A Report on the Feasibility of Establishing A Local Foods Aggregation, Sales and Marketing

Center in Yancey County, North Carolina

Prepared forYancey County Cooperative Extension Service

10 Orchard DriveBurnsville, NC 28714

By

Smithson Mills, Inc.34 West Oakview Road

Asheville, NC 28806

March 2012

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This research was funded through the generous support of the following:

Yancey County GovernmentMitchell County GovernmentMayland Community College

The Z. Smith Reynolds FoundationYancey County EDC

Yancey County Cooperative ExtensionMayland College Small Business Center

Carolina Farm Credit Yancey CountyYancey County Extension and Community Association

Yancey County Farm BureauNCSU Agricultural Foundation

Mitchell County Cooperative ExtensionJim Edwards

Bennie RiddleBeverly HillsBilly Bryant

Mark LangnerAdam McCurryJames Magner

The following researchers contributed to the development of this report:

David Harper, Land In Common

Michael McDonald, Research Associate Smithson Mills, Inc.

Smithson Mills, President Smithson Mills, Inc.

John Hou, Mechanical EngineerComputer Assisted Design

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Table of ContentsExecutive Summary #

Chapter 1 – Introduction #

Chapter 2 - Regional Agricultural Profiles: Yancey and Mitchell #

Chapter 3 - Regional Farmer Participation Survey: Yancey and Mitchell #

Chapter 4 - Yancey County Consumer Participation Survey #

Chapter 5 - Existing Facility Research #

Chapter 6 - Regional Market Research Results: Yancey and Mitchell #

Chapter 7 - Site Review #

Chapter 8 - Facility Operations #

Chapter 9 - Regulatory Issues #

Chapter 10 - Budgets #

Chapter 11 - Legal Incorporation #

Chapter 12 - Marketing a Local Food Movement #

Chapter 13 - Future Funding #

Chapter 14 - Conclusions and Next Steps #

Appendix A – GAP Assistance LetterAppendix B – GAP Self AssessmentAppendix C – GAP Request for Audit Services Appendix D – GAP ApplicationAppendix E – GAP Authorization Appendix F – Facility Availability Form Appendix G – TRACTOR Articles of Incorporation Appendix H – TRACTOR Bylaws

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Executive Summary

In August 2010, Smithson Mills Inc. was contracted with Yancey County to perform a feasibility study for establishing a local foods aggregation and sales and marketing center. The purposes of the research were to:

Measure demand for a local foods marketing program from farmers, consumers, and retail intermediaries;

Determine suitable locations for development of the project; Provide recommendations for necessary infrastructure, layout, budgeting and legal

establishment; Make recommendations for sorting and packaging equipment acquisition and installation; Develop actionable budgets, management plans, sales goals, and a plan for long-term

sustainability.

According to the 2007 Census of Agriculture, Yancey County has a total of 447 farms on 33,431 acres. Of this, there are 44 farms harvesting 128 acres of vegetables for sale. Yancey County also has 9 farms in orchards on 23 acres. Mitchell County has 24 farms on a total of 55 acres harvesting vegetables for sale. Of these 24 farms, 23 of them are less than five acres. Mitchell County also has 13 farms in orchards on 71 acres, with 7 orchards having less than 5 acres.

Through use of farmer participation surveys, researchers determined that there is sufficient producer demand in Yancey and Mitchell Counties to warrant further investigation into the development of an agricultural marketing, consolidation and distribution center. A total of 49 farmers from the two counties expressed positive interest in participating in consolidated sales and marketing. Researchers suggest merging project development efforts in Yancey County with similar efforts underway in Mitchell County. A study completed for Mitchell County in 2011 did not find sufficient demand in Mitchell County alone for an aggregation, sales and marketing center. Merging the two projects into a regional effort will allow for a stronger and more diverse farmer base to support project development overall.

The goal of regional market research was to learn more about perspectives on local food marketing in Yancey and Mitchell Counties, measure demand for locally grown foods, and learn more about the logistics of how buyers purchase products from a farmer distribution network. Market analysis indicates that a produce aggregation project serving the two counties should have a highly diversified strategy of sales and distribution, with income generated from direct retail sales, wholesale distribution, sales to restaurants, direct-to-store wholesale service, subscription consumer sales, and direct-to-institution sales. Major potential wholesale accounts include Ingles Markets, Mountain Foods, and Whole Foods.

Researchers assessed numerous properties in Burnsville and Yancey County to determine suitable locations for local farm product aggregation and distribution. A suitable facility, site of the former Yancey County tomato cooperative, was identified for project development. This 6,000 square foot space can be upfitted to accommodate washing, grading, packaging, and storing farm produce for aggregated sales and distribution.

Researchers recommend legal establishment of the project as a nonprofit entity. The project should strive to serve all Yancey and Mitchell County growers who desire services, regardless of whether they

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participate in collaborative marketing of produce. Farm operators should be offered access to the facility on a scheduled basis and be offered technical support on post-harvest product handling, business preparedness and meeting all relevant inspection and certification requirements.

As a facility offering open access to services, the project should be willing to develop new marketing channels in coordination with growers. While an aggregated sales and marketing service has the greatest potential for long-term success, other initiatives, such as direct sales at the facility, can help further expand market access and provide needed revenues for facility operations. Similarly, seasonal promotions and the development of Community-Supported Agriculture (CSA) also may be supported, depending upon the business interests of participants. Direct retail and CSAs offer the greatest opportunity for the project to sell local produce at higher margins. Diversified revenue streams will prevent the project from becoming overly dependent on one or two large accounts. Experimentation with different levels of pricing for different markets will allow project leaders to develop a mix of sales volumes and gross margins, and may lessen the project cash flow burden on large wholesale accounts, which will have higher volumes but lower per-unit profit margins.

There are two essential principles for serving farmers through an operating a sales and distribution business that has as its key goal serving farmers: transparency and communication. Transparency is a commitment to let growers know exactly what the project is trying to achieve, who the project will be selling to, how the farmers will be paid and what margins are needed for the project to achieve self-sufficiency. Communication means having regular formal and informal contact between the project manager and the growers and between the project manager and buyers.

The facility should become certified for Good Agricultural Practices (GAP). The facility should also develop an effective Hazard Analysis of Critical Control Points (HACCP) plan.

Base operational costs for the project are estimated at $85,250 per year, of which $30,000 is for facility rent and $25,000 is for a general manager working on a seasonal contract basis. The remaining costs of operation include utilities, part-time labor, supplies, servicing equipment, and other miscellaneous costs.

By year three, most core operating expenses for project management, labor, accounting, travel and lease of a refrigerated truck should be covered by proceeds from sales, sponsorships, and fundraisers. By the third year of operations, the project should achieve wholesale sales of $125,000, as well as sales of $20,000 from a community supported agriculture program and retail sales of $10,000.

During the course of the feasibility study, a working group was convened that decided upon the name Toe River Aggregation Center and Training Organization Regional (TRACTOR) for the legal entity. TRACTOR received notice of its legal incorporation as a non-profit by the Secretary of State of North Carolina on December 15, 2011.

A key strategy in making TRACTOR successful is marketing the concept of local foods to consumers in Yancey and Mitchell Counties. Marketing, however, should be understood as distinct from sales activities; the goal of marketing is to establish long-term product identification and the association of

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TRACTOR with concepts of freshness, quality, locality and sustainability. Within two years, TRACTOR should have name and brand identification among a high percentage of food shoppers in the area. Cross marketing opportunities with other aggregation projects in the region should also be investigated.

Researchers recommend TRACTOR secure all operational costs for a 2 to 3 year period to achieve self sufficiency without eating into project revenues. The following are available resources for potential future funding of a local produce aggregation, sales and processing center. They include state, federal, and private foundation grant resources and alternative funding methods.

CHAPTER 1 - Introduction

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In August 2010, Smithson Mills Inc. was contracted with Yancey County to perform a feasibility study for establishing a local foods aggregation and sales and marketing center. The purposes of the research were to measure demand for local foods marketing from farmers, consumers, and retail intermediaries; determine suitable locations for development of the project; provide recommendations for necessary infrastructure, layout, budgeting and legal establishment; make recommendations for facility construction, renovation and/or upfit; and make recommendations for sorting and packaging equipment acquisition and installation. In order to fulfill contracted service obligations, research was conducted for the following deliverables:

Demographic analysis of Yancey County and the Asheville Metropolitan Statistical Area; Measurement of producer demand for a local food aggregation and marketing service; Measurement of consumer demand for improved supplies of locally grown foods; Analysis of market opportunities for sales of local foods through wholesale distribution,

community-supported agriculture subscriptions, direct-market sales, internet-based sales, and wholesale supplies to area supermarkets;

Regulatory analysis for Good Agricultural Practices (GAP), HACCP, FDA and USDA inspection; Site selection for a local foods aggregation center with discussion of viable available sites in and

near Burnsville.

Researchers took a brief hiatus from research in 2011. During this time the project principals worked on securing a suitable physical location for the aggregation center. Research proceeded once the final site decision was made. The following deliverables were then completed:

Develop floor plans and renovation budgets to accommodate bulk food handling, processing, and storage;

Identify and price equipment needed for produce handling, including washing, grading, cold storage and packaging;

Develop a pro-forma operations budget for a three to five year period, with a sustainability plan for achieving current-account break-even;

Determine suitable legal establishment options for a business aggregating and marketing locally grown foods in Yancey County;

Develop a funding strategy and proceed with securing funds for project implementation.

Sufficient demand was found to exist from farm-based producers for participation in a local foods aggregation and marketing program;

Sufficient community support was found to exist for a project of this nature to be supported by local leaders and the community at large;

Market opportunities for local foods continue to grow. A consolidated aggregation and marketing project may generate sales and additional income for area farmers through a diversified marketing strategy that includes direct sales to consumers, subscription sales through a community-supported

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agriculture (CSA) program, wholesale distribution to area supermarkets and distributors, and online marketing services;

Available sites were identified in Burnsville and surrounding areas to accommodate a local foods aggregation facility. Key positive factors for site selection included suitable floor space of 2,000 square feet or more, a central location and ease of access, commercial grade utilities including water, sewer, and 3-phase power, potential retail location, affordability, and possibility of co-location with support services including Yancey County Extension;

Researchers visited a variety of different site locations in Burnsville and surrounding Yancey County. Necessary criteria for the facility include, but are not limited to: location, size of parcel, square footage of facility, availability of commercial grade utilities, cost of purchase and upfit, and proximity to support services such as Cooperative Extension. Researchers, in consultation with project participants, ultimately decided on the portion of the former Tomato Coop building owned by Mr. Sam Young as the best location for this facility;

Researchers have developed floor plan designs in CAD to indicate the potential locations and orientation of necessary equipment, including three hand sinks, a 10’ x 10’ forced air cooler, a 20’ x 10’ walk-in cooler, a 10’ x 10’ walk-in cooler, and two 16-18’ produce wash lines. The CAD drawing, representative site location images and pricing estimates for equipment and non-fixed asset improvements can be found in Chapter 7: Site Review. Necessary fixed asset improvements for renovation and upfit of the facility can be found there also;

A pro-forma operations budget has been created to reflect the project’s needs over a three year period to achieve current account break even. This budget reflects facility operations needs as well as fixed- and non-fixed asset improvements critical to success of the facility;

Suitable legal establishment comes in many forms. For a business aggregating and marketing locally grown foods, several different but important forms of organization were considered. In consideration of this facility, a producer non-profit corporation is the specific type recommended for development. The aggregation facility received notice of its legal incorporation as a non-profit by the Secretary of State of North Carolina on December 15, 2011. Following adoption of bylaws, researchers recommend pursuing federal designation as a federal non-profit entity. The application form may be found at the following link: http://www.irs.gov/pub/irs-pdf/f1023.pdf;

Researchers have developed a funding strategy for the project moving forward and recommend securing all operating costs in the first three years to achieve self-sufficiency without eating into project revenues. The project has begun implementation for support during this ramp-up phase. Grant funds have been secured from the North Carolina Rural Economic Development Center, the Z. Smith Reynolds Foundation, the Golden LEAF Foundation and NC Department of Agriculture and Consumer Sciences; Further financial consideration has been provided by the county. Recommendations for additional future funding are made at the private foundation, state and federal levels;

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David Harper from Land in Common completed a complementary research study in Mitchell County in March 2011 for development of an aggregation facility. His research concluded that there was insufficient demand for development of such a facility in Mitchell County. However, there was opportunity to dovetail his research with the research performed in Yancey County, with the focus on developing a regional produce aggregation facility serving farmers in both counties and the region at large.

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CHAPTER 2 – Regional Agricultural Profiles: Yancey and Mitchell

Yancey County Agricultural Profile

Formed in 1833, Yancey County is a rural county located in the northwest part of the state. It is not a part of any Metropolitan Statistical Area (MSA), but is immediately adjacent to Buncombe and Madison Counties that are a part of the Asheville MSA. According to the U.S. Census Bureau, the county has a total area of 313 square miles. It has 11 townships: Brush Creek, Burnsville, Cane River, Crabtree, Egypt, Green Mountain, Jacks Creeks, Pensacola, Prices Creek, Ramseytown, and South Toe. With a 2010 population of 17,818, the demographics of Yancey County show many typical characteristics of a rural community located within the Appalachian Mountains region of Western North Carolina.

Yancey sits along the northern North Carolina border with Tennessee. In North Carolina, Yancey is bordered by Madison County to the west, Mitchell County to the east, McDowell County to the southeast and Buncombe County to the south. Of the adjacent counties, only Buncombe is considered to be an urban county. The county is largely situated in the Toe River Valley, an region known for its outdoor recreation and scenic views. The highest point in Yancey County, and the highest point east of the Mississippi River, is Mount Mitchell in the Black Mountain range, rising to 6,684 feet above sea level.

Buncombe County, where Asheville is located, has a population that is more affluent, younger, more diverse and more educated than that of Yancey County. The North Carolina Department of Commerce has designated Yancey as a Tier One County, placing it among the 40 most economically distressed counties in the state. By comparison, Buncombe County is designated in Tier Three, among the 20 wealthiest counties in the state. The chart below shows the wide disparities in population, income and education between the two counties:

County Profiles: Yancey and Buncombe Counties1

Population Yancey BuncombeMedian Age 41.9 38.9Percent Black 0.6% 7.5%Percent Born in NC 75.4% 60.6%Percent 65 and over 18.2% 15.4%Percent White 98.0% 89.1%Population 2000 17,774 206,330Population 2008 18,503 229,047Population Density 2000 57 314Income and Poverty Yancey BuncombeChild Poverty Rate 22.1% 15.3%Elderly Poverty Rate 16.3% 9.8%Median Household Income 2000 $29,674 $36,666Per Capita Income 2000 $16,335 $20,384Poverty Rate 2000 15.8% 11.4%Education Yancey BuncombePercent with Bachelor's Degree or Higher 13.1% 25.3%Percent with High School Diploma 36.9% 28.3%

1 Source: NC Rural Center Economic Database

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Percent with Less Than High School Education 28.9% 18.1%Labor Force and Employment Yancey Buncombe

Unemployment Rate Feb 2011 12.8% 8.1%

Agriculture and Natural Resources Yancey BuncombeTotal Agricultural Receipts $5,173,000 $37,241,000

Yancey ranks 93rd in the state in agricultural cash receipts, with a 2007 total of just over $7 million. It had 447 farms, a decline of 28% from 2002, and 33,431 acres of farmland, a decline of 14% from 2002. The average farm size is 75 acres. As with many rural counties in North Carolina, livestock production accounts for a large portion of agricultural activity. However, Yancey ranks 86th in the state in poultry and egg production and 51st in cattle production. The $1,958,000 in livestock, dairy and poultry receipts account for 38% of Yancey County’s agriculture production. The county also has a well-established, larger crop production, with 4,875 acres of land in crops according to the 2007 Census of Agriculture. It ranked 62nd in the state for tobacco production, and went from 255 tobacco farms to 28 in the five years from 2002 to 2007; tobacco income on these farms declined 89%. According to the 2007 Census of Agriculture, Yancey County has 44 farms harvesting $323,000 worth of vegetables, potatoes and melons.

