Collins Subcommittee Evaluates Benefits of Partnerships in Small Agriculture Business Development
The Small Business Subcommittee on Health and Technology, led by Rep. Chris Collins (R-NY), today conducted a field hearing in New York that examined the potential benefits of small agriculture businesses entering into partnerships and other supply arrangements with large processors and retailers, and how these arrangements may create more business opportunities for small firms.
Due to technology, changes in product processing, manufacturing, and consumer demand, America’s agriculture sector has changed over recent decades, and small agriculture businesses are facing new challenges. Many agriculture producers have sought to specialize in the production of one or more commodities to meet the needs of their processing and retailing customers. Demand for local produce and organic produce have created a new market for many small producers, as well. Arrangements and partnerships between small and large agriculture companies have allowed small producers to continue to grow and remain profitable.
“National Small Business Week is an appropriate time to evaluate how small businesses are faring within various economic sectors in America,” said Chairman Collins. “Agriculture innovation has changed food production for the better, but it is important for small businesses to remain aware of the changing market.
“Farming and ranching will always be a risky enterprise for small producers, but contracting for distribution, processing and other supply arrangements are an important means of helping small farms and ranches minimize these risks, while expanding their market opportunities. Doing so has also improved their ability to obtain operating and expansion capital from lenders, it has given them greater access to a larger geographic area, and the income security of partnerships has given smaller farms the flexibility to innovate and find niche markets. Today’s hearing provided a valuable dialogue on the many benefits of business relationships within the agriculture sector.”
Materials from the hearing are available on the Committee's website HERE.
Ray Schueth, Director of Agriculture for Eastern Operations for Seneca Foods Inc. in Janesville, Wisconsin said, "These producer relationships are absolutely essential to our ability to secure the needed produce for canning and freezing. The number of acres contracted with each producer may be as small as a few acres of peaches or pears under multiple-year contracts in Washington and California to in excess of 1000 acres of peas, sweet corn, green beans or any of the other fruit and vegetable crops that we process in the Midwest and New York.”
Joe Weber, Vice President of Mike Weber Greenhouses in Seneca, New York said, “Wegmans has a strong brand, an excellent reputation and a tremendous commitment to food safety and their customers. Our herbs enter through their produce department where they require all of their produce suppliers – even the smallest -- to be certified to the U.S. Department of Agriculture’s Good Agricultural Practice (GAP) standards. We are good at growing plants and not nearly as experienced with government red tape. This certification would be very difficult for us to accomplish without Wegmans’ help.
“…that is the value of a partnership between small and larger businesses – consumers get a unique, quality product that a small, local business can offer; and the large business can help distribute the product to customers over a geographic area and volume that we could never duplicate.”
Linda Hamilton, Triple H Farm in Leicester, New York, testifying on behalf of the NY Farm Bureau, said, “Processing vegetables for the consumer market is not something that our small business could do on our own. The huge investment in processing equipment and marketing costs alone are not something a farm of our size could profitably take on. So we are integrally dependent on the processing companies, as much as they are dependent on the quality product that we deliver to their doors.”