Farmers' Markets

Starting And Sustaining Farmers' Markets

• About
• Benefits
• Challenges
• Innovative Strategies and Policy Options

About

In recent years there has been a resurgence of farmers' markets that provide fresh produce and other goods to communities while also providing local farmers with a direct source of income. From 1994 to 2002, the number of farmers' markets grew almost 80 percent, with more than 3,100 in operation in 2002.

Farmers' markets can be important supplementary food sources, although they lack the wide variety and consistent selection of grocery stores. They range in size from community-based markets to large markets run by an organization and serving several thousand shoppers. Farmers' markets are usually held once a week but are occasionally more frequent. They differ from grocery stores and corner stores in that they are organized as nonprofit, community-serving entities and thus combine social and economic objectives. Their vendors need to make profits, but the markets themselves are not profit-seeking entities. At the same time, their operations cost money, so they must make enough money to cover their expenses.

Nationwide, more farmers' markets are locating in low-income communities, providing convenient access to fresh, affordable, and nutritious food. The markets can be successful, but they face the challenge of balancing customers' need for low prices with vendors' needs for fair returns.

Benefits

Provide access to fresh produce at low prices. Because of the cost savings to farmers from selling directly to consumers, farmers' markets offer prices that are often lower than those of nearby grocery stores. A survey that compared the prices of six southern California farmers' markets with nearby grocery stores found that the markets offered lower prices than grocery stores, with an average cost savings of 28 percent.56 Other studies have found farmers' markets offer savings of 10 to 18 percent compared to supermarkets.57

Less complex, less expensive, and requires less time than building a new store. Developing a farmers' market is far less complicated, time-consuming, and expensive than building a new grocery store in an underserved community.

Sustain small- and medium-sized farms. Smaller-scale farmers who face high competition from larger, industrialized agriculture can increase their viability by selling their goods at farmers' markets, where returns are generally 200-250 percent higher than what they receive from wholesalers.58

Entrepreneurial opportunities. Farmers' markets can serve as small business incubators, providing opportunities for residents to sell items such as baked goods, jams, or crafts. Vending in farmers' and other public markets requires very low start-up capital--usually less than $1,000--and may be a great pathway to upward mobility for low-income residents.59

Social and educational opportunities. Farmers' markets provide a space for interaction and learning that shoppers are not likely to find at conventional food markets--shoppers often report that they attend the markets partially for social reasons.60 Community organizations often conduct outreach or educational activities--including nutritional education--at farmers' markets.

Challenges

Start-up and operating costs. Establishing a farmers' market requires funding for initial costs, including purchasing equipment, promoting the market, and recruiting farmers to participate. The market also needs to hire a coordinator. Because of these costs, farmers' markets often require subsidies to locate in low-income communities.61

Sustainability. To be sustainable, farmers' markets need to attain sufficient scale, with enough farmers and vendors to attract customers, and enough customers to make it worthwhile for farmers to travel to the market. To be self-sustaining, participating farmers and vendors need to be able to contribute a portion of their profits to pay someone to coordinate the market's activities. One expert estimates that a market needs roughly 20 farmers to support a full-time staff person. 62

Accepting public benefits. Many farmers' markets across the country are authorized by the U.S. Department of Agriculture to accept food stamps, and often these markets depend on them as a major source of revenue. But changes in the public benefits system have made it difficult for farmers' markets to accept food stamps. The new automated system, called Electronics Benefits Transfer (EBT), allows food stamp recipients to use a plastic card to access benefits. There are benefits to the EBT card since it could increase participation in the food stamp program by making it less stigmatizing to redeem benefits. Retailers who wish to accept EBT cards, however, must obtain a point-of-sale (POS) device to process transactions. This is a barrier for farmers' markets, which lack the essential telephone service and electrical power needed to operate such POS devices.