Evidence from farmer interviews and discussions with agricultural service providers indicates that only a few Yancey County farms grow specialty crops for targeted local distribution, although u-pick and other direct marketing at farmers’ markets and roadside stands are popular among smaller farms. Those farms that do grow specialty crops, such as tomatoes, tend to grow larger quantities for larger brokers based outside of Yancey County. Often, varieties grown for national or regional distribution chains do not have the characteristics of flavor and quality that are expected by many consumers seeking local food.

Statistics from the 2007 Census of Agriculture show Yancey County’s agricultural economy:

2007 Census Data

Number of Farms 447

Total Land in Farms, Acres 33,431

Average Farm Size, Acres 75

Harvested Cropland, Acres 4,875

Average Age of Farmers 57.3

Average Value of Farm & Building $364,053

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Average Market Value of Machinery & Equipment $33,914

Average Total Farm Production Expense $11,843

Crops 2007Harvest Acres Yield State Rank

Barley: Bu. - - -

Corn for Grain: Bu. 7 45 91

Corn for Silage: Tons 82 1,305 59

Hay, All: Tons (2008) (D) (D) (D)

Soybeans: Bu. - - -

Tobacco: (1,000#). 134 1,757 65

Wheat: Bu. - - -

Livestock NumberState Rank

Broilers Produced (2007) - -

Cattle, All (Jan 1, 2009) 6,100 48

Beef Cows (Jan1, 2009) 2,300 50

Chickens, Excluding Broilers (2007) 705 73

Hogs and Pigs (2007) - -

Cash Receipts: 2008 DollarsState Rank

Livestock, Dairy, and Poultry 2,404,000 85

Crops 3,966,000 92

Government Payments 949,517 75

Total 7,319,517 93

Yancey County’s geographical location in relation to the larger urban Buncombe County indicates an opportunity to capitalize on the existing agricultural strengths of the county to serve a larger and relatively wealthier population, particularly in the city of Asheville and Buncombe County. Burnsville, the Yancey County seat, is located in the middle of Yancey County, just 36 miles from downtown Asheville. The map below shows Burnsville to the northeast of Asheville and connected to the city by U.S. Hwy. 19/23. The regional demand for local foods is on the rise: in and around Asheville, locally grown foods

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can be found in most chain grocery stores; restaurants utilize and advertise the use of local products; and non-profits and government entities promote the purchase of local foods. Many of Asheville’s top chefs visit farmers markets regularly and/or have a working relationship with local growers.

Compared to other urban environments in the state, Buncombe County, and Asheville in particular, supports local agriculture. A web-based search for businesses providing local foods in Yancey County indicates few farms and farmers markets providing local foods and no restaurants, co-ops, wholesale, or grocery stores. The website localharvest.org lists 8 businesses providing local foods: Yancey County Farmers Market, Appalachian Seeds Farm and Nursery, Bee Log Farm and Nursery, Bee Log Garlic and Flower Farm, Mountain Farm, The Mushroom Hut at Fox Farms, Green Toe Ground Farm, and Firefly Farm. In comparison, a search of other cities on the same website shows 20 similar businesses in Greensboro, 31 in Raleigh, 47 in Chapel Hill and 52 in Asheville.

The Yancey County region can benefit from its proximity to the city of Asheville, a city that has made much headway into building local food communities. The goal is to create a more sustainable local food economy to provide fresh and healthy food choices as well as supporting local farmers in the region. The region and its citizens share many of the characteristics important for successful local food distribution: relatively high incomes, high education levels, and a strong agricultural tradition on the outskirts of a larger population area. While there are many people already operating food businesses in the region, other companies and farms have the opportunity to establish themselves in this competitive market environment.

Yancey County Production BaseAccording to the 2007 Census of Agriculture, Yancey County has a total of 447 farms on 33,431 acres. Of this, there are 44 farms harvesting 128 acres of vegetables for sale. Yancey County also has 9 farms in orchards on 23 acres. In addition, research determined the total number of potential arable acres in Yancey County given suitable markets is between 324 and 328 more. Researchers’ survey of agricultural

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producers in Yancey County determined which fresh fruits and vegetable local producers had for sale in season. This helped figure the percentages of survey respondents who indicated growing specific fruits and vegetables.

Since some respondents indicated growing or raising multiple items within a given category, percentage totals may exceed 100% in some cases. Over 75% of survey respondents indicated an interest in supplying their locally grown produce to a consolidated sales and distribution organization in Yancey County. These volume outputs and responses appear to provide an adequate supply for wholesale aggregation in Yancey County. However, regional and community collaboration, as well as extension oversight and local government buy-in will remain important to its success

Yancey County Consumer BaseThe 2010 U.S. Census recorded 17,818 people in Yancey County, a slight increase from 2000 Census levels. Yancey County had a 2009 per capita income of $17,939 and the median family income in 2009 was estimated at $39,435. The unemployment rate in the county in February 2011 was 12.8%.

Regionally, Yancey County is located adjacent to the Asheville Metropolitan Statistical Area (MSA). The Asheville MSA is comprised of Buncombe, Madison, Henderson, and Haywood counties, with a combined 2009 population estimated at 412,672. Buncombe, the largest county, had an estimated population of 225,869 with a per capita income of $26,209 and a median household income of $43,750. Burnsville, the county seat of Yancey, is located approximately 36 miles from Asheville, the county seat of Buncombe and the largest city in western North Carolina.

Mitchell County Agricultural Profile – by David Harper, Land In Common

Mitchell County is a mountain community with 141,713 acres of primarily wooded land (76 percent) with a relatively high elevation, averaging 3,000 feet above sea level between a low of 1,700 feet and a high of 6,313 feet. As of 2007, farmland in the county consisted of approximately 22,787 acres (16 percent of the county) in farms, primarily pasture and hay land, with an estimated 5,000 acres in cropland. The acreage of farmland declined by over 3,000 acres in the five preceding years since 2002. The average Mitchell County farmer is 58 years of age.

As of 2007, farming in Mitchell County was an $11 million industry, with an average income of $35,000 per farm. Christmas trees have been a growing part of the agricultural sector for the past 50 years, and replaced Burley tobacco as the leading cash crop in 1996, with over 200 producers growing trees on 1,300 acres, with an estimated $4.5 million in sales (MCEDC, 2011). Burley tobacco was grown on 410 acres on 108 farms in 2002, and only 63 acres on 19 farms in 2007, a decline of over 80 percent of acres and farms in tobacco production. Tobacco income declined 85 percent from $1,037,000 in 2002 to just $155,000 in 2007. Other farm products include landscape ornamentals (the second leading cash crop), beef cattle, hay, apples, trout, vegetables (potatoes and beans), and medicinal herbs.

Importantly, food production and sales income have increased in the county since the tobacco buyout. Sales of fruits and vegetables have increased over 400 percent in the five years from 2002 to 2007. Vegetable production in the county during that period went from 7 farms growing $30,000 worth of

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vegetables on 8 acres to 24 farms growing $126,000 worth of vegetables on 53 acres. Production of fruits, tree nuts, and berries went from 3 farms growing $64,000 in value to 15 farms growing $280,000 in value.

The 2007 Agricultural Census lists 314 farms in Mitchell County, averaging 73 acres in size, down from 358 farms in 2002. The majority of farms are between 10 and 179 acres. 24 farms are between 180 and 499 acres, 5 farms are over 500 acres, and no farms are over 1,000 acres.

The average per acre market value of land and buildings is approximately $369,209 per farm, or just over $5,000 per acre. The average farm includes equipment and machinery with a market value of $40,580. The vast majority of farms, nearly half, report less than $2,500 in sales, while only 11 farms reported sales of $50,000 or more.

The top income producing commodities listed in the Agricultural Census are as follows:

Commodity Value

Farm Forestry $7,816,562

Livestock $ 952,523

Greenhouse & nursery $2,760,000

Non-farm forestry $1,022,271

Fruits & vegetables $ 330,000

Hay & other crops $ 154,000

Potatoes $ 150,000

Burley Tobacco $ 100,000

Corn $ 19,000

In 2007, Mitchell County farms reported 217 farmworkers (some migrant) on 57 farms with a payroll of $495,000.

Mitchell County Production BaseAccording to the 2007 Census of Agriculture, Mitchell County has 24 farms on a total of 55 acres harvesting vegetables for sale. Of these 24 farms, 23 of them are less than five acres. Mitchell County also has 13 farms in orchards on 71 acres, with 7 orchards having less than 5 acres. These low volume outputs do not appear to provide an adequate supply for wholesale aggregation in Mitchell County alone.

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One of Mitchell County’s assets, its natural beauty, can in some respects become a hindrance. Because of Mitchell County’s high elevation, the growing season is later and shorter than in some surrounding counties. This makes it difficult to sell into the school system, because the window of demand (August to May) does not match up well with the window of supply, which tends to be June through September. While season-extension technologies, especially hoop house and greenhouse production, can extend the harvest season, Mitchell remains at a competitive disadvantage compared to other, warmer areas. However, certain cold crops, including leafy greens and potatoes, grow well in the high elevations. Opportunities exist for production of these crops during times when other locations in the southeast are too hot and humid.

Mitchell County Consumer BaseThe 2010 U.S. Census recorded 15,579 people in Mitchell County, a slight decline from 2000 Census levels. Per capita income in 2009 was estimated at $18,522, with median household income of $33,118. The unemployment rate in the county in January 2011 was 13.2%. This low population level, along with a low per capita income and high unemployment rate, indicates that sales potential for high value locally grown foods is limited within the county. However, Mitchell County does enjoy a healthy tourism industry, and in summer and fall months the number of people residing in the county is substantially higher, with visitors tending to have higher disposable incomes than locals. In addition, the federal nutrition program Regionally, Mitchell County is located adjacent to the Asheville Metropolitan Statistical Area (MSA). The Asheville MSA is comprised of Buncombe, Madison, Henderson, and Haywood counties, with a combined 2009 population estimated at 412,672. Buncombe, the largest county, had an estimated population of 225,869 with a per capita income of $26,209 and a median household income of $43,750. Bakersville, the county seat of Mitchell, is located approximately 53 miles from Asheville, the county seat of Buncombe and the largest city in western North Carolina.

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CHAPTER 3 - Regional Farmer Participation Surveys

Researchers conducted surveys of Yancey and Mitchell County farmers to determine their levels of interest in participating in some form of local distribution network to supply local farm products, and to determine what those products could be. The surveys also served to educate farmers about the aggregation center feasibility study and Cooperative Extension’s interest in supporting the development of new markets and distribution strategies for locally-grown foods.

In the winter of 2010-2011, researchers distributed a survey to known Yancey County growers soliciting for their interest in participating in an agricultural product aggregation facility. The survey was distributed in hard copy from Yancey County Cooperative Extension and posted online and emailed to farmers. The total number of responses received in hard copy came to 36. The total number of responses received via the online survey instrument came to 5. There were 41 total responses. Since some respondents indicated growing or raising multiple items within a given category, percentage totals may exceed 100% in some cases. A farmer survey form was developed in conjunction with the Yancey County feasibility assessment, and mailed out to 250 farmers in Mitchell County. Approximately 44 of the 250 surveys were returned (a 17.6% return rate).

Yancey Farmer Participation Survey

Question 1 – Do you have an interest in supplying your locally produced food to a consolidated sales and distribution organization in Yancey County?

Yes No Maybe/Did Not Answer (DNA)26

(75.6%)1

(2.4%)2/7

(22%)

Overt interest among respondents for supplying locally produced food to a consolidated sales and distribution organization is 31/41 or 75.6%. The percentage of respondents with no interest in the project is very small at 1/41 or 2.4%. 22% of respondents were either possibly interested in the project contingent upon prices offered for their products or failed to answer the question entirely. We infer that those who indicated “Maybe” may have some relevant interest in this project.

Question 2 – Which of the following seasonal fresh fruits do/will you have available?

Apples Strawberries Blueberries Grapes Peaches6

(15%)2

(5%)4

(10%)1

(2.5%)3

(7.5 %)Blackberries Cantaloupes Pears Raspberries Watermelons

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2 (5%)

1(2.5%)

1*(2.5%)

4 (10%)

3 (7.5%)

13 out of the 40 total positive respondents, or 32.5%, responded that they had one or another seasonal fresh fruits available.

Among these 13 respondents, 46% indicated that they grow apples; 31% grow either blueberries or raspberries; 23% grow peaches or watermelons; 15% grow strawberries or blackberries; and7.7% grow grapes, cantaloupes or pears*. *= in the future.

Respondents were given the option of writing in “Other fresh fruit.” Responses in this category receiving one vote each are as follows: rhubarb and plums.

Note: many respondents indicated that they grow more than one product on their farms.

Question 3 – Which of the following seasonal fresh vegetables do/will you have available?

Summer Squash

Tomatoes (heirloom)

Sweet Corn Cabbage

Red Tomatoes

Hot Peppers Potatoes

Snap Peas Zucchini Cucumbers

11 (27.5%)

7(17.5%)

5(12.5%)

7(17.5%)

6(15%)

9 (22.5%)

14 (35%) 5(12.5%)

7(17.5%)

7(17.5%)

Green Beans Romaine

Bell Pepper Okra Broccoli Collards Shiitake Carrots

Greasy Beans

10 (25%)

7(17.5%)

12(30%)

1(2.5%)

5(12.5%)

4(10%)

3(7.5%)

5(12.5%)

1(2.5%)

23 out of the 40 total positive respondents, or 57.5%, responded that they had one or another seasonal fresh vegetables available.

Among these 23 respondents, the highest response rate came from potatoes. 61% indicated growing potatoes. This was followed in popularity by bell peppers at 52%; 48% indicated growing summer squash; 43% grow green beans; 39% grow hot peppers; 30% grow heirloom tomatoes, cabbage, zucchini, cucumbers or romaine lettuce; 26% grow red tomatoes; 22% grow sweet corn, snap peas, broccoli or carrots; 17% grow collard greens; 13% grow shiitake mushrooms; and 4% grow okra or greasy beans.

Respondents were given the option of writing in “Other fresh vegetables.” Responses include the following: winter squash (3), kale (3), garlic (3), celeriac, parsnips, Jerusalem artichoke, bok choy, jicama, eggplant, turnips, beets, onion, chard, leaf lettuce, celery, black beans, mixed lettuce, Bibb lettuce, green tomatoes, shallots, basil, parsley and other herbs. Among positive respondents, 13% indicated growing winter squash, kale or garlic. All additional other fresh vegetable responses totaled 4% each.

Note: many respondents indicated that they grow more than one product on their farms.

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Question 4 – Which of the following other fresh foods do/will you have available?

Eggs Honey Herbs Goat Cheese Cow Cheese6

(15%)2

(5%)6

(15%)0 0

11 out of the 40 total positive respondents, or 27.5%, responded that they had one or another other fresh food available.

Among these 11 respondents, 54.5% indicated producing eggs or herbs, and 18.2% indicated producing honey.

Note : many respondents indicated that they grow more than one product on their farms.

Question 5 – Which of the following meats do/will you have available?

Beef ChickenFresh Hams Pork Turkey

Country Hams

Pork Sausage Lamb

Italian Sausage Goat

16(40%)

2(5%)

0 2(5%)

1(2.5%)

0 0 3(7.5%)

0 4(10%)

21 out of 40 total positive respondents, or 52.5%, responded that they had one or another meat available.

