| Speeches by ODA Director Katy Coba |
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| The Farmer/Chef Connection |
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February 8, 2004 - Clackamas County Fairgrounds
Greetings and thank you for the opportunity to meet with a great group of people. Every one must eat – so in that sense, we’re all involved with agriculture. But so many today have so little knowledge of the significance of our producers.
They care for the soil and water. They manage over 17 million acres of private lands in Oregon. They create real wealth all through the state by purchasing over $3.4 billion worth of seeds, fuel, equipment, materials, employee services, transportation, warehousing, and much more. They produce the fresh fruits and vegetables and the raw products that go into so many things we see on the grocery store shelves.
Oregon has over 40,000 farms that support over 65,000 households -- 24,000 of these are women operators (37% of the total). More than 35,000 are single family or individual proprietor operations. 2,000 are family partnerships. Another 2,000 are family corporations. Very few farms in Oregon – about 1,000 or nearly 3% -- are non-family corporations. Farming is indeed a family-affair in Oregon.
Most of our farms have less than 4 employees, and most gross less than $50,000 per year. More than 70% of farms and ranches in Oregon fit in this category. They produce less than 20% of the total output in terms of sales, but they manage much of the natural resource base and provide important niche markets and fresh products to many of Oregon’s citizens, restaurants, and other venues.
It is also important to understand that fully 80% of Oregon agricultural production is shipped out of the state and about half of that (or 40% of production) goes overseas. Agricultural products are Oregon’s second largest export by value and the largest by volume. Oregonians simply can’t consumer all the products we produce here. Agricultural products that we export bring in new wealth to the state – this is a traded-sector that builds on our natural capacities and comparative advantages.
But I strongly believe there are opportunities for Oregon producers without regard to size of operation. Oregon’s diverse micro-climates lend themselves to the production of over 200 different commodities, although very few on a large scale. We live in a state where the climate, the geography, and the diversity of soils support all types of agriculture – a truly unique situation. I will talk more about these ideas in a moment.
But first, a bit more about the big picture –
Everywhere I go I talk about the importance of agriculture to Oregon’s economy and ecology of this state. Along with the efforts of many others, the profile of agriculture is increasing. This is good news. Five years ago, agriculture was identified as a dying industry by many urban economists who felt that high tech would drive the state forever more.
High tech is an important piece of Oregon’s economy, but it can’t be the only egg in the basket, to use an agricultural metaphor. When we add up the farmgate production value, the food processing industry contributions, warehousing, transportation, marketing and related sectors, the agriculture industry is the second largest industry in the state behind high tech – adding more than $8 billion in economic activity to the gross state product.
We have a governor who is supportive of this industry. All three trade missions he has taken thus far have been agriculture related. While not an expert about the industry, he understands the economic significance and has been very accessible and attentive to concerns we have raised.
So, what can ODA and state government do to assist the agriculture, food processing, and related industries – like those who use our products in restaurants?
We don’t have money to hand out, but we can help in many ways.
- I want to start by stating that the department is an advocate for industry at all levels. My staff and I are constantly involved with meetings and conferences and discussions where decisions are being made that affect the industry. We work to ensure the impacts on agriculture are understood and that agriculture is represented and heard. We consult with agricultural groups on policy issues and critical legislative issues. I take this role very seriously, and believe that the department constantly – day in and day out – is telling agriculture’s story and working to ensure it remains a viable part of our state.
- Second, we do everything within our power and resources to further the economic development of the industry. We have a marketing and economic development division with the specific charge of working with producers, value-added food businesses, and other interested partners on business plan development, product development, and expanding markets for our agricultural products. We connect potential buyers with Oregon producers and processors. We profile agricultural products overseas and domestically, and work with our suppliers to open new markets through trade shows and on-site tours with in-bound buyers.
- The department assists in the development of farmers’ markets and related direct marketing opportunities, including the administration of Senior Nutrition and WIC coupons that assist low-income seniors and pregnant or nursing mothers in obtaining fresh fruits and vegetables directly from growers. The senior coupon program resulted in nearly $1 million in sales last year.
- Oregon ranks tenth in the U.S. for direct sales to consumers, restaurants, or other markets. Oregon boasts 67 farmers markets that served an average 90,000 consumers per week throughout the season, with estimated sales of $20 million. Nearly 100 farm roadside stands operate around the state selling directly to consumers. Five Oregon counties, including Clackamas, Multnomah and Washington, are ranked in the top 100 counties nationally for farm direct sales. With the consolidation in the wholesale and retail food sectors, producers are finding fewer outlets and more of them are marketing directly to consumers. This direct link between growers and buyers helps bridge that sometimes cavernous, urban/rural divide.
- Oregon producers and processors are also increasingly selling product on the internet. Nationally, internet grocery shopping almost doubled from 2000 to 2002, with about 10% of consumers doing some amount of buying online. Oregon producers and processors are taking note and marketing to internet savvy buyers.
