Farmers can increase income by expanding small operations with creative new businesses
Farms that sell only fresh produce are dependent on buyers for markets and pricing. The UC Cooperative Extension small farms team in Fresno and Tulare counties believes farmers can earn more money by taking production a step further, by adding extra value to their products with processing, preserving and packaging the produce.
UC Cooperative Extension small farms advisor Ruth Dahlquist-Willard, the UC Sustainable Agriculture Research and Education Program, and Fresno State's Office of Community and Economic Development brought a group of small farmers together for a workshop in January to learn about resources available to help them develop value-added businesses.
“Value-added products can improve the bottom line of a small family farm by bringing in additional income and diversifying production,” Dahlquist-Willard said. “We wanted to connect beginning farmers and Southeast Asian farmers to programs that could help them develop and market value-added products from their farms.”
The value-added workshop included presentations from a farmer with a successful value-added business, government agencies and non-profit organizations. Alternative lenders such as Fresno Madera Farm Credit, who provided funding for the workshop, also presented on loans available for small-scale farms. UCCE agricultural assistant Michael Yang translated the presentations into Hmong.
Kingsburg organic farmer Paul Buxman opened the workshop with his personal journey into value-added production. Buxman's story begins in 1994 when a spring hail storm swept through his farm.
“The hail marked all my fruit. I had 100,000 pounds of plums, peaches and nectarines I could not sell. What could I do?” Buxman said. “An idea came to my head like a lightbulb. Take the fruit, cut off the scar, cook it and make jam.”
The new venture wasn't an instant success. Buxman found himself delivering unsold jam that first year to a Bay Area homeless mission, pulling up right behind a bread truck.
“Man does not live by bread alone,” he said with a laugh.
But each year he and his wife improved their product, and the market grew.
“This jam is so addictive, it's barely legal,” Buxman said. His “Sweet Home Ranch Homemade Preserves” costs $2 per jar to make, and sells for $5 each.
Buxman suggested the farmers at the UCCE workshop to try making a value-added product. The new products could be spices, food, cleaning products, handicrafts, and even experiences, such a teaching a skill.
“You have so much more to offer people than you realize,” Buxman said.
During the subsequent panel discussion, Kiel Schmidt outlined the support that Food Commons Fresno can provide. An important element is the opportunity to rent the organization's commercial kitchen to create value-added merchandise to health department specifications. Patti Chang of Feed the Hunger Foundation said her organization provides technical assistance and loans to new ventures that can carry out their mission of reducing hunger and helping people out of poverty.
“We worked with two Oaxacan women in Madera who didn't want to be field workers anymore,” Chang said. “They wanted to make a product from their culture: mole. They became a certified business, opened a bank account at Wells Fargo and opened a small restaurant in a grocery story. We helped them negotiate the lease.”
Eduardo Gonzalez of Fresno State's San Joaquin Valley Rural Development Center said his facility can help small businesses with marketing, website design and getting value-added products to market.
Dawn Goliik of the U.S. Small Business Administration said the organization can help small farmers start, grow and run businesses with training, mentoring and counseling.
“It's all free to you,” Golik said.
The UCCE small farms team also has a marketing associate, Lorena Ramos, who is available for farmers to contact regarding value-added product development.
Presentations and one-on-one consultations were offered by a variety of organizations that can loan funds, including Fresno Madera Farm Credit, Access + Capital, Northern California Community Loan Fund, California FarmLink, USDA Farm Service Agency and Valley Small Business Development Corporation.
The workshop ended with a presentation on California's Cottage Food Law, which allows residents to process and prepare foods in their own home kitchens to sell to the public. Some of the home-prepared products the law permits are jams, jellies, cookies, cakes and fudge, dried fruit, vegetables and spices. A complete list of approved foods is on the state website.
The Cottage Food Law is for businesses with a gross annual income below $50,000, which have no more than one employee (not including household members).
“There is no charge, just paperwork to fill out,” said Matthew Gore with Fresno County Environmental Health. “This isn't difficult, and we're here to help you with the forms.”
Dahlquist-Willard said an important part of her UC Cooperative Extension program is the connections she and Yang can help farmers make with the myriad services available to them.
“We encourage small farmers to contact us in our Fresno office,” she said.