Among these 21 respondents, the vast majority, 76%, indicated that they raise beef; 19% indicated raising goats; 14% raise lambs, 9.5% raise chickens and pigs; and 4.8% raise turkey.

Note : many respondents indicated that they produce more than one product on their farms.

Question 6 – Which of the following value-added/processed foods do/will you have available?

Canned Vegetables

Salsa/Hot

Sauce

Dried Peppers Chocolates

Jams / Jellies

BBQ Sauce

Baked Goods

Snack Mixes

Apple Butter Pesto

2(5%)

6(15%)

6(15%)

0 8(20%)

1(2.5%)

4(10%)

0 5(12.5%)

6(15%)

14 out of 40 total positive respondents, or 35%, responded that they had one or another value-added or processed food available.

Among these 14 respondents, 57% indicated that they make jams or jellies; 43% make salsa/hot sauce, dry peppers or pesto; 35.7% make apple butter; 28.6% make baked goods; 14.3% can vegetables, and 7% make BBQ sauce.

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Respondents were given the option of writing in “Other items.” Responses in this category receiving one vote each include the following: fleece products, dried flower wreaths, fresh flowers, evergreen wreaths, pickled products, ice cream, dilly beans, chutneys, conserves, tomato sauces, herbed vinegars, and berry vinegars.

Note : many respondents indicated that they produce more than one product on their farms.

Question 7 – What other products would you be interested in growing for this project?

8 out of 40 total positive respondents, or 20%, responded with other interests. Responses to this open-ended question were naturally varied and are (in no particular order) as follows: herbs, onions, butternut squash, pumpkins, wildflowers, black-eyed Susan, yarrow, culinary herbs, stevia, Echinacea, comfrey, Fraser firs, and fresh and edible flowers. Three less specific answers included “not sure,” “anything that will sell,” and “interest in growing produce only if have viable markets or contracts at a competitive price.”

Question 8 – How many acres do you have in commercial production?

28 out of 40 total positive respondents, or 70%, indicated the number of acres in commercial production. Answers to this question varied from zero acres in production to several hundred. The largest acreage tracts are generally for beef cattle, although some of the larger tracts are in orchards or hay. Many of the smaller total acreages are fruit and vegetable growers. The total number of acres in current commercial production totals 587.75 acres. The average acreage in commercial production is 23.51 acres. Many of these producers with acres in commercial production also have the opportunity or desire to expand into arable land that could be placed into production if suitable markets were available, as will be seen in the responses to the next question.

Question 9 – How many acres of arable land could you put into production if you had suitable markets?

25 out of 40 total positive respondents, or 62.5%, indicated they had arable land that could go into production given suitable markets. Answers to this question varied from zero to 100 acres. Some respondents who indicated they had acreage in commercial production did not indicate additional arable land for potential production, while some who did not indicate any acreage under current commercial production indicated they would be willing to put acreage into production given suitable markets. Still others indicated they were operating at maximum capacity on their given acreage. The total number of potential arable acres given suitable markets is between 324 and 328. This means that the average acreage that could be put into commercial production given suitable markets is between 12.96 and 13.12 acres.

Question 10 – What are your primary cash crops?

34 out of 40 total positive respondents, or 85%, indicated their primary cash crops. Those crops are as follows in order of number of responses:

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Cattle (12), peppers (5), lettuce/greens (5), herbs (3), hay (3), squash (3), tomatoes (3), goats (2), vegetable crops (2), boxwoods (2), eggs (2), Christmas trees (2), landscape trees/shrubs/perennials/field liners (2), shiitake mushrooms, potatoes, garlic, beans, Jerusalem artichokes, broccoli, eggplant, cabbage, herbs, wool, lamb, apple trees, other fruit trees, dried plums, value added, and agritourism.

Question 11 – Do you currently sell food products at local markets?

37 out of 40 total positive respondents, or 92.5%, responded to this question. We will assume that those who did not respond to this question do not currently sell food products at local markets.

Yes No15

(37.5%)25

(62.5%)

Question 12 – If yes, where do you currently sell your locally grown foods?

21 out of 40 total positive respondents, or 52.5%, answered this question. 21 out of 30 respondents who indicated that they currently sell food products at local markets (70%) indicated the locations at which they sell those products. Those locations are as follows:

Yancey County Farmers Market (7), restaurants (5), friends (3) Wednesday Downtown Asheville Tailgate Market (2), Asheville (2), CSA (2), market/farmers market (general – 2), French Broad Co-op, ECO, Earth Fare, Whole Foods, camps, Mountain Foods, JJ Tomato, Southeastern Animal Fiber Fair, UNCA Tailgate Market.

Question 13 – Are you a current or former tobacco farmer?

37 out of 40 total positive respondents, or 92.5%, responded to this question.

Yes No17

(42.5%)20

(50%)

Question 14 – Please add any other information that will be helpful for developing this project:

Responses are as follows:

Respondent 1 --Products coming from Yancey County should reflect the extreme seasonality of availability – i.e. educating the public to honor the seasonal availability of varieties -NOT tomatoes in January or watermelons for July 4!!! Support Yancey County's agricultural economy, not the uneducated public demands.

Respondent 3 -- We should learn/model this project after ECO and NROG and with the help from ASAP.

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Respondent 6 -Experienced cook, baker food product developer. Value added is the future! Other mushrooms are looming in our future.

Respondent 13 - As you well know, there must be a market. Presently, the Biltmore Estate controls most of large production of cash crops. This pushes the small farmer OUT! in WNC.

Respondent 14 - I've been trying to plant a profitable farm but am limited because of funds. I grow enough for my whole family and to share with family and friends. I also have a small greenhouse which I propagate a lot throughout the year. Right now my greenhouse is in really bad shape but it is full of herbs and sedum planters and bonsai. It needs heat and a new makeover.

Respondent 19 - We think a wholesale distribution center and a commercial kitchen such as the one at BRFV would benefit the county. There is also a need for a meat processing facility in our region - the closest one is two hours away.

Respondent 26 - I strongly believe that this project can directly support economic growth/continued income throughout the season for YANCEY County farmers. That means developing Yancey Grown products, selling only Yancey grown produce in any aspect of this project. If our growing season is so short we should focus on season extension techniques as well as value-added products and specialty items: meats, forest products, medicinal herbs, pies, cakes of regional type, AND most importantly we need to educate both residents and visitors about our region's bounty. This is a detailed answer but to examine individual product feasibility is something I have done on a limited basis but am actively doing for my own farm. On my table is a delicious jar of chipotle salsa made by a friend in Yancey County. I have half a dozen or more unique products that I am exploring. Feel free to contact me anytime to discuss further - I am most available Mondays and Thursdays but my time becomes more flexible in winter.

Respondent 29 - We need a USDA certified kitchen for making products for sale like they have in Madison. We need a facility for canning, drying, cheese making, and butchering.

Respondent 30 - I usually sell all my crop here at the orchard but would welcome other outlets

Respondent 31 - Would like a certified place to make pickles, jam and ice cream. Please consider asking businesses or churches with large campuses to start organic gardens or community gardens to help feed the community. Some people want to garden but have no land. Look at 7th Day Adventist Church campus - high school ag students could grow a lot of vegetables there. Also the sock factory might be willing to let their land be used for gardening. Would make a great site for a demonstration or community garden.

Respondent 33- Could the Yancey County CES establish FDA approved kitchen and processing facilities similar (or better!) than those in Madison County?

Respondent 34 - goat pasture development information.

Yancey Survey Conclusion

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After reviewing the submitted survey responses, the researchers determined that there is sufficient producer demand in Yancey County to warrant further investigation into the development of an agricultural marketing, consolidation and distribution center. The survey identifies those respondents who are interested in providing products to such a venture. In order to accurately assess the volumes of products these producers can make available to the project, the next steps were one-on-one producer meetings and interviews. The researchers recommended that full feasibility analysis proceed with deliverables as originally proposed to Yancey County project leaders.

That study, completed by David Harper in 2011, did not find sufficient demand in Mitchell County alone for an aggregation, sales and marketing center. However, merging the two efforts will allow for a stronger and more diverse farmer base to support project development overall.

Mitchell County Farmer Participation Survey – by David Harper, Land In Common

In 2011, David Harper of Land in Common conducted a farmer participation survey in Mitchell County. Based largely on methodologies used for the farmer survey in Yancey, the Mitchell County results are useful for contemplating a regional produce aggregation and sales center serving both counties and the surrounding region. Mitchell survey results are presented below:

Question 1 – Do you have an interest in supplying your locally produced food to a consolidated sales and distribution organization in Mitchell County?

Yes No Maybe/Did Not Answer (DNA)23

(54%)10

(23%)10

(23%)

Overt interest among respondents for supplying locally produced food to a consolidated sales and distribution organization is 23 out of 43 or 54%. The percentage of respondents with no interest in the project is comparatively small at 23% (10 out of 43), while 10 respondents (23%) did not answer the question. Some of these reported that they only raised beef cattle or grew Christmas trees. We infer that at least some farmers who did not answer may have some relevant interest in this project.

Question 2 – Would you assist with the formation of a local distribution system?

Yes No Maybe/Did Not Answer (DNA)24

(56%)6

(14%)13

(30%)

A majority of respondents – 24 out of 43 (56%) – responded that they would assist with the formation of a local distribution system. These responses offer the first insight into the potential formation of a distribution organization consisting of farmers as founding members. The percentage of respondents

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with no interest in participating in this system is much less, 14% (6 out of 43), while 13 respondents (30%) did not answer the question. Some farmers who did not answer may have some relevant interest in participating in a distribution once they learn more about the purpose and function.

Question 3 – Which of the following seasonal fresh fruits do/will you have available?

Apples Strawberries Blueberries Grapes Peaches8

(19%) 5

(12%)6

(14%)2

(5%)2

(5%)Blackberries Cantaloupes Pears Raspberries Watermelons

8 (19%)

4(9%)

3(7%)

6 (14%)

4 (9%)

20 out of the 43 total positive respondents, or 47%, responded that they had one or another seasonal fresh fruits available. Those responding that they grow other fruits listed: wineberries, cherries, and pumpkins. Apples and berries are by far the most commonly listed fruits grown by respondents, and could therefore represent important opportunities for distribution to schools and hospitals. Apples and blackberries each accounted for 19% of responses, while raspberries and blueberries each accounted for 14% of responses. 12% said they grow strawberries, and cantaloupes and watermelons each accounted for 9% of responses. Pears, peaches and grapes accounted for 7%, 5% and 5% of responses.

Note: many respondents indicated that they grow more than one product on their farms, and some listed that they will grow certain fruits in the future.

Question 4 – Which of the following seasonal fresh vegetables do/will you have available?

Summer Squash

Tomatoes (heirloom)

Sweet Corn Cabbage

Red Tomatoes

Hot Peppers Potatoes

Snap Peas Zucchini Cucumbers

8(19%)

4(9%)

7(16%)

4(9%)

5(12%)

6(14%)

13(30%)

3(7%)

7(16%)

5(12%)

Green Beans Romaine

Bell Pepper Okra Broccoli Collards Shiitake Carrots

Greasy Beans

10 (23%)

3(7%)

7(16%)

4(9%)

5(12%)

3(7%)

5(12%)

3(7%)

7(16%)

15 out of the 43 total positive respondents, or 35%, responded that they had one or more seasonal fresh vegetables available. This is less than the total number of respondents growing fresh fruits in Mitchell County. Among these 43 respondents, the greatest number (13) reported growing potatoes, a full 30% of those who filled out the survey. This was followed in popularity by green beans at 23%; 19% indicated growing summer squash; while sweet corn, zucchini, bell peppers, and greasy beans are each listed by 16% of respondents; hot peppers are grown by 14%; 12% grow cucumbers, red tomatoes, broccoli, and

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shitake mushrooms; 9% grow heirloom tomatoes, cabbage, or okra; while 7% grow snap peas, romaine lettuce, collard greens, or carrots.

Respondents were given the option of writing in “Other fresh vegetables.” Responses include the following: sweet potatoes, greens, mustard greens, dry beans, bush beans, shelling beans, winter squash, pumpkins, cauliflower, onions, spring onions, turnips, beets, spinach, snow peas, swiss chard, kale, and oyster mushrooms.

Among positive respondents, several were growing a wide variety of vegetables. Of those who only grew one or two types, potatoes and beans were most common, which may indicate that these vegetables have been traditionally grown in the county.

Question 5 – Which of the following other fresh foods do/will you have available?

Eggs Honey Herbs Goat Cheese Cow Cheese5

(12%)2

(5%)1

(2%)

8 out of the 43 total positive respondents, or 19%, responded that they had one or more other fresh food available. Among these 5 respondents, 12% indicated producing eggs, while 2 produce honey (5%) and one produces herbs for sale (2%). No respondents listed that they produce either goat or cow cheese.

Note : many respondents indicated that they grow more than one product on their farms.

Question 6 – Which of the following meats do/will you have available?

Beef ChickenFresh Hams Pork Turkey

Country Hams

Pork Sausage Lamb

Italian Sausage Goat

2(%)

0(%)

0 0(%)

0(%)

0 0 2(%)

0 0(%)

5 out of 43 total positive respondents, or 12%, responded that they had one or another meat available, however, it is unclear from the responses whether these are sold at livestock markets or processed and sold locally. Two listed that they have beef available, and an additional 7 respondents noted elsewhere on the form that they raise beef cattle for sale to other markets, for a total of 9 cattle producers or 21% of respondents. Two respondents listed that they have lamb available, and one respondent raises meat rabbits for local sale.

Question 7 – Which of the following value-added/processed foods do/will you have available?

Canned Vegetables

Salsa/Hot

Sauce

Dried Peppers Chocolates

Jams / Jellies

BBQ Sauce

Baked Goods

Snack Mixes

Apple Butter Pesto

0 1 0 1 3 0 3 0 1 2

25

(0%) (2%) (0%) (2%) (7%) (0%) (7%) (0%) (2%) (5%)

11 out of 41 total positive respondents, or 26%, responded that they had one or another value-added or processed food available. Additional value added/processed foods listed included: cider (2), and lye soap.

Among these 3 respondents, 7% indicated that they make jams or jellies; 5% make pesto; 2% make apple butter; 2% make salsa/hot sauce; 2% make chocolates; and 7% make baked goods.

Respondents were given the option of writing in “Other items,” though none responded

Note : many respondents indicated that they produce more than one product on their farms.

Question 8 – What other products would you be interested in growing for this project?

15 out of 43 total positive respondents, or 35%, responded with other interests. Responses to this open-ended question were naturally varied and are (in no particular order) as follows: dried mushrooms; squash; cut flowers; peppers; vegetable starter plants; blueberry plants; strawberry plants; rhubarb; basil; greens; seed sprouts; pasta; boxwoods.

Question 9 – How many acres do you have in commercial production?

29 out of 43 total positive respondents, or 67%, indicated the number of acres in commercial production. Answers to this question varied from zero acres in production to several hundred. The largest acreage tracts are generally for beef cattle, although some of the larger tracts are in orchards or hay. Many of the smaller total acreages are fruit and vegetable growers. The total number of acres in current commercial production totals 660 acres. The average acreage in commercial production is 21 acres. These numbers include some larger pasture acreage producing cattle for sale to livestock markets. The actual acreage of production for local/regional consumption is therefore likely to be lower. Many of these producers with acres in commercial production also have the opportunity or desire to expand into arable land that could be placed into production if suitable markets were available, as will be seen in the responses to the next question. It should be noted that 9 of the respondents (21%) listed Christmas tree production for some or all of their acreage.

Question 10 – How many acres of arable land could you put into production if you had suitable markets?

