. He can deliver produce once a week for 32 weeks. If he expects to sell "shares" in this CSA to 200 local consumers.

View Interactive Activity

  1. How much is the cost per member? [The cost per member is $875. (175,000/200 = $875)]
     
  2. How much is the cost per member per week? (calculate based on the number of weeks produce is received) [The cost per member per week is $875/32 = $27.34.]
     
  3. Is this a reasonable cost for most families for weekly produce? [Answers will vary but the amount probably will be higher than some families spend per week.]
     
  4. If the average consumer only wants to spend $20 per week on fresh produce, how many members must Bill have in his CSA? [32 weeks x 20 = $640 total cost per member; $175,000/640 = 273.4 = about 273 members.]
     
  5. If members of the CSA will work on his farm, Bill estimates he could save $60,000 in labor costs. If there are 200 members in the CSA, how much will each member pay per week? [$115,000/200 = $575 total cost per member; $575/32 weeks = $17.97]
     
  6. If there are only fifty members in the CSA, what is the cost per member per week? [If there are only fifty members in the CSA, the cost per member per week is $109.38.]
     
  7. Is the cost too high? [Yes, the cost is too high.]