Innovative Strategies and Policy Opportunities

Build community support.Evaluations of farmers' markets in low-income communities have shown that community organizing and support are essential to successful markets.64 In 1980, initiators of Pasadena's Certified Farmers' Market employed an explicit community-organizing model to start the market, conducting community outreach with churches and local nonprofit organizations. The market is still operating after 25 years, and organizers partially attribute its longevity to community support.65

Expand the WIC and senior farmers' market nutrition programs. The WIC Farmers' Market Nutrition Program (FMNP) was established in 1992 to provide fresh, locally-grown fruits and vegetables to WIC recipients, and to increase awareness and patronage of farmers' markets. The Senior Farmers' Market Nutrition Program (SFMNP), established in 2001, extends the program to low-income seniors. Both programs provide participants with coupons which they can redeem for locally grown fruits and vegetables at farmers' markets or roadside produce stands. Seniors can also use their coupons to participate in community-supported agriculture programs. The federal government provides most of the funding for these programs, but states must apply to participate and fund a portion of the administrative costs of the program.66 Over 40 states currently participate, serving over 3 million people per year.67

There is not enough funding for all of those who are eligible to participate in these programs, and funding is dependent on yearly budget processes. Continued vigilance is needed to maintain and expand these programs.
Link farmers with additional markets. Linking the farmers who sell their goods at farmers' markets in low-income communities to additional, reliable markets can increase their profit margins and improve the sustainability of the farmers' market. A number of farm-to-institution programs that connect farmers to public schools, universities, hospitals, correctional facilities, and restaurants illustrate the viability of this strategy.68

• A program run by The Ecology Center, a nonprofit organization in Berkeley, purchases produce from a local farmers' market and then transports it to a local day-care center, where staff resell it and provide nutritional education to parents as they arrive to pick up their children.69
• Compton Unified School District developed an agreement with a farmers' cooperative to stock daily salad bars in 10 elementary schools, and the district plans to extend the program to all 24 elementary schools by spring 2005.70

Disseminate farmers' market-friendly EBT systems. New wireless technology is now available that enables farmers' markets to accept EBT cards. In California, state and county agencies and community advocates are helping to pilot a wireless point-of-sale (POS) device in 17 farmers' markets with the highest food stamp redemptions by providing the equipment, waiving transaction fees for the use of the EBT cards, and conducting outreach to let recipients know where they can use their cards.71,72 The state has also provided wireless POS devices to a limited number of individual merchants and produce stand operators. The POS devices are helping to address the steep reduction in food stamp redemption volume that occurred after the transfer from paper coupons to EBT, but there are still issues that need to be addressed, such as problems with connectivity at some locations.73 States that do not currently have these programs should implement them to increase the use of EBT cards at farmers' markets and produce stands, and states piloting these types of programs should sustain and improve them.

Establish and support farmers' collaboratives. Farmers can benefit from working together. They can share the costs of cold storage facilities, transportation, and marketing, and advocate for policies that impact farmers' markets and their ability to serve low-income communities. Forty-one farmers' market associations have been established across the country that accomplish some or all of these goals. 74 Southland Farmers' Market Association (SFMA), for example, represents 22 farmers' markets and more than 400 growers in Southern California.75 One of the association's goals is to establish new markets in underserved communities; they have secured initial funding for three new markets in low-income neighborhoods in Los Angeles. The group also maintains databases to help farmers connect them with new markets, provides technical assistance on establishing new markets, advocates for the Farmers' Market Nutrition Program, and lobbies for policy changes that reduce costs for farmers to participate in markets.

Provide business development and marketing assistance to vendors. Targeted technical assistance programs can help make vending at farmers' markets more profitable for local entrepreneurs. Some programs assist urban gardeners with selling at farmers' markets. For example, Cornell Cooperative Extension's New Farmers/New Markets program trains New York City residents in fruit and vegetable production and marketing.76 Existing small business development training programs can help residents sell baked goods or non-food items at farmers' markets.