20 out of 43 total positive respondents, or 47%, indicated they had arable land that could go into production given suitable markets. Answers to this question varied from zero to 40 acres. Some respondents who indicated they had acreage in commercial production did not indicate additional arable land for potential production, while some who did not indicate any acreage under current commercial production indicated they would be willing to put acreage into production given suitable markets. Still others indicated they were operating at maximum capacity on their given acreage. It is unclear whether some respondents listed the total acreage they would put in production (including their

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existing production acreage), or just the additional acreage. The total number of potential arable acres given suitable markets is 205. This means that an average of 10 acres could be put into commercial production given suitable markets.

Question 11 – What are your primary cash crops?

38 out of 43 total positive respondents, or 88%, indicated their primary cash crops. Those crops are as follows in order of number of responses:

Christmas Trees (9), beef cattle (8), beans (4), ornamental trees/shrubs (4), potatoes (4), apples (3), honey (2), hay (2), blueberries (2), tobacco (2), strawberries (1), berries (1), lettuce (1), cabbage (1), eggs (1), produce (1), bread (1), mushrooms (1), rabbit meat (1)

Question 12 – Do you currently sell food products at local markets?

12 out of 41 responding farmers (28%) said they do sell their foods at local markets, while 24 said they do not. This reflects the relatively high number of cattle and Christmas tree farmers who responded.

Yes No12

(28%)24

(56%)

Question 13 – If yes, where do you currently sell your locally grown foods?

23 out of 43 total positive respondents, or 54%, answered this question, with 9 of these respondents indicating that they currently sell food products at local farmers’ markets (21%) and 6 of these selling at both Spruce Pine and Bakersville. 11 respondents reported selling at other locations. Those locations are as follows:

Bakersville Farmers’ Market (9) Spruce Pine Farmers’ Market (6) Penland School (1) Eastern Carolina Organics (1) French Broad Food Co-op in Asheville (1) at work (1) restaurants in Spruce Pine (1) on farm/from home (4) repeat customers (1) Walmart (1)

Question 14 – Are you a current or former tobacco farmer?

37 out of 43 total positive respondents, or 86%, responded to this question.

Yes No

27

25(58%)

12(28%)

Question 15 – Would you be interested in participating in the formation of a food distribution organization to supply local schools and hospitals with Mitchell County farm products?

A total of 31 out of 43 farmers responded to this question (72%)

Yes No Maybe/Did Not Answer (DNA)19

(44%)12

(28%)11

(26%)

19 out of 43 farmers (44%) said they would be interested in participating, while 12 (28%) said they would not. Out of 11 farmers who did not answer the question, at least 2 said they were not sure or needed more information.

Mitchell Survey Conclusion

After reviewing the submitted survey responses from Mitchell County, researchers do not believe that there is sufficient producer demand to develop an agricultural marketing, consolidation and distribution center for Mitchell County alone. However, opportunities exist for Mitchell County to partner on a regional level with other counties to develop a center to serve growers in a two or three county area.

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CHAPTER 4 - Yancey County Consumer Participation Survey

In adherence to the original scope of the contract, consumer analysis was conducted in Yancey County only.

After conducting a survey of local farm producers to gauge their interest in supplying local fresh produce and farm products, a survey was sent out to the consuming public. Mountain Heritage High School FFA instructor Chad Ayers sent this survey home to his students’ parents. He also sent surveys out to all employees of Yancey County Schools. The responses to this survey were submitted in both hard copy and online. The total number of responses received for this survey was 107.

Question 1: Do you have an interest in purchasing fresh local produce and/or farm products in Burnsville?

104 out of 107 respondents (97.2%) answered question one. Of the 104 respondents, 100 reported having an interest in purchasing fresh local produce and/or farm products in Burnsville (96.2%). It can be assumed that the three who chose not to respond to this question are not interested. This would mean that 100 out of 107, or 93.5%, had an interest in purchasing fresh local produce and/or farm products in Burnsville.

Question 2: Do you believe locally grown produce and farm products are more healthful?

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29 out of 107 respondents (27%) answered question two. Of the 29 respondents, 28 (96.6%) believed locally grown produce and farm products to be more healthful. One might assume that the 73% who did not answer this question are not fully convinced that locally grown products are more healthful.

Question 3: How would you describe the current availability of fresh local foods in Burnsville?

104 out of 107 respondents (97.2%) answered question three. Respondents were given a rating scale of one to five, with one indicating “Unavailable” and 5 indicating “Very Available.” The average rating response for this question was 2.87 out of 5.

Question 4: How important is it to you to have access to local fresh produce and farm products?

105 out of 107 respondents (98.1%) answered question four. Respondents were given a rating scale of one to five, with one indicating “Not Important” and 5 indicating “Very Important.” The average rating response for this question was 4.37 out of 5.

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Question 5: Do you feel that eating seasonally is an important way to support farmers and the local agricultural economy?

104 out of 107 respondents (97.2%) answered question five. Respondents were given a rating scale of one to five, with one indicating “Not Important” and 5 indicating “Very Important.” The average rating response for this question was 4.66 out of 5.

Question 6: Do you believe it is important that local fresh produce should be available to children in county schools?

105 out of 107 respondents (98.1%) answered question six. Respondents were given a rating scale of one to five, with one indicating “Not Important” and 5 indicating “Very Important.” The average rating response for this question was 4.85 out of 5.

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Question 7: How far would you be willing to go in-county to get to a market specializing in local fresh foods?

15 out of 107 respondents (14%) answered question seven. Of those 15 respondents, 10 indicated in miles how far they would be willing to go in-county for local fresh food. Answers ranged from 3 to 20 miles. The average distance one was willing to travel for local fresh foods came to 12.1 miles. Other responses include the following:

When open I go from Micaville to Davis Farms in Cane River Area.I would be more likely to shop at a central location for convenience purposes.Very.Anywhere located between the two middle schools.By lending my support.

One might assume that the 86% of respondents who chose not to answer question seven do not wish to travel far to purchase fresh local food, or at least would prefer the convenience of local foods being sold in markets where they already shop.

Question 8: Would you be willing to pay a little more in order to purchase produce and farm products you know to be local and fresh from the county?

87 out of 107 respondents (81.3%) answered question eight. Of those 87 respondents, 70 (80.5%) would be willing to pay a little more in order to purchase local fresh products from the county. Of those 70 respondents who would be willing to pay a little more, eight (11.4%) indicated an acceptable markup. Acceptable markup ranged from 1% to 20%. The average acceptable markup came to 9.75%. One might assume that the 18.7% of respondents who chose not to answer question eight are not yet willing to pay more for fresh local products.

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Question 9: Please RANK the following ordering methods in order of your preference (1-4).

89 out of 107 respondents (83.2%) answered question nine. As can be seen in the chart below, ordering in person is the most desired ordering method with an average rating of 2.4 out of 4. Ordering through the US Mail is the least desired ordering method with an average rating of 0.72 out of 4. Ordering online and over the telephone both scored in the middle with 2.02 and 1.83 out of four, respectively.

Question 10: Please RANK the following purchase methods in order of your preference (1-4):

89 out of 107 respondents (83.2%) answered question ten. As can be shown in the chart below, shopping at a traditional market outlet is the most desirable purchasing method with an average rating of 2.77 out of 4. A paid-monthly CSA came in second with a rating of 1.77 out of 4, while a pre-ordered and pre-paid subscription came in third with a rating of 1.04 out of 5. The least desirable shopping method is a pre-paid CSA with monthly delivery with an average rating of 0.88 out of 4.

33

Question 11: How much would you be willing to spend on a fresh fruits and vegetables subscription if the prices were comparable to the supermarket?

77 out of 107 respondents (72%) answered question eleven. Of those 77 respondents, 34 (44%) were willing to subscribe at the $50-100 per month level. The following table illustrates response frequency:

Question 12: How often do you shop for seasonal fresh fruit?

93 out of 107 respondents (86.9%) answered question twelve. Of those 93 respondents, 75 (80.6%) shop weekly for fresh seasonal fruit. The frequency of responses can be seen in the chart below:

34

Question 13: Please check below next to the seasonal fresh fruit that you would be looking to purchase when available:

92 out of 107 respondents (86%) answered question thirteen. The following table illustrates the percentage of respondents who would shop for each fruit when in season. Apples, strawberries and peaches are the three most popular fruits.

Other fruits that people indicated shopping for include kiwi, plums, oranges, rhubarb, banana, pineapple and currants.

Question 14: How often do you shop for seasonal fresh vegetables?

93 out of 107 respondents (86.9%) answered question fourteen. Of those 93 respondents, 78 (83.9%) shop weekly for seasonal fresh vegetables. The frequency of responses can be seen in the chart below:

35

Question 15: Please check below next to the seasonal fresh vegetables that you would be looking to purchase when available:

91 out of 107 respondents (85%) answered question fifteen. The following table illustrates the percentage of respondents who would shop for each vegetable when in season. Corn, potatoes and red tomatoes are the three most popular vegetables.

Other vegetables that respondents indicated shopping for include green peppers, sweet potatoes, kale, cauliflower, carrots, spinach, banana peppers, arugula, asparagus, mushrooms, onions, winter and spaghetti squash, and salad greens.

Question 16: How often do you shop for fresh meats?

91 out of 107 respondents (85%) answered question sixteen. Of those 91 respondents, 73 (80.2%) shop weekly for fresh meat. The frequency of responses can be seen in the chart below:

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Question 17: Please check below next to the fresh meats that you would be looking to purchase when available:

89 out of 107 respondents (83.2%) answered question seventeen. The following table illustrates the percentage of respondents who would shop for each meat when available. The three most popular meats are beef, chicken and pork.

Other fresh meats that respondents indicated purchasing when available include bacon, fish, venison, and kosher meats.

Question 18: How often do you shop for value-added or processed foods?

93 out of 107 respondents (86.9%) answered question eighteen. Of those 93 respondents, 66 (71%) shop weekly for value added of processed foods. The frequency of responses can be seen in the chart below:

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Question 19: Please check below next to the value-added or processed foods that you would be looking to purchase when available:

89 out of 107 respondents (83.2%) answered question nineteen. The following table illustrates the percentage of respondents who would purchase value-added or processed foods when available. The three most popular items are Baked Goods, Canned Vegetables and Jams/Jellies.

Question 20: How often do you shop for other fresh foods?

93 out of 107 respondents (86.9%) answered question twenty. Of those 93 respondents, 72 (77.4%) indicated shopping for other fresh foods weekly. The frequency of responses can be seen in the cart below:

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Question 21: Please check below next to the other fresh foods that you would be looking to purchase when available:

90 out of 107 respondents (84.1%) answered question twenty one. The following table illustrates the percentage of respondents who would purchase other fresh foods when available. The three most popular items are Eggs, Honey and Cow Cheese.

Other fresh foods that respondents indicated purchasing when available include milk, yogurt, juices and smoothies.

Question 22: Please add any other information that you feel will be helpful for developing this project. Your suggestions and comments are welcome!

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To have a central location when these products are available to do shopping at one time.I only buy organic produce. Who knows what fertilizers and pesticides local farmers use?This is just what Yancey County needs. Show what Yancey County is made of and consists of. An all-inclusive Farmers Market--Yancey style.1) Consider incorporating selling opportunities for part-time gardeners. 2) Online access to lists of produce and products available at given times would encourage me to shop a market instead of just going to grocery store. That way I can plan my menus/shopping lists accordingly.I would be thrilled if this were to get going, wonderful idea

CHAPTER 6 – Regional Market Research Results

The goal of regional market research was to learn more about the perspectives on local food marketing in Yancey and Mitchell Counties, measure demand for locally grown foods, learn more about the logistics of how buyers purchase products from a farmer distribution network, and determine who might be likely to play an advisory role in the formation of such a network.

These interviews were also intended to let the food buyers know about the feasibility study, to gauge their receptivity to participating in local food purchasing efforts, and to understand their sense of what farm products would work best as part of an initial pilot project. Follow-up interviews were then conducted based on the specific farm products identified, and how well these fit with what farmers are currently growing (or would be willing to grow). Follow-up questions centered on the logistical details of how and when produce would need to be picked, washed, graded, stored, and delivered.

Retail Purchaser DemandsThe consumer demand survey revealed that 96% of respondents in Yancey County were interested in the retail purchase of fresh local produce and/or farm products in Burnsville. A similar percentage believes those foods to be more healthful because of their being local. While it is important for survey respondents to have access to local fresh produce and farm products, the availability of fresh locally grown foods in Burnsville and Yancey County retail markets is low. Respondents indicated a willingness to pay an almost 10% premium for these products if available. Apples, strawberries and peaches are the three most popular fruits. Corn, potatoes and red tomatoes are the three most popular vegetables.

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Responses show that retail consumers prefer to order their produce in person and purchase it in a traditional market setting. This implies the need to investigate completely the opportunity for establishing a retail outlet as part of this project.

Representative Market Opportunities

Market research interviews were conducted with the produce manager of Greenlife Grocery/Whole Foods in Asheville, the produce manager at Mountain Foods, and Jim Ray, Ingles Vice President of Produce. The goal was to learn more about produce purchase and delivery needs from a wholesale perspective.

Barriers to market entry regarding preparedness must be stressed: Potential local producers must ensure that they have GAP/HACCP certification and a minimum of $1,000,000 in liability insurance. Some retailers will require substantially higher insurance minimums.

One main issue concerning the viability of food production and distribution is the continually rising costs of fuel. This raises not only food transportation costs, but also the costs of any petroleum based product used on the farm. In a large nationwide food distribution system, food prices rise in accordance with fuel prices. Food imported from far beyond the local region is becoming more expensive to buy. If the price gap between industrial commodity food and local food gets too wide, this will provide an advantage for local producers. Their farm products would be cheaper and more competitive than food trucked in from around the nation and the world.

Direct Retail

Since survey responses show that retail consumers prefer to order their produce in person and purchase it in a traditional market setting, locating a suitable physical location for direct retail is important. There are a variety of factors to consider when choosing a physical location, such as vehicle access, visibility to traffic and location. The location should be a minimum of 2,000 square feet and have water, sewer, natural gas and three-phase electricity.

There should be suitable parking for both retail customers and truck access for delivery and distribution. Good visibility will ensure more foot and vehicle customer traffic. A small portion of survey respondents indicated that they would be willing to drive an average of 12 miles to access a facility that specialized in local fresh foods. However, since 86% did not answer the question, we assume that a centralized facility with good visibility will fare best in Yancey County.

A centralized direct retail location can capitalize on the fact that harvest time and summer tourism coincide. It can also benefit from local chefs who can pick their fresh local produce and save delivery costs and carbon footprints. A direct retail location can also consider value-added production, but should be prepared to encounter more stringent local, state and federal regulations. See Chapter 9: Regulatory Issues for more information regarding these regulations.

Direct to Consumer through CSA

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Community Supported Agriculture (CSA) is an increasingly popular way for consumers to buy local, seasonal food directly from a farmer. It is also a way for farmers to create additional marketing channels for their farm products. It works like this: a farmer offers a certain number of "shares" to the public. Typically the share consists of a box of vegetables, but other farm products may be included. Interested consumers purchase a share (aka a "membership" or a "subscription") and in return receive a box of seasonal produce periodically throughout the farming season. In most cases delivery or pickup of produce occurs weekly or monthly. Many CSA’s offer a variety of pickup/drop-off points in a region. This arrangement creates several advantages for both the farmer and the consumer.

Farmer Advantages Consumer AdvantagesGet to spend time marketing the food early in the year, before their long days in the field begin

Eat fresh local food with all the flavor and vitamin benefits

Receive payment early in the season, which helps with the farm's cash flow

Get exposed to seasonal vegetables and new ways of cooking and eating

Have an opportunity to get to know the people who eat the food they grow

Develop a relationship with the farmer who grows their food and learn more about how food is grown

A survey of student families and county education employees determine an existing demand for a CSA delivery program for school employees. A total of 34 respondents indicated that they would be willing to subscribe to a CSA at $50-100/mo., which results in early projected CSA project revenue of $1,700-$3,400. In addition to providing income, the project may charge a premium for providing a CSA service, resulting in increased income generation for the project. The project should consider soliciting shares and organizing farm product delivery for a CSA.

