| Speeches by ODA Director Katy Coba |
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| Micro Enterprise Institute |
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January 13, 2004
We’ve heard a lot about “e-commerce” with reference to computers and electronics. I’m a strong believer in another kind of “e-commerce” where the “e” stands for entrepreneur.
Agricultural producers and small-scale processors are entrepreneurs – they are business owners who manage employees, capital, equipment, and land in collaboration with the dynamic “live” environment of mother nature; and they assume the risk for the success or failure of their venture.
Out of approximately 1.7 million working Oregonians, about 145,000 or 8.9 percent, are self-employed in their own businesses (not incorporated). Approximately 40,000 of these are involved in agriculture, with operations varying in size from small-scale farms which sell through farmers’ markets and road-side stands, to multi-family farms that involve large-scale production, processing or packaging, and market their products worldwide.
And there about 170 self-employed home-based kitchens or bakeries who are licensed with the department.
I find it interesting that Oregon workers were more likely to be self-employed than their national counterparts. Across the United States, 6.6 percent of workers are self-employed compared to nearly 9% here in Oregon.
And in rural Oregon, over 11% of workers are self-employed (on average), but in some counties the self-employed rate is over 20%! In metro Oregon, self-employment is about 8% of all workers. It is noteworthy that every Oregon county has a greater share of self-employed individuals than the national average.
Maybe this says something about Oregonians being “dreamers”… searching for new and better ways of doing things.
I consider most agricultural enterprises to fit the definition of micro-enterprise – most 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. More than 97% of Oregon’s farms are family owned and operated, most as sole proprietors, some as partnerships and a few as family corporations.
I 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.
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. We likely won’t agree on every issue, but we do have input and a listening ear – and that is a very important thing for this industry.
What’s Ahead?
So 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 and bio-mass and oil-seed crop projects can be implemented. On January 20-21 at the Portland Convention Center there is a conference on these technologies and opportunities. I encourage you to attend to find out more.
- 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, trace-back, 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.
- 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. These new crops may include biologically engineered ones that provide specific benefits to consumers in the areas of health, medical, and nutritional areas.
I see a vibrant, but 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.
So, what can ODA and state government do to assist micro-enterprises associated with production agriculture and value-added processing and marketing?
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. These range from local land use issues, such as expansion of urban growth boundaries, to legislative issues that affect the priority lien rights of growers, to food safety, environmental concerns, economic development, and a variety of issues I will talk more about.
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 are always on the lookout for resources that may be of assistance to producers and processors. We have gathered many of these resources on our internet site and I invite you to look there if you haven’t lately.
We have a marketing and economic development division with the specific charge of working with producers and value-added food businesses 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.
Of particular interest to this group is the Food Innovation Center. The combined staff of ODA and OSU can assist in business plan review and development, evaluation of marketing ideas and opportunities, consumer taste testing, packaging design and consultation, and many more expert services. Those of you who haven’t been to the FIC in Portland need to do so – this is a unique service for producers and value-added ideas. Some of these services have a cost, others don’t. But there will be value to you simply to meet with staff there and vet your ideas and see how they might help.
The department assists in the development of farmers’ markets and related direct marketing opportunities, including the administration of senior nutrition coupons that assist low-income seniors in obtaining fresh fruits and vegetables directly from growers. The senior coupon program resulted in nearly $1 million in sales last year. Overall direct marketing in Oregon is estimated at over $20 million per year. This is a primary marketing outlet for many small and medium-scale producers and food processors.
The department provides the integral certification of products that is necessary for movement in interstate commerce and out of the country.
In the past year the department has worked with the industry and the USDA to develop the nation’s first “good handling practices” certificate program, and a Klamath Basin potato packer was the first to receive this voluntary certification that enables access to new markets. ODA is now issuing good agricultural practices certification for growers and the GHP for packers of fresh produce. These programs assist in product integrity, trace-back, and microbial/food safety assurances to buyers. Some of you may be interested in learning more about these programs.
I believe these types of voluntary, third-party certification programs will become increasingly important in the years ahead to gain market access. ODA is working with the industry to evaluate whether there is merit to a program that certifies “Oregon sustainable” products that meet specific market demands.
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.
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 anyway we are able.
I am optimistic about the future of agriculture and related processing industries 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 processors and industry people 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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