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Can Virginia Communities and Counties Seize an Economic and Social Opportunity with Farm-Based Local and Regional Economic Development?

Authors as Published

By Eric Bendfeldt (ebendfel@vt.edu), Area Specialist, Community Viability, Northwest District, and Kenner Love (klove@vt.edu), Extension Agent, Agriculture and Natural Resources, Rappahannock County

The recent economic downturn and recession have forced many Virginia communities and counties to face new financial and social challenges; evaluate their current situation; and reevaluate their community assets, resources, and overall economic development strategies.  For many communities the situation has brought issues of community viability and rural quality of life to the forefront of discussion and planning as communities readjust and plan for the future. For Virginia farmers, farm profitability and economic viability are critical concerns as many agricultural sectors deal with financial crises resulting from the economic downturn.

In tough economic times new economic and social opportunities usually develop.  However, the challenge is recognizing and seizing these opportunities, particularly when there are immediate and pressing concerns demanding a response.  Presently, farm-based local economic development that is intentional and strategically planned seems to present unique economic and social opportunities for Virginia communities and counties, particularly with the unprecedented current public interest in local foods and health.

In 2006, the total economic impact of agriculture-related industries in Virginia was $55 billion and 357,100 jobs.  Reports show that every job created in agriculture and related industries results in another 1.5 jobs and generates an additional $1.75 of value-added benefits to the Virginia economy.1  The effects of a strong and diverse agriculture already reverberate through Virginia’s economy and business sectors, but new opportunities continue to present themselves for strengthening Virginia farming and the economy.

Virginia agriculture is certainly not one-size-fits-all, but to remain viable and profitable, Virginia farmers need alternative profitable markets and marketing strategies.  The 2006 economic impact data seems to indicate no need to worry about alternative markets and marketing strategies for Virginia farmers.  However, other data reveal economic, social, and environmental reasons for concern about the future of Virginia agriculture.  Many small and mid-level farms, those with annual gross sales of between $2,500 and $500,000, in Virginia struggle to survive financially. As a result, Virginia experienced a significant decline in the number of small and mid-level farms from 1997 to 2007 (Figure 1).

These farms represent an important dynamic in communities and are a critical segment of Virginia’s food and farming industry.  Similarly, they own the majority of farmland critical for food production.  Without a bold new strategy for farm-based economic development that considers this important segment, Virginia will continue lose farmers and farmland because of poor economic conditions in the agriculture sector.

   

image 1 Figure 1. Percent change in farm numbers based on sales category and gross annual receipts, 1997 - 2007.

 

In 2007, 62% of all Virginia farmers reported a net loss from their farming operations.2  The net loss of farm income is the primary reason for the tremendous loss of farmland in Virginia.  During the 5-year period from 2002 to 2007, an average of 104,000 acres of Virginia farmland was taken out of farm production each year and converted to other land use.3  With impact data showing the continued importance of agriculture to Virginia’s economy, why should the state lose so many of its mid-level farms, which are well suited to grow local food and serve a regional food system?  The current unprecedented consumer demand for these local products offers a potential solution to the loss of farms and farmland by creating jobs, land retention, and broader economic and social benefits.  Mid-level farms are critical because they have the land base to grow the food consumers are demanding. 

At the Virginia Food Security Summit in 2007, Ken Meter of the Crossroads Resource Center, reported revenues lost by the state since the majority of Virginian’s food purchases are of non-Virginia foods and farm products.  He cited that Virginians annually spend $14.8 billion on food ($8.1 to eat at home, and another $6.7 billion to eat out).  Of this amount, approximately $8.9   billion represents a lost economic and social opportunity for Virginia farmers and communities because the money is spent on food coming from outside Virginia, is not as economically embedded in communities, and generally leaves the state.  He also suggested if Virginia consumers bought 15% of their food directly from local farms, farms would earn $2.2 billion in new income.4  A similar study by Virginia Cooperative Extension showed that if each Virginia household would spend just $10 of their total weekly food budget on local food and farm products, this purchasing decision would annually generate $1.65 billion in direct economic impact for Virginia’s economy.5