Greenlife/Whole Foods

In 2010, Greenlife Grocery in Asheville was bought by Whole Foods Markets. Since the takeover, Greenlife produce manager Rob Everett reports that some policies and organizational structures have changed. Greenlife is known in the Asheville region as a grocery store that specializes in organic produce. Customers often ask about how the vegetables were grown and what, if any, pesticides or chemicals were used in their production. And, says Everett, people do not want a wishy-washy answer for that – they want to know what goes into their food more now than before. They almost only dabble in non-organics since there are logistical and practical difficulties in keeping the two types separated in transport, storage and on the selling floor. Selling of organic and non-organic produce as a certified organic retailer requires tracking documents and procedures in place to ensure the separation of each type of product.

Regional Whole Foods managers might look differently at the idea of selling local non-organics, and Everett indicated that in the near future a wider diversity of non-organic produce may be available in the Greenlife produce aisle. Locally grown foods do not cost as much to transport as national growers based in California. Local but non-organic produce is generally cheaper than either local organic or nationally-

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distributed organic, which can result in higher profit margins. Sourcing locally also reduces the carbon footprint of the food itself, something that Everett is interested in tracking because people are becoming more aware of this issue. This could lead to an increase in management willingness to embrace the project ideas. Overall, he sees a greater opportunity for local non organics now that Greenlife is part of Whole Foods. He also indicated that there has been somewhat of a clientele shift at Greenlife since the buyout, with more openness to food that is local rather than organic. He estimates that, given Asheville’s passion for local and organic, 70% of his customers want strictly organic and that 30% are flexible with respect to local foods. This could be shifting towards a 60/40 ratio now that Whole Foods is in charge.

Everett is reluctant to identify specific produce items for sourcing from Yancey County growers. Depending on weather and harvest times, there can be a glut in the market one month for an item and a shortage the next month. However, with the growing cycle a little later in Yancey, there may be an opportunity to complement or supplement the availability of other produce supplies. Items like potatoes, onions and squash that can be stored after harvest can be staggered to extend the delivery season. Sometimes there is an exciting immediacy to what is fresh and in season and the store can capitalize on volume sales. This is especially true of sweet corn. In contrast, there are some produce items, heirloom tomatoes in particular, that have a smaller window of opportunity for ripeness.

Everett stressed that new producers that want to get into the shelves at Greenlife are going to have to get in line behind the already established growers that they already do business with. They are encouraged to grow what they know how to grow, and not change to suit a potential market.

“Wet” produce items have to be handled differently because of the increased potential for comingling of organic and conventional produce. Wet items include such vegetables as greens that retain a lot of moisture and that may have to be left to drain on racks. It is water that is a common culprit in the comingling of organics and conventional. Greenlife also require separate and special signage to identify this difference. In terms of required certifications, Whole Foods is increasingly interested in GAP and HACCP and wants to know that their farmers understand common practices to avoid the spread of food-borne illnesses. Safety is very important to management. Everett believes that Whole Foods would be willing to entertain the idea of providing some certification education for their producers. He recommends that should be discussed with regional team leaders based in Atlanta.

Everett expressed a preference for dealing with one legal entity who retains a minimum of $2,000,000 in liability coverage and who delivers in new clean boxes. All of the farmers should sign up under the legal umbrella organization. Everett recommended that Yancey County consider a partnership with Madison Farms. This would help limit the number of vendors that Everett would have to deal with regularly, and in addition Madison Farms is already an approved vendor in the Whole Foods Southeastern Region.

Since phone calls are time consuming, Everett prefers communicating with vendors through email. Vendors should gather and consolidate their weekly price availability on Mondays. They need to be able to generate an internal order sheet to match the purchase order because those two documents are compared at the loading dock upon delivery. Purchase orders should be sent via email.

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Produce needs to be delivered at proper temperatures as well. Greenlife uses a laser temperature gun to ensure that the temperature inside a pallet of vegetables is consistent with the outside. Some deliveries are made in open topped boxes that are filled with ice to keep them cool, and the interior temperature needs to be consistent with the outside temperature. Leading Green Distributors provides transportation services for delivery of produce in a refrigerated truck. This costs money, but when one has to take care of their own distribution, rising gas prices and repairs take a toll on the budget as well. So does the need to hire a responsible driver for the delivery truck. Being dependent on a third party, then, has both its advantaged and disadvantages.

Everett suggested that, as production volumes increase, a consolidated organization consider marketing to Whole Foods’ regional warehouse. Whole Foods may consider warehouse pickup of local produce at stores along their delivery routes to execute a “backhaul” of fresh produce to the warehouse and further reduce the carbon footprint of the produce. Selling at that volume would require lower sales prices to account for the chain’s own distribution costs. Everett thinks that local non organics may sell better in stores that are a further away from the strong local and organic food scene in Asheville.

Contact: Rob Everett, Produce ManagerGreenlife/Whole Foods70 Merrimon AveAsheville, NC 28801 USAP: 828-254-5440

Mountain Foods

Mountain Foods, a local foods distributor housed at the WNC Farmers Market, specializes in small order delivery to restaurants in the greater Asheville area. The company encourages farmers to grow what they know how to grow. As a policy, Danielle, the produce manager, does not tell farmers what they have a need for because she fears encouraging them to grow something that may not have a market in the future. Growing what they already are comfortable with growing will result in a better product that Mountain Foods will be more likely to be able to move. They do not currently require either GAP or HACCP certifications but they are aware of the movement towards these requirements. Mostly what they would like to see from growers is an understanding of the standards for growing and selling the particular item or items they want to sell.

Danielle encourages farmers who wish to sell through Mountain Foods to come to the warehouse to see examples of similar products as they flow through the warehouse. So, if someone wants to grow cabbage, they should come take a look at the varieties, sizes, cleanliness, packages and product ID stickers of cabbage already being sold. She feels that this visual and hands on approach to orienting farmers to their standards is the most effective for maintaining a high standard of delivery. This means presenting a clean and professional product, but should especially consider the packaging method: packaging should not compromise the integrity of the product. Farmers are encouraged to ship their products to Mountain Foods using similar parameters to the big box distributors (such as waxed boxes for cabbage), which helps products during shipment and travel. Considering the end user of their

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products is also helpful: chefs will want products that are easily stored in their limited cold storage. Similarly, it is easier for Mountain Foods to ship food items that are conveniently packaged in boxes. These boxes should have tops on them and be in good shape. Mountain Foods will not buy products that are in topless boxes, heavily damaged or water-soaked boxes, or that contain physical hazards such as nails protruding from the boxes. Again, this goes back to adhering to standards for delivery.

Another efficient and attractive tool that farmers can use is to identify their products with product labels or stickers, much like one might find in a commercial produce section. Labels that contain the farm name, the product identification, harvest/packaging/delivery dates, and any applicable certifications are encouraged. This helps not only the dock workers who are identifying and separating produce for distribution, but also the end users such as chefs in restaurants who can use those identifications as premiums. For example, vegetables with organic certification can be identified as such on menus, often commanding higher prices.

Contact: Anne LancasterLocal Foods CoordinatorMountain Food Products570 Brevard Rd # 5Asheville, NC 28806P: 828-713-5431lancaster.anne@gmail.com

Leading Green Distributors

Kathryn Beatty of Leading Green Distributors is a former employee of Mountain Foods and left the company several years ago to found Leading Green, after recognizing that regional distribution was needed for locally grown produce in NC. Beginning with only one refrigerated truck circa 2009, Leading Green now has 2 trucks, 3 vans, and 3 drivers in addition to the owner. Kathryn reports that she began the business simply as a hauling service for local farm producers, but now has expanded to providing both distribution services and also buying and selling produce to accounts that she has established herself.

Leading Green distributes to Charlotte twice weekly. She distributes to Whole Foods Markets’ wholesale warehouses in Atlanta and Morrisville, NC 3 times per week. She focuses on Charlotte area restaurants for her own buy/sell business, having committed not to compete in the Asheville market with Mountain Foods, her former employer. She does, however, do deliveries to Mountain Foods from other parts of her service area. Leading Green distributes to and from Abingdon, Virginia, through the Asheville region and down the US 74 corridor to Charlotte, and from there over to Winston-Salem, Greensboro, Chapel Hill, and Pittsboro. She has a regular distribution relationship with Eastern Carolina Organics (Pittsboro), Sunny Creek Farm (Brevard NC), Famers Fresh Market (Rutherfordton), and Appalachian Harvest (Abingdon VA), to name a few. Her biggest account is probably with Sunny Creek Farm, the largest producer of fresh sprouts in the Southeast. She reports that she distributes to “all major supermarkets” except Bi-Lo, which Sunny Creek services directly. Leading Green distributes a wide variety of fresh

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produce, local meats, and value-added local products. A listing of their offerings is available at: http://www.buyappalachian.org/buyer/leading-green-distributing.

Contact: Kathryn Beaty, OwnerP.O. Box 63Black Mountain, North Carolina 28711P: 828-275-2405Email: leadinggreendist@aol.com

Ingles

Bob Ingle opened the first Ingles supermarket in Asheville, North Carolina in 1963. Ingles self-distributes 64% of its stores’ merchandise from its distribution center on the outskirts of Asheville, where its headquarters are also located. All of Ingles stores are located within a 250-mile radius of the distribution center, which typically stores in excess of 40,000 pallets of product. Produce managers at Ingles stores indicated that they have no real independent buying power at the store level. Ricky Carr (800-635-5066 x365) is a regional or district buyer contact.

In February 2011, researchers met with Jim Ray, Ingles Vice President of Produce. Ray was visiting stores in Yancey County and was willing to discuss possibilities of sourcing produce directly from farmers in counties where an Ingles store operates. Ingles has made significant increases in purchase of locally-grown fruits and vegetables in recent years. One can see this evidenced in the many pictures hanging above the produce in Ingles stores that display the regional farmers whose produce is available for purchase. Researchers believe this is primarily due to competitive pressures from high-end retailers like Greenlife Grocery (now Whole Foods Markets) and Earthfare, a regional natural foods chain headquartered in Asheville. Additionally, traditional low-cost retailers like Wal-Mart are now actively sourcing locally-grown produce. As a mid-range retailer, Ingles has little choice but to increase local food purchases in response to these competitive pressures.

Jim Ray indicated that Ingles was receptive to buying local produce from well-established growers in the region, allowing them to conduct direct store delivery to stores located in or near their home counties. Ingles stores in the northwestern counties (Yancey, Mitchell, McDowell, Avery) will begin carrying leafy greens grown in Yancey and Mitchell counties in 2011. Ray was also receptive to the idea of buying produce from a local-foods aggregation and marketing organization. Ingles local produce managers and merchandise executives were very receptive to the idea of buying from one legal entity charged with quality control oversight, invoicing, and store delivery. They expressed strong reservations about their ability to buy large quantities of produce from multiple farms due to logistics, billing, and quality control issues.

One well-known farmer is coordinating production and distribution to the Ingles stores in the region. This grower is now working with other growers in both Yancey and Mitchell counties to facilitate increased production under strict quality control standards. This growers reports that after his first year of vending to Ingles, he would be willing to begin discussions on supplies of a larger variety of produce

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that could be grown in the region by other growers with specialty crop experience. Items under consideration may include heirloom tomatoes, sweet corn, and Kennebeck potatoes.

Ray is receptive to future discussions around sourcing locally. He stressed that suppliers must be GAP certified and must have $1,000,000 in product liability insurance to sell to their stores. To sell to Ingles, an aggregation facility should become GAP certified, and growers should be GAP trained to Tier I. Tier 1 certifications are directly related to field production and harvest and include an introduction to common food-borne pathogens and diseases as well as recognizing points of potential contamination, proper use of biosolids as a nutrient source, effective hand-washing procedures, packing facility cleanliness and verifying water quality for field application and postharvest handling. Most recent conversations with Ingles indicate that their lawyers require $5,000,000 in product liability. This could end up costing growers about $400 a year. For more information on farmer and facility regulatory progress, see Accomplishments in Chapter 9 – Regulatory Issues.

Ingles has expressed interested in supporting the project. In January 2012, a meeting in Ingles was held with Matt Hamilton. Ingles is still interested and a meeting is being arranged with Jim Ray, Ingles VP of produce to discuss specific produce, amounts, quality, packaging, GAPs requirements, distribution, and volume. In 2011 Ingles wanted a local grower to source 1000 boxes a week of a particular crop for 30 week at $36 a box. The grower could only produce 100, leaving a gap of 900 boxes a week. This was $972,000 in unmet produce demand last growing season. Ingles interest is one of the reasons TRACTOR is focused on the wholesale market for 2012.

Contact: Jim Ray, Ingles Corporate Buyer2913 US Highway 70 WBlack Mountain, NC 28711-9103P: 828-669-2941F: 828-669-3678

Mitchell County Schools

Mitchell County Schools serves breakfast and lunch to approximately 2,055 children in its eight schools, as illustrated in the attached map. This number has dropped from a high of 3,000 in recent years, due in part to unemployment and underemployment in the county. The eight schools in the Mitchell County school district include one high school, two middle schools, four elementary schools, and one primary school.

Interviews February 17, 2011 and March 11, 2011

According to Heather Calhoun, Director of Child Nutrition for Mitchell County Schools (MCS), the school district is interested in working with local farmers to source certain fruits and vegetables that can be grown locally and distributed consistently and in the right sizes during the school year. These may include products such as baking potatoes, cabbage, and blueberries. These could be collected from farmers, washed, graded and packed, and delivered by one truck to different schools. Ms. Calhoun was

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aware of Madison Farms selling local beef to schools, and felt this could be a good example of a longer-term opportunity.

Liability insurance has been a bottleneck for purchasing locally, since all food suppliers must carry at least $1 million in GAP/HACCP coverage. This can be done with a group policy and an umbrella clause protecting all farmers participating in a business or cooperative.

The school district has taken some steps forward in promoting local foods, and has worked with ASAP’s Farm-to-School initiative in recent years. Apples from Jim Saylor’s farm and potatoes from Sam Silver are two examples of local farm products that have been purchased by the district in the past. School gardens have also played a role in helping school children to learn where their food comes from. A science enrichment grant was obtained for school gardens at Buladean and Gouge, led by Tamara Houchard, a 3rd-grade teacher at Gouge. Colby Calhoun, principal at Gouge, has been supportive of the school gardens. Barbara Garlan has also been active with nutrition education at Deyton Elementary in Spruce Pine. The district also hosted cooking classes and farm field trips through the 4-H and Future Farmers of America (FFA). FFA, led by Hailey Hampton, sells vegetable starter plants each spring. Educating children about healthy eating can have an important benefit of reaching their parents and siblings at home.

Some food items in Mitchell County Schools (MCS) are bought in a collective buying arrangement with Madison County and Yancey County, but this does not apply to produce. The school system receives frozen blueberries, frozen strawberries, frozen peach cups and frozen 80/20 ground beef from the USDA in yearly allotments based on free and reduced lunch data. It would be duplicative to try to offer these products to the school system. These items take up a large portion of the school system’s freezer space. Any additional frozen items would be difficult for MCS to purchase because of their very limited cold storage options in Mitchell County. They do not have a centralized cold storage facility or a refrigerated delivery vehicle; therefore, any items they purchase need to be shipped cold. Each individual school also has limited storage space, so regular consolidated delivery is an important concern for them. Heather is interested in looking into grant opportunities for Mitchell County to construct centralized cold storage.

