May 6, 2004 - Portland City Club - Talking points
How does Oregon agriculture serve the food needs of the public?
If you want agriculture in Oregon to be a positive force in addressing the food security concerns of Oregonians, the industry must not only survive, but thrive.
That’s the message I hope you take home with you today. The best way for Oregon agriculture to play a role in providing safe, nutritious, and abundant food to Oregonians is to secure the economic and ecological viability of the agriculture industry.
Let me tell you about the unique nature of the industry in Oregon that sets it apart from agriculture in other areas of the country.
Oregon agriculture is made up of some 40,000 farms scattered all across the State. However, the industry is a vital part of the urban community. Five of the top six agriculture counties are located within an hour’s drive of Portland.
And unlike many other parts of the United States, Oregon has actually seen an increase in the number of farms in the last twenty years. Thanks in good measure to the forward thinking system of farmland protection put in place by Oregon’s legislature nearly thirty years ago.
Agriculture’s very existence provides a foundational economic and social infrastructure that defines the landscape of most of rural Oregon. What comes to mind when thinking of Fossil, Burns, Scio, Condon or Klamath Falls? Farms and Ranches. In a word, Agriculture. In most of these parts of the state it is the production and sale of agricultural products that returns dollars from urban customers from Portland to Tokyo, reversing the tide of out-migration of cash that would otherwise occur.
For all of Oregon, agriculture is an industry that equates to more than $8 billion in economic activity when you consider all the directly related goods and activities. One in twelve jobs in Oregon is connected to this industry.
The concept of corporate owned agriculture making big profits just isn’t true in Oregon. Over 97% of Oregon’s farms are family owned and operated, some by a husband and wife, some by single operators, and some through multiple family arrangements with children or siblings. The myth that Oregon agriculture is populated by large corporations making big profits just isn’t true.
On the farm, these family operations employ some 100,000 people during peak summer months, and about 40,000 during other times of the year. Farmers in Oregon pay the highest wages for farm work anywhere in the U.S. Much of this work is highly skilled, reflecting the specialized nature of Oregon’s mix of crops.
Another 22,000 people are employed by Oregon’s food processing sector.
All of you can fully appreciate the fact that another large economic engine here in Portland owes much of its existence to agriculture. The majority of the Port of Portland’s total tonnage of exports– about 60%– is agriculture sourced from Oregon and many other Western states as well as Canada. By volume, agriculture and food products are Oregon’s largest export. By value, they rank second only to electronics. Every billion dollars in agricultural exports supports 15,000 jobs. Eighty percent of what we produce in Oregon crosses our state’s borders and half of that moves into international markets.
So the question is why are export markets so important for Oregon agriculture?
First of all, Oregon simply doesn’t have the population to consume all that we produce. Many of these items are highly perishable and need to be marketed during a short period. Let’s use cherries as an example. About 60 million pounds of cherries are produced in Oregon each year. If every Oregonian ate the U.S. average of cherry consumption, that would still only be less than 9% of Oregon’s total cherry production. Growers would love to have Oregonians eat 10 times more cherries. But until they do, consumers in Japan, China and Europe are willing to pay premium prices for fresh Oregon cherries.
Oregon grows nearly all of the hazelnuts produced in the United States. Would hazelnuts continue to be grown in Oregon if most or all had to be consumed locally? And if they were, how would that help end hunger?
If our goal is to sustain Oregon agriculture, then we can’t do it by limiting market opportunities.
Profit margins in agriculture are very slim and production costs here are much higher than those in Mexico, China, or Chile. To be profitable, Oregon growers and processors must differentiate and add value to their products and find niche markets willing to pay higher prices.
So Oregon family farm incomes are very dependent on out-of-state sales, especially international exports. These diverse markets provide higher margins that mean the difference between profit and loss, and represent opportunities for products that are not readily sold in Oregon. As a traded sector, new money comes into Oregon by exporting products that are produced and processed here.
While exports are critical to Oregon agriculture, I certainly support more local purchases of Oregon-grown products. Because of a desire to know where their food comes from and that it is safe and fresh, there is an increased interest in locally-grown food products by Oregonians. Consider these statistics:
- The number of farmers markets in Oregon has grown from just 10 in 1990 to more than 60 statewide. Many are concentrated in the Portland Metro area.
- The number of roadside stands offering fresh produce is now more than 100. Again, many of those are located near our urban centers.
- A growing number of retailers are identifying and marketing locally grown products– even identifying the local farmer who produced the food.
- We have just initiated the “Brand Oregon” program to identify locally harvested seafood to buyers in the Portland and Salem area.
