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Grade 6-8
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Lesson

Bringing the Market to the Farm

Updated: August 29 2016,
Author: Cheryl McGaughey

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.

Task List

In this lesson you will identify a CSA (community supported agriculture), identify the costs and benefits related to CSAs, and demonstrate how an actual CSA works.

Process

When you mention buying fruits or vegetables, most people assume you mean that you buy them from a supermarket. But there are other options now available for buying your groceries directly. For example, if you wanted some fresh cranberries to make cranberry sauce for Thanksgiving, where could you go instead of a grocery store? To see some choices, look at the "https://www.localharvest.org/clifton-nj " website. Type in "cranberries" in the description of product category and do a search. What did you find? As you can see, many of these choices involve picking your own cranberries.

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

Consumers have been getting produce and other items from farmer's markets and family farms such as those above for some time. 

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

A CSA is a group of individuals that support a farm operation so that the crop grown really belongs to the consumers. 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.

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.

CSAs can be found in many states. To see if there are any CSAs near you, look at the Department of Agriculture's site on community supported agriculture . If there are none in your state, see if there are any in a neighboring state. Do you think people in your community would join a CSA if one were available?

From the following interactive benefits activity, match which benefits are benefits to the consumer, which are benefits to the producer, and which are benefits to the local community.

From the following interactive costs activity, match which costs are associated to the consumer, which are costs to the producer, and which are costs to the local community.

Conclusion

For any market to be successful, both producers and consumers must satisfy their needs. A farmer 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?
  • What are some costs to the farmer in a CSA?

Assessment Activity

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?
     
  2. How much is the cost per member per week? (calculate based on the number of weeks produce is received)
     
  3. Is this a reasonable cost for most families for weekly produce?
     
  4. If the average consumer only wants to spend $20 per week on fresh produce, how many members must Bill have in his CSA?
     
  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?
     
  6. If there are only fifty members in the CSA, what is the cost per member per week?
     
  7. Is the cost too high? https://www.econedlink.org/
Subjects:
Economics,