In order to purchase food from a supplier, that supplier must carry GAP/HACCP certifications as well as at least $ 1 million in liability insurance. In some cases, this can be achieved with a group policy that protects all farmers participating in a business or cooperative, however, individual farms may still be required to cover their own insurance. MCS ordering must take place at least a week in advance so that Heather can ensure the proper food is in place for their rotating menus. They receive weekly quotes from their producers through email or fax. If any one item is cost prohibitive, she simply nixes that item from the week’s menu and seeks an appropriate substitute if available. Bid prices are necessary for institutions, and she thinks that the average quote pricing system that we discussed sounded reasonable. This system takes an average of available commercial price quotes to determine the bid price for local produce. The individual schools tabulate their food needs on Fridays, relay that to Heather, and she places the consolidated order for the school system on either Friday or first thing Monday. Each school has their food delivered on the following Thursday. Therefore, any local produce order would also have to be consolidated and delivered in accordance with these guidelines.

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MCS decided against ordering from Madison Farms in the past because the logistics and delivery costs for transportation exceeded their budget. This is a big concern for Heather, whose labor costs often exceed her food costs since they prepare so many of their meals from scratch. This makes it hard to cut costs associated with her food budget without sacrificing quality or volume.

Heather is interested in participating in the formation of an advisory network committee to oversee the project, but cannot take on a large role because of her other responsibilities. She feels that the committee makeup should represent county extension, farmer representatives, consultants and members of the business community.

Potential suppliers to Mitchell County Schools should be prepared to meet size guidelines, have insurance and certifications, offer a reasonable price, and consolidate delivery. Following are purchase details for produce that could be supplied through local sources:

Produce Item Representative Price DescriptionIceberg Lettuce $28 24 countRed Tomatoes $25 25# round red 5X6Carrots $14 25# jumboApples (red delicious/granny smith)

$30-40 113/125 count

Potatoes $18 100 count Idaho russetCabbage $10 50# green cabbage

School food services are provided by Reinhart (formerly I.J. – Institutional Jobbers), based in Knoxville, Tennessee, under a food contract bid out cooperatively between Madison, Yancey, and Mitchell County school districts. In previous years, the district purchased from JMJ, based at the Asheville Farmers’ Market. MCS depends on regular, direct delivery of products from its supplier, since it has no refrigerated delivery truck of its own, and no cold storage. Many of the breakfasts and lunches served in MCS cafeterias are prepared from scratch.

In addition to Reinhart deliveries, MCS receives deliveries of certain foods through the North Carolina Department of Agriculture, subsidized by the USDA, based on the number of free and reduced lunches from 2 years prior (which is 57% for MCS). These foods include canned apple sauces, peaches, and pears.

As an example of food purchasing requirements, Ms. Calhoun offered the following information. MCS purchases foods generally once every two weeks. Regular/small baking potatoes are purchased in 100 count cases. Carrot sticks are purchased weekly, and whole carrots are purchased weekly, grated and used in salads and cole slaw. Tomatoes are purchased 25 lbs. at a time. Iceberg lettuce is purchased weekly, and MCS is starting to mix it with romaine lettuce. Tater tots are regularly served (16 cents per serving). Cabbage is purchased in 25 or 50 lb bags. The size can vary, since it is sliced for cole slaw or served steamed.

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Lunches are limited to $3.17 per lunch (including food and labor), which must include one meat, two vegetables, two fruits, milk, and bread. The goal for meats is to keep the cost at 50 cents or less per serving.

Contact: Heather Calhoun, Director of Child Nutrition, Mitchell County Schools72 Ledger School Road

Bakersville, NC 28705 Email: hcalhoun@mcsnc.org Phone: 828-766-2240

Blue Ridge Regional Hospital

Interviewed March 2011

Doris Grindstaff is the food buyer at Blue Ridge Regional Hospital in Spruce Pine. This hospital serves anywhere between 300 and 500 meals per week, but this can vary depending on the occupancy rates in the hospital. This is especially so since the hospital averages a low volume of 20 in-house patients at any time. She usually receives a produce truck delivery twice a week, on Tuesday and Friday. She is not aware of any required certifications or insurance requirements for her vendors, but with the preponderance of GAP certification requirements industry-wide, it is likely that these requirements exist, especially since hospitals deal with potentially vulnerable populations such as the immune-compromised, the elderly and children.

On a typical day, meals served in the cafeteria at Blue Ridge Regional Hospital include produce that could be locally grown, such as potatoes, onions, and cabbage. Other food offerings include pork chops, macaroni and cheese, corn bread, soup, pinto beans, cakes, pies, and breads. The cafeteria is used by hospital staff and visitors. Meals served in hospital rooms vary according to dietary requirements of patients.

A poster with the title “Make a Healthy Choice” from Merck pharmaceuticals hangs in the cafeteria, with information on how to read food nutrition labels required for packaged food products. A Pepsi machine offers sodas and water.

The hospital has tried in the past to purchase local foods for use in the hospital but have always run into problems. When they tried the farmers market for produce, they didn’t find much suitable to their needs. Also, they didn’t want to have to travel to get their produce. The hospital suggested moving the farmers market to the hospital parking lot to help with this but the idea was not well received by the farmers market.

Three years ago Doris tried purchasing local food: potatoes, tomatoes, strawberries, and cabbage. Doris remembers that the potatoes that came in were too dirty, it took too long for her tomatoes to be delivered, the strawberries were small and sour, and the cabbage heads were too large. In addition, sometimes she had to travel to pick up the produce. The produce manager at Ingles said the same thing about the potatoes and cabbage he received.

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There are a couple of advantages to buying from their current vendor: they get a good deal under contract and with rebates from their vendor and any recall tracking for foodborne illnesses is easily tracked with this company. Doris would like to be able to offer all organic, but that is usually not possible under her budget constraints. The dining room does offer a salad bar 4 times per week. The following table illustrates the produce items and their buying frequency for Blue Ridge Regional Hospital:

Produce Item Buying FrequencyCantaloupes 8-12 each per weekStrawberries (in season) 1 case per weekSweet potatoes 1 case per weekBaking potatoes 1 case per weekRed potatoes 50# every 2-3 weeksGrape tomatoes 1 case per weekCherry tomatoes 1 case per weekRed Tomatoes (4x5) 1-2 cases per weekLeaf lettuce 1 case per weekMesclun Mix 1 case per weekCucumbers 10-20# per weekRed onion 5# per weekYellow squash* 20# per month*Doris indicated that this was the smallest delivery size available through her vendor. It is too large for her purposes, but she tries hard to use it all in different ways. She would prefer smaller delivery of squash.

Contact: Doris Grindstaff, Food Buyer125 Hospital DriveSpruce Pine, NC 28777P: 828-766-1862

Wal-Mart

Wal-Mart was founded in 1962, with the opening of the first Wal-Mart discount store in Rogers, Arkansas. Wal-Mart serves customers and members more than 200 million times per week at more than 8,986 retail units under 55 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs 2.1 million associates worldwide.

Researchers visited the Wal-Mart in Spruce Pine to assess the viability of selling to that store through a direct-purchase arrangement. While Wal-Mart’s produce manager has little local purchasing power, there is a sign that hangs over the produce section in Wal-Mart that reads “We Support Local Farmers”. According to the produce manager, his local produce is purchased from JMJ and local apples from Jim Saylor in Spruce Pine. In order to be able to sell through Wal-Mart, produce must travel through their warehouse, but the produce manager did not know how this process took place. The produce manager said he did not have a contact number for the warehouse.

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Researchers did identify three NC products in the produce section: honey from Lake Lure, molasses from Lake Lure, and individually wrapped sweet potatoes from Snow Hill, NC.

Contact: 2514 Halltown RoadSpruce Pine, NC 28777P: (828) 766-9991

Community Collaboration:

Faith based

Researchers met with Herb Walters of the Christian Stewardship of Creation in February 2011 to discuss enlisting support for the project from local churches and faith-based organizations. While few responses have been received from the faith-based survey, it is the researchers’ belief that churches are an important factor in the development of local foods initiatives like this. Churches can serve as community gathering points where the word can be spread about local foods. They can also serve as convenient CSA delivery points for congregation and community members. Herb Walters of the Christian Stewardship of Creation (CSC) believes that believes that finding new or improved farm markets for the county is an act of Christian care and service for our community. CSC and Extension believe that churches are at the heart of our community. Thus a special church outreach effort will help gather more useful information

that will help County Extension develop better markets.

Contact: Herb WaltersRural Southern Voice for PeaceRSVP/Listening Project Training and Resource Center1036 Hannah Branch RdBurnsville, NC 28714P: 828 675-5933hwalters@yancey.main.nc.us

National FFA Organization - FFA – Mountain Heritage High School

FFA is an organization that promotes and supports agricultural education. FFA is for those with diverse interests in the food, fiber and natural resource industries, encompassing science, business and technology in addition to production agriculture. There is an opportunity for collaboration with the FFA program at Mountain Heritage High School. FFA instructor Chad Ayers is supportive of this project’s efforts. Offering CSA membership to families through the students and the FFA program is a good way to grow the interest in local foods among the next generation. Students can receive a real-world education in the marketing and importance of local foods. The schools can also serve, much like churches, as a focal point for spreading the word and for collection and distribution.

Contact: Chad AyersMountain Heritage High School RdBurnsville, NC 28714

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P: 828 682-6103rcayers@yanceync.net

Market Analysis Conclusions

Market analysis indicates that a produce aggregation project serving the two counties should have a highly diversified strategy of sales and distribution, with income generated from direct retail sales, wholesale distribution, sales to restaurants, direct-to-store wholesale service, subscription consumer sales, and direct-to-institution sales. Diversified revenue streams will prevent the project from becoming overly dependent on one or two large accounts. Experimentation with different levels of pricing for different markets will allow project leaders to develop a mix of sales volumes and gross margins, and may lessen the project cash flow burden on large wholesale accounts, which will have higher volumes but lower per-unit profit margins.

CHAPTER 5 – Existing Facility Research

Several existing projects in the region are similar in scope to the one contemplated in this study. Taking a brief look at these facilities can be useful for comparison of operational practices and development targets to achieve. Examples include marketing procedures, organizational practices, and website development.

Madison Family Farms

Madison Family Farms is a marketing and distribution organization serving the needs of farmers in Madison and surrounding counties. As is common with successful projects like this, they are co-located near a support service. In this case it is at the Madison County Extension office. The organization understands that eating food grown locally can help to preserve their remaining family farms and rural landscape. And this means food dollars stay in the local economy and consumers get fresher, more nutritious food. The organization has also created a useful promotional tool online, madisonfarms.org, which provides information to consumers and tourists about Madison County farms. It also creates and maintains a list of farms operating in the county, provides farmers with Web marketing tools, and encourages the use of technology and e-commerce.

Pilot Mountain Pride

Pilot Mountain Pride is an aggregation center for small to medium size farms, giving them access that they would not have otherwise to retail, service and institutional markets. The company does this by helping farmers distribute their products throughout the area, and provides marketing and internal support for farmers that do not have access to these resources. The program is open to farms in the greater Winston Salem area. Currently sixty farms growing between one-quarter and forty acres of produce are involved. As is suggested for this project, all participating growers must have Good Agricultural Practices (GAP) training which teaches food safety handling and harvesting techniques. And, as is common with successful ventures of this sort, it receives support from many local companies, organizations and agencies. Part of its success is seen in the availability of PMP products in local Lowes

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Foods supermarkets and a growing number of restaurants. Pilot Mountain Pride is currently growing a wide variety of produce including corn, bell peppers, cucumbers, cantaloupe, potatoes, strawberries, blueberries, and more. The project’s goals are threefold: (1) Increase sales and economic opportunity for area growers of specialty crops (2) Provide farmers with crucial training and education in post-harvest handling including grading, packaging and distribution while increasing the long-term viability of family farms, and (3) Raise awareness of local foods in the greater community and increase market share of locally grown goods in the region.

Foothills Connect – online sales and ordering system to coordinate client demand with producer availability – Farmers Fresh Market Initiative

Foothills Connect is a nonprofit organization based in Rutherfordton, NC. Originally begun in 2004 as a broadband initiative to improve internet access in Rutherford County, the organization’s executive director Tim Will developed an online ordering system to link small scale farmers and market gardeners with consumers and restaurants in the Charlotte region. The project has received national accolades for its ingenuity and forward-thinking about the future of local food purchasing and distribution. Foothills Connect has now expanded to include multiple regions of North Carolina, and is working towards increased online sales in the state’s Triad region, upstate South Carolina, and Asheville.

With the Foothills Connect program, farmers and consumers can log-in to the website www.farmersfreshmarket.org and either buy or sell produce through an online ordering system using credit cards. Farmers can upload pictures of their fresh produce, still growing in the field, with prices for delivery to specified drop-off points. Consumer buying clubs and restaurants in urban environments can view and then purchase produce with the knowledge that they are buying the freshest produce available anywhere.

In the Asheville region, Foothills Connect uses Madison Farms as an aggregation point for produce delivered to area restaurants. In addition, the project has a drop-off point at the WNC Farmers Market in Asheville for pickup and distribution to buyers in Charlotte.

In other regions of the state, Foothills Connect has sold its licensing for projects to sell through the website into markets that Foothills Connect does not directly serve. However, the Asheville region is part of the organization’s main distribution system, and there are no licensing requirements for farmers and support organizations to participate at their consolidation and drop-off points. The main reason for this, Will explains, is the demand for more farmers to participate in sales to the Charlotte market. Will says that the demand in the Charlotte region is now greater than current participating farms can supply. The project is therefore recruiting farm producers in the Asheville region to participate at no cost other than handling charges for executing shipping and payment processing. Leading Green Distributors, a local foods trucking company managed by Katherine Beatty, is the distributor for Foothills Connect and makes a circular distribution route for delivery to Charlotte, Asheville, the project’s headquarters in Rutherfordton, and other locations in the western part of the state. The program expects for distribution to buyers in Spartanburg and Greenville to begin in 2011.

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Yancey County has an opportunity to sell aggregated produce through the Foothills Connect program, with deliveries to either Madison Farms or the WNC Farmers Market. Online ordering can become one of several market outlets for participants in the Yancey County initiative. It will be important for this project to pursue online ordering systems for many reasons. It is one method of integrating its production with other existing systems; according to consumer survey research, online ordering is the second most desirable ordering method, receiving an average rating of 2.2 out of 4. This project may also benefit from a unique opportunity to sell product to other distribution hubs such as MFF who experience produce shortfalls during the growing season.

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CHAPTER 7 - Site Review

Introduction

Researchers evaluated several properties in Burnsville and Yancey County to determine suitable locations for local farm product aggregation and distribution.

Criteria by which the potential site locations were judged include the following:

1. Cost of Acquisition and Upfit – almost any site chosen for this project will require significant renovations and upgrades. Installation of floor drains and HVAC systems, construction of food grade walls and ceilings, and plumbing and electrical upgrades are among the most common site improvements needed. Site renovation, even more than equipment acquisition and installation, will likely be the most expensive single investment the project will make. That said, a site that has been recently used for a commercial purpose and that meets current building and safety codes can cost much less to renovate than a very old building that has sat idle for a long period of time. Unforeseen renovation costs, such as replacing a worn-out roof, rewiring the entire

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electrical system, or building handicap accessible entrances and bathrooms, can quickly derail a project’s budget projections.

2. Location – the facility should be in close central proximity to Burnsville. All sites reviewed were located within six miles of downtown Burnsville. This is especially important considering that the results of the community survey indicate that the average distance potential users are willing to drive is just over 12 miles.

3. Parcel Size – it is important that the facility’s property be sufficiently large enough to handle the movement of farm delivery vehicle as well as produce delivery vehicles entering and leaving the grounds. However, the property should also not be so large as to increase maintenance costs or be otherwise physically or financially unwieldy.

4. Building Square Footage – the minimum square footage advisable for a produce aggregation facility is 2,000 square feet.