To seize the economic and social opportunity that the growing consumer demand for local food represents and retain a larger share of Virginia’s food dollars, public, private, and civic sectors in Virginia should work together to build a statewide local farm and food system that meets consumer demand for local and more regionally-based food. The recent growth and popularity of Virginia farmers’ markets is one indicator of growing interest by consumers in these products, and there is also growing interest by institutions as part of farm-to-school and university programs and other larger volume markets.  Currently, Virginia colleges and universities, corporate cafeterias, schools, hospitals, museums, restaurants and grocery stores are unable to procure adequate supplies of products grown and marketed by Virginia farmers that their clientele and customers are demanding. 

A statewide locally-based farm and food system that shortens the distance from farm to table can be part of the solution to Virginia’s current economic woes and a force for future economic and social development at the local, regional and state level.  The system would complement existing systems and further bolster Virginia agriculture by diversifying the rural farm economy, increasing market opportunities and farm profitability, and seizing on consumer demand. Increasing local supply would foster and incubate new enterprises and community initiatives to create and retain jobs.  Community viability would be strengthened by more effectively and intentionally linking people to their culture, land, agriculture and natural resources, and by benefitting human health, the environment, heritage, and a sense of place.  Additionally, the effort and system would increase the ability of consumers and producers to have increased choices and opportunities so necessary for improving the overall quality of life for Virginia.

To develop and support a statewide farm and food system that makes Virginia food and farm products more readily available and accessible to all consumers and keeps millions, or even billions of dollars in the state, Virginia will have to provide leadership and encourage rural, urban, and suburban communities to cooperate statewide to develop local farm production, infrastructure and distribution, consumer access, and public education.  New farms, together with small and mid-level farmers interested in transitioning to serve this demand, will need agronomic and entrepreneurial training, access to land, labor, equipment, and capital.  Agricultural and food entrepreneurs need increased community and public support to build Virginia-based value chains to deliver large volumes of local Virginia farm products to schools, institutions, and other in-state markets.  Localities and communities will have to encourage farming, protect farmland, and insure the future productive capacity of arable land.

Virginia can develop a statewide food and farm system and foster this type of farm-based local and regional economic development by (1) integrating food and health systems; (2) developing policies to encourage local sourcing of food (e.g. a goal for state institutions to procure at least 25% of their food locally by 2025); (3) local initiatives to protect farmland and the future productive capacity of arable land; (4) supporting local food and farm programs and initiatives of Virginia Cooperative Extension to facilitate the development of local and regional food systems; (5) supporting the Virginia Food System Council and its mission; and (6) recognizing and paying farmers for societal and ecosystem services (e.g. carbon sequestration).  A farm-based economic development plan and system to increase the supply of Virginia’s local food will foster job creation, accelerate new farm, food, and community initiatives at the local, regional, and state level, and further the recovery and revitalization of Virginia’s economy and communities. 

1Rephann, T.  2008.  The Economic Impact of Agriculture and Forestry on the Commonwealth of Virginia:  the Study in Brief.  Weldon Cooper Center for Public Service:  University of Virginia.    Charlottesville, Virginia.
2USDA 2007 Census of Agriculture – State Data
3Virginia Department of Agriculture and Consumer Services Offices of Farmland Preservation http://www.vdacs.virginia.gov/preservation/ (Accessed September 24, 2009)
4Bedarf, A.  2007.  The Virginia Food Security Summit:  The Final Report Findings and Recommendations.  May 11, 2007.  Charlottesville, Virginia.
5Benson, M. and E. Bendfeldt.  2007.  Annual Community Food Dollars Generated if Each Household in Virginia Spent $10/Week of Their Total Food Dollars on Fresh Local Produce and Farm-based Virginia Products.  Virginia Cooperative Extension Bulletin.

Rights


Virginia Cooperative Extension materials are available for public use, re-print, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Publisher

Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Alan L. Grant, Dean, College of Agriculture and Life Sciences; Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; Jewel E. Hairston, Administrator, 1890 Extension Program, Virginia State, Petersburg.

Date

October 7, 2009