Value Chains: What, Why, and How?
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Rooting Wealth that Sticks! Little Rock, Arkansas October, 2013 Introduce The Deep South Wealth Creation Network Provide a brief overview of the Value Chains & Forms of Wealth Provide an Overview of the Alabama/ Mississippi Value Chain Project Alabama Sustainable Agriculture Children’s Defense Fund Network (ASAN) Mississippi Action for Community National Wildlife Federation Education Perry County Center for Economic Development Quitman County Development Organization The Cottage House Southern Rural Black Women’s The United Christian Community Initiative Association Winston County Cooperative Alabama Partners Mileston Cooperative Tougaloo College Funding Partners Mississippi Partners • Ford Foundation • Yellow Wood Associates Supporting Partners • Center for Rural Entrepreneurship • McIntosh SEED • Rural Support Partners DEEP SOUTH WEALTH CREATION NETWORK Rural Mississippi: 25.8% Apathy Low Education Rates Rural Alabama: 21.8% Low Ranking on the Human 2010. USDA Economic Research Service Development Index Limited History of Entrenched Poverty Collaboration Systemic Racism Systemic racism - still prevalent in many formal systems, institutions, Exodus of Youth and policies – is the underlying cause of many of these issues. It continues Depopulation to hinder economic development efforts in the Deep South. Accompanying Issues . Source Mississippi Alabama USDA African African Total Total 2007 Census of Agriculture American American Total # of Farms 41,959 5,409 48,753 2,789 Average Farm Size 273 acres 113 acres 185 acres 105 acres % of Farms that earn less than 53% 56% 46% 53% $2,500 in annual sales Nationwide, 1.3% of farm operators in the US are African-American ̶ specifically, 32,938 African-American operated farms. Mississippi and Alabama are home to 25% of these farms. “Land Rich but Cash Poor!” Potential Anticipated Results Minority farmers still own 1. Increase income for all substantial amounts of land farmers Many have much more capacity on the supply side 2. Increase income for low- wealth minority farmers, A robust agricultural supply chain could serve markets both inside 3. Capitalize on the increase and outside the Delta in statewide vegetable and Some minority (and many white) fruit production farmers already export crops and value-added products to 4. Improve, connect and fully corporations (e.g., Mars) utilize existing built capital If organized, producers could capture more substantial regulated 5. Increase financial capital market opportunities. within the region. Implementation Plan 1. Utilize a systems approach to economic development. Use value chains as the vehicle to generate multiple forms of wealth. 2. Assess, plan, and measure the development of value chains by focusing on increasing the eight forms of capital, local ownership and control, and low-income livelihoods ̶ the aim of WealthWorks value chains A network of businesses, non-profit organizations, and collaborating players who work together to satisfy market demand for specific products or services. Because value chains are built in response to market demand and involve clear and constant communication, they can be more responsive and innovative than traditional supply chains. Moves from isolated projects to a systems approach Provides access to larger more diverse markets Gives farmers the tools, capacities, support and connections to significantly improve their own livelihoods Provides opportunities for food & farm entrepreneurs Creates multiple forms of wealth that is locally owned, controlled and reinvested into rural communities Network Benefits Working as network helps to move us beyond single- institution or single-solution approaches Provides group members with the collective power and support necessary to deepen the impact and expand the scale of their individual efforts. Creates an opportunity for a regional network to foster collaboration and innovation to improve the livelihoods of rural people in the Deep South. The long-term development of networked value chains ̶ connecting sub-regional value chains across both states ̶ will lead to greater access to markets, as well as the sustainable supply of products. This is the Story of Land, Knowledge, Partnerships and Wealth Creation Face-to-face visit with each participating organization Face-to-Face visit with established regional non-profit grassroots organizations: ◦ Southern Echo ◦ Federation of Southern Coops ◦ Children’s Defense Fund Tour of communities Meetings with community members Meetings with local farmers McIntosh S.E.E.D. and Rural Support Partners compiled the information gained from the interviews and used it as a catalyst to formulate the implementation strategy. Research/analyze