February 21, 2018
By Andrew Dumont, Senior Community Development Analyst, Federal Reserve Board, Washington, DC
In recent years, consumer demand for regional food—food produced, processed, distributed, and consumed all in the same region—has been on the rise. In 2015, the Federal Reserve Board, Federal Reserve Bank of St. Louis, and the U.S. Department of Agriculture agreed to partner on an effort to better understand these trends and the financial infrastructure necessary to support businesses seeking to take advantage of the opportunities arising in the regional food sector. The result of that partnership was a publication released during the summer of 2017 titled Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities.
Harvesting Opportunity is a compilation of research, essays, and reports by community development experts around the country. Through this collaborative research effort we learned several important lessons about what works to strengthen regional food systems and, through those investments, improve the economic resiliency and vitality of households and communities, including low-income, underserved, rural, and other economically challenged communities.
First, we learned that appropriately tailored investments in regional food systems have the potential to support the creation of new jobs and small businesses in local communities, as well as to improve farm profitability and financial resilience. Indeed, research has shown that fruit and vegetable farms with gross annual revenue under $350,000 that sell in regional markets are more likely to earn positive net farm income and have lower operating expense ratios than similar farms that do not sell in regional markets.
Second, we learned that in order to take advantage of new business opportunities in the regional food sector, entrepreneurs need access to capital, specialized knowledge, and general business skills. Unfortunately, one or more of these critical elements is often missing from historically marginalized communities. Importantly, we also learned that organizations across the country are filling these gaps and empowering communities to take advantage of regional food sector opportunities. As a result of taking an intentional focus on equity and inclusion, these community organizations are creating new access to economic opportunity for parts of their communities that have often faced challenges, such as people of color, recent immigrants, the formerly homeless, and the previously incarcerated.
Lastly, we learned that no organization has all of the resources or expertise necessary to effectively carry out this work alone. As such, long-term partnerships and collaboration are necessary for success when implementing regional food strategies. These partnerships are important not just among the financial institutions that fund regional food enterprises and the technical assistance providers that help them navigate the marketplace, but also among the regional food enterprises themselves.
Examples of organizations advancing this important work, and that embody this spirit of collaboration, are highlighted throughout Harvesting Opportunity. It is our hope that highlighting these promising models will further efforts to provide meaningful earnings and job opportunities for low- and moderate-income and other economically struggling communities.
The Federal Reserve Board’s community development function promotes economic growth and financial stability for lower-income communities and individuals by convening stakeholders to identify key challenges and promising practices, conducting and sharing related research, and identifying emerging economic and financial conditions affecting lower-income communities. To learn more you can go to https://www.federalreserve.gov/aboutthefed.htm or contact the author, Andrew Dumont, at Andrew.email@example.com.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of The Healthy Food Access Portal.