5. Availability of Commercial Grade Utilities – Commercial grade utilities are important for running the equipment associated with washing, grading, sorting and packaging produce for sale. The utilities include the following:

a. Water b. Sewerc. Three-phase Electricity d. Natural Gas

6. Proximity to Support Services – the success of these facilities is often dependent upon community “buy-in”. The closer that support services such as county extension and community colleges are located, the better off this facility is likely to be.

The following five locations were reviewed and subsequently determined to be incompatible with the project’s needs:

Reviewed Site LocationsBuilding Address Information

1. Taylor Togs Building 621 Micaville LoopBurnsville, NC 28714

6.64 acre property located in flood plain; tax value $450,240.

2. Rabek Building 131 North Main StreetBurnsville, NC 28714

One acre property; 8,935 square foot former sock factory; tax value $153,200.

3. Presnell Building 428 George’s Fork RdBurnsville, NC 28714

6,000 square foot building outfitted as bakery; tax value $133,550.

4. Former Post Office 2 South Main StreetBurnsville, NC 28714

1.52 acre property; 9,400 square foot interior; tax value $669,440.

5. Former Tomato Co-op (Tyner – Northernmost 1/3 of building)

152 Love Fox RoadBurnsville, NC 28714

5.37 acre property; approximately 5,000 square foot interior; tax value $284,530.

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Selected Site Location – Former Tomato Co-op, South End

Former Tomato Coop (Owner: Sam Young – Southernmost 1/3 of building )

152 Love Fox RoadBurnsville, NC 28714

5.37 acre property; 5,600 square foot interior

The former tomato co-op building on Love Fox Road in Burnsville, NC is an approximately 16,000 square foot commercial warehouse that is divided into three sections of just over 5,000 square feet each. It is directly across the street from the former Avondale Mills site. Each section is owned by one of three partners of High Five Hospitality Holdings LLC. While researchers initially reviewed the northernmost 1/3 of the building owned by Mr. Benson Tyner, it was determined that the southernmost section of the building was better suited to the project’s needs. This section is owned by Mr. Sam Young. One reason that this building was chosen for project development is that the owner is amenable to providing some fixed-asset upfit of the building in order to help move the project forward. In most cases, grant funds are ineligible for these improvements because public money may not be used for fixed asset improvements of a privately owned property. Since the project is only leasing and not purchasing this property, some other means for upfit funding are therefore necessary. It should be noted that having a non-profit operation involved in a rent agreement with a private landlord in a private facility is not ideal for project development. The aggregation center should define itself as a project and not a location; if the opportunity arises for the project to take ownership of a facility, consideration should be given to relocation.

Several positive considerations for this location include the following:

1. Location – the building is located about one mile from the center of downtown Burnsville. This central location makes it easier for farm producers to deliver produce for processing, for the project to deliver to markets, and for potential retail customers to purchase produce. It is also located next to the Blue Ridge Fitness and Rehabilitation Center, which may provide an opportunity for marketing to health conscious consumers. The close proximity to downtown also makes it easy for those restaurants that indicated an interest in purchasing fresh local produce to come and purchase their products on site. This is also a convenient pickup location for Community Supported Agriculture (CSA) subscription holders.

2. Size – with over 5,000 square feet available for interior development, this space is sufficiently large enough for project development. The property itself is also large enough to be able to accommodate the various vehicles that will need to access the facility, including employee parking, passenger vehicles, farm delivery vehicles and large produce delivery trucks. A front and read rolling door entry point is convenient for multiple drop offs and for farm producers without the need for access to a lift gate.

3. Utilities – there are commercial grade utilities available at the building, including water, sewer and three-phase electricity. While there is no natural gas available currently in the building, lines are located nearby and can be easily run to the facility if needed.

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4. New roof and gutters – the new roof is insulated, which will help maintain cooler temperatures during the heat of harvest season.

5. Former use as an Agricultural Business – since this facility has once been used as an agricultural facility, there are some features that are helpful to its redeployment as such. The existing rolling doors and loading dock will ease the transition of produce on and off of transport vehicles. In addition, there is an existing floor drain that runs through the Main room. While it is currently filled in with cement, the remediation of this drain will help keep this upfit cost lower than if a drain were to be installed from scratch. Wash lines will be able to tie into this drain system.

6. Proximity to Yancey County Extension –While Extension will not be co-located with the project, the identified site is less than one mile away from Yancey CES and its proximity will allow extension staff to be involved with operations, maintenance, education, outreach and project implementation.

Facility Design and Equipment

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The photographs below show a facility that is in good general condition, able to accommodate farm truck traffic, refrigerated distribution trucks, and retail traffic. The interior, while in need of fixed asset improvements including bathrooms and offices, is dry and large, affording many options for equipment placement and product flow.

Figure 1 - Outside of Coop Building South End

Figure 2 - Main room facing towards Annex

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Figure 3 - Dividing wall requiring build-out

Figure 4 - Main room facing Office and Loading Dock

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Interior Design and Upfit

The representative line drawing below depicts the interior of the southernmost end of the Tomato Co-op building. This image is a plan for development and not the site as it stands now. It represents the final layout once all upfit has taken place and all necessary equipment is acquired and installed.

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Figure 5 - CAD drawing completed by John Hou

Fixed-Asset Improvements

The landlord has agreed to substantial fixed-asset improvements to the existing structure in order to make it more amenable for use as a produce aggregation facility. Improvements being undertaken by the landlord include the following:

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Required Fixed Asset Improvement1. Bathroom Construction with sewer line out – may not utilize same

outflow piping as floor drains2. Electricity Upgrade – need to get an electrician in to assess capability3. Floor Drain Improvements – concrete removal / grading – line out

needs to be separate from toilet line out. Backflow preventer. 4. Wall and Ceiling Hole Repair5. Lighting improvements—replace the six large lamps and drop down for

brighter long fluorescent tube lighting, probably T8. Lights need plastic covers to prevent glass contamination in event of a shattered lightbulb.

6. Dividing Wall Buildout7. Lift Gate Installation8. Office Buildout9. 1’ wide Wash Line Curb – 30’ x 21’ x 30’ x 21’ (102 linear feet)10. Hand Sink (4)11. Interior Bay Door Opening southwest corner of main room12. Wall Fan Installation – exhaust and make up location TBD13. Water Lines (to wash lines?) – need to ID where spigots would be

installed and trace water line. Need to assess water pressure in building and make sure it doesn’t need a pressure reducing valve.

14. Dry Storage / Tool Room Buildout

Landlord improvements are a substantial contribution to the success of the facility because the project will not have to incur these costs.

Equipment Placement

The line drawing above shows suggested locations for major pieces of produce handling equipment. The basic recommended on-site equipment needed in order to begin operations are offered below:

Required Equipment1. 10’x20’ cooler construction and installation2. 10’x10’ cooler construction and installation3. 10’x10’ blast chiller construction and installation4. Compressors for Coolers (3)5. Wash, grade and sorting line (2)

Compared to projects involving highly specialized processing, cooking, or other value-adding processes, equipment necessary for basic produce aggregation, washing, grading, and storing is relatively simple and inexpensive.

Three cold-storage chambers are recommended for the facility in its initial phase: a 10’ x 20’ walk-in cooler, a 10’ x 10’ walk-in cooler, and a 10’ x 10’ blast chilling cooler should prove sufficient to handle

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initial volumes of produce. In the line drawing, these units are placed in the annex along the southern-most wall of the facility. Compressors for each unit are placed along the outside walls abutting the cooler units. A close fit for compressors will reduce the amount of copper piping required and will keep installation costs to a minimum.

Two washing and grading lines are recommended to be placed in the middle of the large main room of the facility. One unit is contemplated for primarily handling root crops such as potatoes, and the other would be used primarily for above-ground crops such as tomatoes, cucumbers, and squash. The units are each approximately 16’ long and 2 to 3 feet wide. Project leaders have already determined the units they will buy from Market Farm Implement of Frieden, Pennsylvania, with purchase in March 2012.

These large pieces should be installed as soon as feasible with existing funds already secured by project leaders. Further discussion of these and other physical assets, with estimated pricing for acquisition, shipping, and installation, can be found in Chapter 10 –Budgets.

CHAPTER 11 - Legal Incorporation

For a normal business enterprise, legal entity choices are well-defined: either a corporation or a limited liability company. With the addition of a public service or economic development mission, it’s important to also consider a nonprofit corporation. In agricultural business, the cooperative is also an important

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form of organization to consider. In consideration of this facility, a nonprofit tax-exempt corporation is recommended as the preferred legal structure.

Toe River Aggregation Center and Training Organization Regional (TRACTOR)A Nonprofit (tax-exempt) Corporation

A working group was established in 2011 to convene Yancey and Mitchell County leaders to provide professional and community support for the development of a legal operating entity. Working group attendees represented a variety of different institutions, such as the county school systems, cooperative extension, community colleges, county government, local farmers, economic developers, landowners and food entrepreneurs. Work was taken up by the group to determine the project’s legal structure, organize support networks, identify staffing and management needs, develop preliminary budgets, advise on policy development, agree on a working name and develop a mission statement. Meetings began in the fall of 2011 and the organization’s name was agreed upon by this group in October 2011. At this same meeting the mission statement was read and revised to read as follows:

The mission of the Corporation is to serve farm-based producers to increase economic success in commercial agriculture for local markets in the Southern Appalachian region. TRACTOR will train and educate new and existing farmers on best production methods to increase local sales of farm based outputs including fresh vegetables, meats, value-added foods, and other products with consumer demand in the region. TRACTOR will increase economic opportunity for farm-based producers through aggregating assets including post-harvest handling facilities, unified grading and packaging services, and coordinated marketing to retail establishments, wholesalers and consumers. TRACTOR strives to return maximum economic value to farm-based producers while generating sufficient program income for long-term sustainability.

During the course of the feasibility study, TRACTOR received notice of its legal incorporation as a non-profit by the Secretary of State of North Carolina on December 15, 2011. TRACTOR’s Articles of Incorporation can be found in Appendix G: TRACTOR Articles of Incorporation. A preliminary version of TRACTOR’s bylaws can be found in Appendix H: TRACTOR Bylaws. Following formal adoption of bylaws by the Board of Directors, researchers recommend pursuing federal designation as a federal non-profit entity. The application form may be found at the following link: http://www.irs.gov/pub/irs-pdf/f1023.pdf.

The traditional corporation and the LLC both require owners to contribute capital to the organization. In contrast, TRACTOR has no owners (and therefore no profit). TRACTOR can engage in business activities, but to the extent it has positive cash flow the profit can’t benefit any particular person. Nonprofit corporations are created by state law but are likewise subject to significant federal tax considerations. While a business corporation is ultimately governed by its shareholders, all authority in TRACTOR is exercised by its board of directors. A nonprofit corporation may be organized to operate with or without members. TRACTOR will have regular members who are users of the facility. TRACTOR is a member-

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based nonprofit that gives its regular members the opportunity to elect four (4) farmer representatives to the Board of Directors, two each from Mitchell and Yancey Counties.

A corporation is a “fictitious person” created by state law with the ability to conduct business to the same extent as a real person, but, like all persons, must pay its taxes. This applies to nonprofit corporations as well. But the federal government and the states recognize that most nonprofits are formed for some sort of public benefit and have created exemptions from taxation for those that qualify. An organization formed for a charitable, educational or scientific purpose may apply for tax-exempt status with the IRS pursuant to section 501(c)(3) of the Internal Revenue Code. As long as TRACTOR can demonstrate that its mission falls within the IRS guidelines for “charitable, educational or scientific,” it can qualify. Economic development purposes usually qualify as charitable or as supporting social welfare, which would qualify this proposed facility for tax-exempt status. If the organization has income from non-qualifying activities, it would have to pay tax on that income but wouldn’t necessarily lose its overall status.

TRACTOR’s Board of Directors composition shows a broad effort for inclusion in the project. This will help generate a sense of ownership among many users and supporters of the facility, strengthening the project as a whole. The make-up of this thirteen member board is as follows:

1 – Mayland Community College

1 – Mitchell County Economic Development Corporation

1- Yancey County Economic Development Corporation

1 – Yancey County Cooperative Extension

1 – Mitchell County Cooperative Extension

2 – Appointee from Yancey County Commissioners

1 – Appointee from Mitchell County Commissioners

2 – Growers from Yancey County – Elected by Growers

2 – Grower from Mitchell County – Elected by Growers

1 – At Large – Elected by the Board

CHAPTER 8 - Facility Operations

As a non-profit agricultural facility, the project should strive to serve all Yancey and Mitchell County growers who desire services, including washing, grading and packing of produce. All willing growers should be offered access to the facility on a scheduled basis and be offered technical support on post-harvest product handling, business preparedness and meeting all relevant inspection and certification

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requirements. Service providers, including Yancey County Cooperative Extension Service and Mayland Community College, should be prepared to offer support to these growers as needed.

As a facility offering open access to services, the project should be willing to develop new marketing channels in coordination with growers. While an aggregated sales and marketing service has the greatest potential for long-term success, other initiatives, such as direct sales at the facility, can help further expand market access. Several growers may wish to use the facility without collaborating on sales and marketing. In these cases, facility management should strive to accommodate these growers at a reasonable fee structure for use of wash lines, cold storage, and other equipment.

Similarly, seasonal promotions and the development of Community-Supported Agriculture (CSA) also may be supported, depending upon the business interests of participants. Direct retail and CSAs offer the greatest opportunity for the project to sell local produce at higher margins while still paying the same 80% base of wholesale back to the farmer. Charging a higher margin in retail and CSA markets will result in a higher gross after cost of goods sold. Therefore, the project should strive to get as much as it can for direct retail and CSA marketed products in order to realize profits to assist with operating costs. The following is one example of profits to be realized from a CSA markup of 50%:

Suppose the facility purchases $20,000 worth of produce from its farmers for a CSA. With 300 members each subscribed to the CSA at the $100 level, this produce could be sold for a 50% markup ($30,000). This results in a profit of $10,000 that could be applied to project operating costs. It is possible to realize a 100% markup in a retail market walk-up scenario.

Research supports the development of a CSA. Surveys of consumers indicated the following trends with respect to produce that apply directly to CSAs:

Local produce ranks low in availability, but high in importance Eating seasonally is important to people Paying a little more for local produce is acceptable Customers prefer an in-person interaction when buying produce A location near to downtown Burnsville is important

The facility should become certified for Good Agricultural Practices (GAP). A Packing House Audit should be conducted by an approved government agency or company that verifies Good Agricultural Practices and Good Handling Practices. The North Carolina Department of Agriculture and Consumer Services has developed a GAP certification cost-share program, offering up to $600 for obtaining a third-party audit to verify agricultural producers are following effective food-safety practices. To help the project understand key components of GAP certification, the following audit documents are included in the Appendices:

1. Appendix A - GAP Assistance Letter

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2. Appendix B - GAP Self Assessment3. Appendix C - GAP Request for Audit Services4. Appendix D - GAP Application5. Appendix E - GAP Authorization Form

Many additional GAP-related resources can be found in Chapter 9: Regulatory Issues.

The facility should also develop an effective Hazard Analysis of Critical Control Points (HACCP) plan. HACCP plans are developed by tracking produce through all aspects of its delivery, processing, packaging and distribution; identifying those areas or times when produce is most likely to encounter contamination; and instituting procedures at those points to ensure produce safety. Strict adherence to HACCP guidelines by management and employees is critical to the success of the plan.