the various components of the value chain: product demand, production capacity, aggregation/ distribution infrastructure, etc. Engage, inform, & connect value chain stakeholders Discover connections, common visions and possible ways project groups can work together Develop individual & collective action plans Strengthen our skills, knowledge & capacities Document tools & lessons to help other groups working to construct value chains 16 Assessing Processing, Aggregation, and Distribution (PAD) Customer Demand Production Who are potential buyers? Consumers? Access to capital? What product(s) do the buyers want to buy? Current production capacity? What are the cost factors? Farm plans? Certification requirements? Grading? Labor needs? Liability? Access to land? Environmental impact? Soil samples? EPA? Storage capacity? Bidding Process Transportation? Processing Aggregation and Distribution What facilities already exist? Location? Producers pay system? Produce procurement? Infrastructure: Existing and needed? Cooling systems? On-site/Facility? What produce can be field processed and what needs to be facility processed? Value Chain Hotspot #1: Southeast Alabama Project Partners: Cottage House and ASAN Counties in Hot Spot: • Macon: 127 farms,17,313 acres • Lowndes: 134 farms, 22,342 acres • Coffee, Geneva, Houston, Henry, Barbour, Bullock, Montgomery, Lee, Autauga Potential Markets and Buyers Include: Schools & Universities Wholesale Buyers Direct to Consumer • Wallace Community College • Dixie - Eufaula AL • Cottage House Youth Market • Piggly Wiggly – Clayton AL • Tuskegee University • Food Warehouse / Super Save – Ozark AL • Clayton Farmers Market • Barbour County city and • Tiger Food • public schools • Calhoun Foods Clio Senior Market • Food Depot • Autauga producers in • Eufaula Farmers Market • Food Outlet discussion with Alabama State University • Grocery Outlet • School Road Side Stand • Save-a-Lot • Browntown producers in • Hometown Grocery • Fairview market discussion with Montgomery • Walmart public school district • C.H. Robinson • Cracker Barrel • Piccadilly • The Fresh Market – Montgomery AL: peaches, berries, collards, and kale. Value Chain Hotspot #2: West Alabama and East Mississippi Project Partners: TUCCA, NWF, Winston County Self-Help Group Counties in Hot Spot: West Alabama Counties East Mississippi Counties: • Green: 118 farms, 24680 acres • Noxubee: 127 farms, 11,185 acres • Sumter: 166 farms, 26,412 acres • Kemper: 129 farms, 20,430 acres • Perry: 134 farms, 13,284 acres • Lauderdale Winston • Dallas: 170 farms, 12,941 acres • Wilcox: 155 farms, 10,200 acres • Choctaw, Marengo, Hale: 134 farms, 13,774 acres • Opportunity to move into Mobile, Baldwin and Lauderdale • Birmingham/Jefferson County in the future Potential Markets and Buyers Include: Institutions Wholesale Buyers Direct to Consumer • County/City School Systems • White Oak Pastures: farm retails, online • Highway 45 Farmers’ Market: • Universities stores, Whole Food Mobile & Baldwin Counties AL • Tallgrass Beef Company: restaurants, • Area Nursing Care Facilities • Community Supported online and retail stores Agriculture • Area Hospitals • US Wellness (international) • Fresh Market, AL • Internet Sales • In two AL counties, Child • Earth Fare, AL Nutrition Directors need a • Wholes & Halfs • Kroger, MS, supply of fresh food for more • Main Street Birmingham Project • Rainbow Natural Food Co-op, MS than 6,000 students daily. in Jefferson County, AL • City Meat in Jefferson County, AL • Wal-Mart – C.H. Robinson: organic MS blueberries & purple hull peas • Cracker Barrel and Piccadilly • Small local grocery stores Value Chain Hotspot #3: Mississippi Delta Project Partners: Children’s Defense Fund, Mileston Cooperative, and Southern Rural Black Women’s Initiative Counties in Hot Spot: • Hinds: 228 farms, 24,262 acres • Madison: 186 farms, 16,542 acres • Holmes: 198 farms, 25,310 acres • Humphreys, Washington, Bolivar, Leflore, Quitman, Coahoma, Attala, Yazoo, Sharkey Potential Markets and Buyers Include: Institutions Wholesale Buyers Direct to Consumer • Delta Health Alliance • Delta Fresh Foods • Roadside stands • Mississippi Department of • Cracker Barrel • U-Pick Education • Piccadilly • Farmers markets • Mississippi Department of Health • 14 casinos across Mississippi • Walmart - C.H. Robinson: organic • Opportunity to move produce blueberries and purple hull peas to market at the Washington County Public Schools in Greenville. Phase II: Value Chain Construction October 2012 - June 2013 Establish a regional network Develop and move value chains across the three hot spots Generate additional value chain funding & investment Develop hands-on Value Chain tools and processes Identify broader local, regional and national policies and systems that