- Another niche market, perhaps 10% of the public, buy their food based on preferences surrounding how food is produced, whether it be “sustainable,” “organic,” “natural,” “humane” or some other practice. Some producers and processors are targeting these markets and finding success with buyers willing to pay higher prices. A key to success in these markets is “certification” – showing that the claims about the product are real. The department has established a program that certifies good ag practices at the farm level and good handling practices for packers that focuses on safe production and handling processes and traceability. These are voluntary programs that assist wholesale and retail buyers in knowing where the food is from and assurances about food safety. Other programs exist for other niche markets as mentioned.
- Our department has administered the organic-certification cost-share program that reimburses growers up to 50% of the cost, capped at $500 payment, of becoming certified. About 220 growers have taken advantage of this over the past year. (These are USDA funds.)
- The department has also administered over $3 million in federal specialty crop grant funds over the past 2 years, and many of the grant awards went to projects that supported local growers in niche markets or in developing new value-added products.
I really appreciate and get excited about the partnerships here in Oregon between growers and chefs. This is a great “connection.” It highlights the commitment of both parties to the high quality of product and service that is helping this be a success.
There are so many interesting and unique venues and products around the state that I see endless opportunities for agri-tourism and culinary tourism. I think we’ve just scratched the surface in these areas.
Now, I want to note a sobering fact that you should all be aware of because it will have bearing on the future of local production, particularly in the areas around metropolitan cities with land use pressures.
In the next 20 years 75% of farmland in Oregon will change hands as Oregon’s aging farmers retire. Tax laws, development pressures, and the general economic climate will influence how many young farmers enter agriculture in Oregon and the characteristics of these farms. It is imperative that we assist in the creation of viable economic options to keep these lands in agricultural production.
- Agricultural land cannot be viewed as an idle resource waiting for conversion to a “bricks and mortar factory” or homes. These lands and associated infrastructure are an integral and existing economic business already.
- These lands generate thousands of jobs and on-going investment throughout the state.
- These lands are not static in how they are managed. Farmers adapt to changing market structures, grow different commodities when possible (witness the expanding wine industry), adopt new technologies and best management practices that provide conservation, environmental and economic benefits, and beautify the Oregon landscape for all of us.
- The vistas we have in Oregon, the beauty that is Oregon, owes in no small measure to the agricultural community that protects the land and feeds our people.
- Agricultural lands present the resources for renewable energy that can make Oregonas a whole more sustainable.
Today’s challenges of a global economy, consolidation of markets and buyers, higher costs, and increased consumer expectations require both of this department and the industry at large, a new approach to doing business.
It requires flexibility; adaptation to changes; innovation in products and strategies; new partnerships; a commitment to research and development; adoption of new technologies; a keen eye on consumer trends; and attention to natural resource conditions.
What’s Ahead? What kind of opportunities do I see now and in the future?
- I see new opportunities in renewable energy and bio-based products. Farmers and ranchers manage more than 17 million acres of private property in which wind power, solar power, micro-hydro, bio-mass and oil-seed crop projects can be implemented. The governor will be moving forward on a renewable energy strategy in the near future. If you would like a copy of the draft plan, please contact my office.
- I see new meat and other processing facilities in the not-too-distant future. Oregon has no major meat processing facility and I believe we are getting closer to a medium-sized facility that will greatly help Oregon’s economy and Oregon’s cattle producers.
- I see new certification programs tailored to niche markets that assist growers in serving specific consumers, including organic, sustainable, food safety-related, traceback, and so on.
- I see new food products developed for ethnic demands and tastes as consumer purchasing power changes. 30 of the U.S.’s 100 largest cities now have a “minority” as the “majority” population. Increasing numbers of ethnic groups are seeking foods that fit their culture and tastes.
- I see new ways of using our resource base to generate additional income for producers. I see more opportunities in farm-based recreation and agri-tourism, and culinary tourism.
- I see new partnerships between growers and conservation interests that benefit both. I believe the conservation security programs in the 2002 Farm Bill will present new opportunities for some growers.
- I see more opportunities in direct marketing. The internet has opened new outlets for market savvy producers of specialty products.
- I see more emphasis on sustainability and development of marketing programs that highlight Oregon’s leadership in this area.
- I see adoption of technologies that streamline production and processing.
- I see the introduction of new crops, and perhaps even the shifting away from some commodities we have traditionally produced here.
I see a vibrant, but perhaps somewhat different agricultural industry than exists today. These and other developments are already underway. Change is accelerating. These are exciting times that require quick thinking and acute judgment.
Oregon has many advantages in spite of higher costs constraints –
We have a diversity of crops and production regions.
- A reputation of quality products.
- A recognized effort of sustainable production and resource management.
- Aggressive marketing programs.
- The Food Innovation Center to assist with product development and consumer testing.
- Major port facilities.
- A land use system and “right to farm” laws that help minimize conflicts with non-farm residents.
Economic activity at all levels is important to this state. ODA works with producers and value-added processors of all sizes and types of business arrangements. We will continue to assist in any way we are able.
I am optimistic about the future of agriculture in our state.
ODA will be doing all we can to assist the industry. But it is the ingenuity and dedication and commitment and innovation of growers and interested partners like you working together that will maintain the viability of this industry.
I commend all of you for your daily efforts in managing the natural resource base and bringing food, fiber, and plant materials to the world.
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