Some consumers even seek some sort of certification or label that shows where and how the food was produced. This is a growing niche market for which these consumers pay a premium. Some of these certification programs are offered by the Oregon Department of Agriculture, others by private groups. It’s important to note these programs are voluntary. However, many producers and processors are choosing to pursue certification in order to differentiate their products.
To specifically address the issue of making food accessible, both for short-term emergency needs, and through affordable and local supplies, let me make the following points:
- Oregon’s food industry (growers and processors) is the largest provider of donations to the Oregon Food Bank network, and provides 60% of all direct donations. Another 18% of what is received by the Food Bank comes from USDA food assistance programs. Think about that – nearly 80% of the volume of foods distributed by the Food Bank comes directly from donations by growers and food processors in Oregon, or the USDA surplus food products.
- The WIC Program (Women, infants and children) provides federal dollars to nutritionally needy families in Oregon whereby they receive redeemable coupons for fresh fruits and vegetables available at farmers’ markets. More than 6,000 families have participated annually in the program jointly administered by the Oregon Department of Agriculture and the Oregon Department of Human Services
- A similar program, the Senior Farmers’ Market Nutrition Program, provides coupons for low-income senior citizens to purchase fresh fruits and vegetables at participating Oregon farmers’ markets and roadside stands. Each year, nearly one million dollars in senior coupons are redeemed at Oregon farmer’s markets.
Frankly, I think you can make an argument that Agriculture and Food Processing is over represented on the donation side. Less than 1% of Oregonians contribute 60% of the total food. Imagine how many more hungry people could be served it other segments of Oregon economy stepped up the hunger plate in the manner that agriculture has.
Imagine if the high-tech, sportswear, lumber and banking industry invested as fully as agriculture has in fighting hunger. They could leverage the 60% that Oregon agriculture already provided into amazing benefits for the hungry here in Oregon.
One interesting plan is just now being developed by the visionary Hermiston Engineer Fred Ziari. He has developed a new program called “Farmers Ending Hunger”. Fred’s concept is very simple. It brings farmers together with urban non-farmers to specifically produce food for the Oregon Food Bank. Farmers will contribute up to 1% of their land to grow high-protein crops like beans and peas. Cost of production will be partnered through donations from the urban non-farm donors.
The simplicity of this program is astounding as it makes it easy for farmers to plant a few extra row of peas or beans and have the cost of production paid by their urban non-farm counterparts. The food bank gains as products chronically in short supply can find their way into food assistance programs around the state.
Programs like this are superb ways for us to continue to bridge the urban/rural gap in Oregon and do so through high-quality foods for local consumption.
Everyone has to eat. By offering a quality, fresh, locally-grown food product either at the grocery store, the restaurant, or the farmers’ market, consumers can begin to appreciate the value of sustaining Oregon’s agriculture industry
To have sustainable agriculture requires the active support of policies that assist farm families – from Klamath Falls to Hood River, and from Beaverton to Ontario. All of us should have a great appreciation for the long hours and hard work that farmers, farm workers, and others up and down the food chain devote to make it possible for those in this country to spend less than 10% of their disposable income on food. Food in the U.S. is less expensive than anywhere else on earth!
Let me emphasize the importance of a diversified market for Oregon agricultural products. For the most part, we do not overwhelm the marketplace with large volumes of product. Oregon agriculture must continue to look for opportunities to add value by processing what it produces. That’s how Oregon agriculture competes in a local, national, and global marketplace. That strategy is not confined to exports. Some of the commodities we produce need to be transformed through value added processing before Oregonians themselves can enjoy them. We don’t eat bulk wheat. We turn it into flour, which is then turned into bread or noodles. None of us probably eats a handful of cranberries right out of the bog. It is turned into juice or dried before consumption. Value can also be added through the way the commodity is produced. Specific management practices and certification programs often give products more clout in the marketplace.
Marketing options must exist for our agriculture. Many Oregon consumers choose to buy lower cost food items at large national discount retailers. In general, Oregon agriculture cannot be the low cost, high volume food producer. There are local retailers who offer consumers an Oregon choice– New Seasons is a good example. But at this time, the percentage of the population that will access these local retailers is relatively small and selectively targeted.
Still, there is certainly something all of us can do to strengthen the connection between Oregon agriculture and Oregonians, thereby strengthening the industry itself. I challenge all of you to ask for Oregon products wherever you shop and wherever you eat. A sustainable agriculture in Oregon means one that is economically viable, ecologically sound, and meets the needs of our citizens. But remember that economics are part of that sustainable equation. Agriculture must stay alive. The game is over if Oregon agriculture goes out of business. Then Oregonians will not be given the choice of selecting locally-grown food and will be dependent on somewhere else to provide a stable and secure food supply. We all have a role to play in making agriculture viable which helps set the table for meeting Oregon’s food needs.
|