Liability insurance will need to be purchased for the facility. This is an important purchase for the protection of the facility in the event of any product defect or food-borne pathogen outbreak. Also, many purchasers who sell the center’s produce, such as grocery stores and restaurants, will not carry a product unless a certain level of liability insurance is held by its suppliers. The routine minimum level of liability insurance is $1,000,000. Some of the interviews with food purchasers indicated desired levels in the $2,000,000 range as well. However, the potential purchaser with the highest insurance requirements is Ingles, which currently requires $5,000,000 in liability insurance from its suppliers. While this is a substantial amount of liability insurance to carry, Ingles is also the project’s largest potential customer in Western North Carolina. Researchers therefore recommend acquiring $5,000,000 in liability insurance.

Employers are required by state statute to carry Workers’ Compensation insurance if they employ: three or more employees regularly employed in the same business or establishment, or one or more employees employed in activities which involve the use or presence of radiation, or if providing agriculture or domestic services, 10 or more full-time nonseasonal agricultural

workers regularly employed by the employer

Workers’ Compensation Insurance should be purchased for the facility as well. The complete regulations regarding an employer’s responsibility to provide Workers’ Compensation Insurance can be found on the North Carolina Industrial Commission’s website: http://www.ic.nc.gov/employers.html

Facility Management

It is recommended that the manager work under contract until sales are sufficient for the project to directly support this position. Manager should organize initial growers’ meeting to establish growing schedules and begin development of availability sheets. The plant manager will be responsible for core facility operations, including scheduling use of the agricultural center, training employees and farmers on how to use the wash line and packaging equipment, managing the budget and overseeing targeted

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promotions, such as cost-sharing for boxes and special events, that may arise as the facility develops. This individual will coordinate supplies among participating farms to match demand from buyers, oversee quality control of product, oversee delivery of product and manage budgets and billing. The manager should also develop policies and procedures for loaning out and checking back in planting equipment available for loan to farm producers. The project will be looking at a simple “per day” fee. The fee may also be lower for those growers who have been through the GAP training, and even lower for those growers who have been GAP certified. The growers participating in sales to the project may also have smaller fees than those not participating. The goal of the fee structure is to help encourage growers to move towards their GAP certification, and raise enough funds to keep the equipment in good repair.

Selection of an appropriate facility manager may be the most important decision made for project success. The general manager will need to have a good understanding of farming in western NC, solid experience in produce marketing, and excellent communication skills. Constant and clear communication with growers, purchasers, funding agencies, and the general public can be decisive in the success or failure of a project of this nature. In addition, the general manager should be able to work for a modest amount of money. He or she may also be a farmer who derives some income from produce sales or other revenue streams.

Part-time labor will be required to support facility operations and sales and marketing. One way to ensure sufficient and affordable labor, especially during the labor-intensive harvest season, is to solicit employment from area high school students. Program leaders should approach vocational agriculture, Future Farmers of America and 4-H programs in order to describe the employment and training opportunities available. Part-time labor can assist with operating the wash line for larger volumes of produce, make deliveries of orders for the facility and engage in limited direct sales and promotion of the project at festivals and community events. This can serve the dual functions of creating an affordable labor pool and giving young farmers experience in agricultural business. One community partner who should be brought into this effort is Chad Ayers, Mountain Heritage High School’s FFA and Agriculture instructor.

The Aggregation Facility: Toe River Aggregation Center and Training Organization Regional (TRACTOR)

During the course of the feasibility study, a working group was convened that decided upon the name Toe River Aggregation Center and Training Organization Regional (TRACTOR) for the legal entity. TRACTOR received notice of its legal incorporation as a non-profit by the Secretary of State of North Carolina on December 15, 2011. This organization must be operated as a full-service produce distributor able to guarantee product quality and handle sales transactions, just as is expected of larger produce-distribution companies.

TRACTOR is fortunate to have examples of other existing farmer-driven marketing organizations in the state. These organizations have developed processes to meet both buyer and producer needs and expectations. These include Pilot Mountain Pride (PMP), a non-profit Winston-Salem area aggregation

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center; Madison Family Farms (MFF), a nonprofit marketing organization based at the Madison County Aggregation Center; and Eastern Carolina Organics (ECO), a for-profit marketing and sales group headquartered in Pittsboro. Each of these organizations serves to aggregate production from participating farms in order to access markets unable or unwilling to buy from individual farmers.

Guiding principles :

There are two essential principles for serving farmers through an operating a sales and distribution business that has as its key goal serving farmers: transparency and communication.

Transparency is a commitment to let growers know exactly what the project is trying to achieve, who the project will be selling to, how the farmers will be paid and what margins are needed for the project to achieve self-sufficiency. With established institutional buyers such as schools and hospitals, transparency in price structure is essential to forging a close and trusting relationship that can result in long-term purchases and standardized ordering and payments. There is a commercial advantage in letting anchor buyers fully understand how prices are developed and in understanding what their limitations are in how much to pay. As an example, one of MFF’s key buyers was able to reach a fixed-price agreement for buying potatoes by taking an average price quoted over a three-month period from a national distributor and guaranteeing that average price to MFF. In return, MFF and its growers made the commitment to keep a reliable supply available at that price, regardless of whether market prices fluctuated above or below the average in any given week.

Communication means having regular formal and informal contact between the project manager and the growers and between the project manager and buyers. This is accomplished through regularly scheduled meetings, daily or weekly phone conversations, emails and faxes. Each farmer will have his own preferred method of communication, and the project manager must understand how best to stay in touch. Lack of regular communication with growers will inevitably result in unmet expectations on the part of the grower, the project manager and the buyers.

For initiatives of this nature, price can never be the sole consideration. Institutions such as schools and hospitals purchase local food for a variety of reasons: to support the local economy, to buy the freshest produce possible and to make a recognized contribution to the community are common considerations. Price, however, is always a factor in whether a given institution or business can support local foods. Other key factors include consistency of delivery, billing terms, stringent quality control and a guarantee to immediately address any problems associated with the sale in a professional manner.

Farmer Coordination :

The facility should strive to maintain $10,000 in working capital in order to be able to provide a quick turnaround for paying farmers on the front end for their products. Farmers should anticipate receiving 80% of wholesale price for their produce deliveries, regardless of how or where produce is sold by the facility. This percentage payout should remain constant. In previous efforts to coordinate production and sales, project organizers have encountered problems with raising expectations of sales volumes

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among participating farmers. This can be remedied by not promising that a certain amount of produce will be sold, making no promises regarding income potential for participating farms, and selling what farmers already know how to grow well.

One of the most important element of whether a project like this succeeds is the selection of participating farms who will be key suppliers of produce for aggregated sales. Projects of this nature take years to fully develop and initial sales volumes can be expected to be small. Ideally, participating farmers will be established producers with existing markets and significant experience in growing key types of fruits and vegetables. These participants should have no expectation that a certain volume of produce will be sold through the project at any certain price. They must understand the goals and objectives of the project include serving the community as a whole and growing a lasting system to increase sales and income for area farmers. Farmers who will demand that the project “move” a defined amount of produce or enter into verbal or written promises will not be suitable for participation in the project.

Again, farmers with existing markets and income, and who are willing to start small with low expectations, are most suitable for participation. They must be committed to delivering high-quality produce to the project and understand that their produce will be graded before acceptance by the facility. A process must be developed for allowing farmers to self-select their levels of participation within known requirements of the project.

A key component to successfully managing this business and meeting the expectations of growers and buyers is development of seasonal planning through identified grower production schedules: the facility general manager should meet with participating farms in the winter months to determine which farms are able to grow certain items for sales through the organization, with a goal of having adequate supplies of a core base of products for as long as the season will allow. Harvests should run from as early as May, for greenhouse and cold-hardy crops, and into winter, for fall crops such as root vegetables, butternut squash or collards. Yancey and Mitchell County farmers have an advantage in that the mountain climate can allow for later harvest of cold-weather crops that warmer locales have ceased producing and extended harvests of cold-weather crops.

Production scheduling is best conducted in a conversational way, with farmers identifying what they grow well and what they are interested in growing. Often, farmers will want a project manager to tell them exactly what to grow and in what quantity. This should be avoided. For example, at MFF the executive director makes a public announcement of an evening dinner meeting to be held each January or February. The meeting is structured to allow farmers to express their levels of experience in growing certain types of produce and their willingness to have product available for the project. Project leaders explain that a key goal of the effort is to minimize risk to the growers while giving them a chance to access new markets. Price structures are explained, as are the rationale for a handling fee taken off the top of sales to cover operational expenses. MFF has operated with a policy of taking 10 percent from the final delivered sales price to the end-user; however this amount has proven to be insufficient for covering costs. The project should operate with a 20 percent handling fee on all sales.

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MFF believes one of its most valuable services to farmers is the ability to pay for product using bridge capital, before the end-user pays for their delivery. Many institutional produce buyers expect net-30 day terms for payment. The project is able to accept these terms while many farmers are not. The project therefore maintains approximately $10,000 in a fund to pay farmers within two weeks of delivery of product. This is also explained in organizational meetings and is usually an attractive component for farmers considering participation. However, these funds should not be used to purchase produce that does not have an end-buyer.

Based on information gained at the meeting and in follow-up conversations, project leaders develop a production schedule to identify when crops are likely to be available. While leaders try to identify demand in the marketplace for certain types of produce, the sales strategy is largely producer-driven, with the primary goal of matching buyer demand with items that farmers know how to grow and harvest for the marketplace. MFF profiles participating farmers and then attempts to develop market demand to meet what they are already capable of producing. MFF makes an attempt to diversify sources of production without compromising on quality and dependability. Over time, the project has identified growers who can be relied upon to meet these requirements, and new growers are given the opportunity to prove their reliability and commitment to the effort. As a general rule, MFF does not seek to source more than three product types from any single participant farm.

Sales Procedures:

The project should anticipate paying 80% of the wholesale price it receives directly back to the farmer, retaining 20% for operations. In the event that produce is sold at a higher-than-wholesale price, the project itself may retain additional margins to support core operation. Fruits and vegetables should be prioritized for sale based largely on their perishability. Items that require minimal refrigeration and that can hold up over a longer postharvest period are preferred. These include potatoes, tomatoes, peppers and other nightshade vegetables, onions, cantaloupes, watermelons and winter squash. Highly perishable items such as leafy greens, summer squash, eggplant and small fruit are sold, usually at a higher profit, but the project does not encourage farmers to grow these products specifically in hopes of making sales through the project. Instead, farmers who are already growing these items for existing markets are asked to participate if an order for them is identified from buyers. Once harvest time approaches, both MFF and ECO have developed systems in place to match grower supply with buyer demand. A typical process is as follows:

On Thursday morning, the project manager sends emails and faxes to farms asking them to identify what produce will be harvested during the following week and which days harvests will take place. Growers are given 24 hours to respond.

On Friday, the project manager emails or faxes a product availability sheet with prices to established or prospective buyers. Prices may be adjusted for different kinds of buyers, such as restaurants making small orders and large institutions requiring larger volumes. Buyers reply

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with orders and indicate preferred days for delivery the following week. Orders for the week may be accepted as late as the following Tuesday, but most orders should be placed no later than Monday at noon. Examples of product availability sheets are provided in Appendix F – Facility Availability Form.

On Saturday, Monday and Tuesday, the project manager places orders with those growers who have supplies meeting the ordered demand. Growers are then expected to deliver their produce for washing, packing and grading within 48 hours or on an agreed day.

As farmers deliver produce, it is inspected for quality and then graded, washed and/or packed as needed. After this step, the project takes possession of the produce and accepts an invoice from the farmer (project leaders often assist in generating the invoice onsite). Payments should be made not more than two weeks from the day of product delivery to the aggregation site. Produce is delivered on a scheduled basis. To economize transport costs, some organizations set two delivery days, such as Tuesdays and Fridays. Schools, however, often like to receive their shipments on Monday mornings.

For MFF, the only exception to the sales system explained above is regarding potatoes. Potatoes are a cornerstone commodity for the organization, selected because of their long shelf life, long growing season and similarities in production methods to burley tobacco. MFF sets a price for potatoes in consultation with growers in the early spring and tries not to deviate from this price for the entire season. Due to existing relationships with known buyers, MFF agrees to take possession of a defined amount of potatoes from farmers and stores them for sale over weeks or months. This policy allows MFF to take on risk that the farmers would otherwise have to bear, but it only functions with a strong transparent relationship with several institutional end-users, including Madison County Schools and Mars Hill College. The project will want to learn from experiences in Madison County and adapt standard operating procedures that prove to work best. Operations will be refined as the project develops experience and detailed knowledge of both producers and buyers. No two produce distribution systems are identical, and the project will develop standard operational procedures through trial and error.

The first year of operations should be considered a pilot project and an opportunity to learn best practices for management and market development. Instead of seeking to rapidly expand distribution to as many accounts as possible, the project will want to focus most of its first-year services on a handful of anchor accounts that are committed to sourcing local foods from Yancey and Mitchell County growers. Additional sales through retail

Product Movement

There are two possibilities for product to be received into the main room of the facility: a rear ground level dock on the west side of the facility and a front freight dock on the east. This allows the facility to accommodate delivery from a variety of producers’ delivery vehicles. The eastern dock will have steps

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and an entrance to accommodate delivery personnel. This entrance is conveniently located next to the office. Produce will enter the facility through the docks and be staged for processing either along the western or northern walls of the main room. Produce that requires the further removal of residual field heat can be placed in the forced air cooler in the Annex section of the facility. Produce that is ready for processing will be washed, sorted, and graded along one of three wash lines situated within a curb-drain system. Once the produce has been packaged according to end-user specifications, it can then be moved by hand-truck into either the 100 square foot or 200 square foot walk-in cooler through the large southwest door separating the Main room from the Annex. Produce being sold will follow the reverse route through the facility, most likely to a delivery truck at the front dock.

CHAPTER 9 - Regulatory Issues

Introduction

There are differing levels of certification necessary for entering and selling into food markets. The two main certifications that are helpful for entering new food markets are Good Agricultural Practices (GAP) Certification and Hazard Analysis Critical Control Point (HACCP) Certification.

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Good Agricultural Practices (GAPs) are the basic environmental and operational conditions necessary for the production of safe, wholesome fruits and vegetables. GAP is a management system in which food safety for fresh fruits and vegetables is addressed through the analysis and control of biological, chemical, and physical hazards. Many wholesale and institutional purchasers of farm products will require that these certifications be in place to ensure delivery of a safe and wholesome food product to the end-user. As a result, many fresh produce producers are voluntarily pursuing GAP certification to remain competitive in the marketplace, creating a quasi-regulatory regime of its own. The FDA does not currently require a HACCP program for unprocessed fresh fruits and vegetables.

HACCP is a requirement for many value-added food products, including meats, acidified foods, and produce that is further processed (such as cutting mixing and bagging). The project may consider having both GAP and HACCP certifications depending upon types of foods products handled.

Regulatory Accomplishments:

The North Carolina Department of Agriculture & Consumer Services has developed the Good Agricultural Practices (GAP) Certification Assistance Program. This program will help North Carolina growers with financial support in obtaining a third party audit to verify they are following effective food safety practices. Currently 1 grower in Yancey County is GAP certified by a third party audit. 26 growers in the region are currently enrolled in Tier I GAPS training, in addition 12 growers have been through Tier I GAPS Training, but not been certified by a third party audit. An additional Tier I GAPS training will be offered in the spring and fall to increase this number. The facility will be GAPS certified. Ingles prefers that the growers be individually GAPs certified, but the building being certified will help provide the additional time growers will need to get their audit. The workgroup feels strongly that its growers should have their farms GAP certified. Other wholesale buyers would prefer GAPs but do not require it at this time. However, it is the researchers’ belief that requiring these certifications will become the norm in the future. Yancey Extension is also watching closely for the release of the Food Modernization Act Rules.

Regulatory Structure Overview

FDA

By federal law any manufactured food product that contains ingredients or packaging which have crossed a state’s boundaries, or will reasonably be expected to be consumed after having crossed a state’s boundaries are to be federally inspected for safety. Most non-meat items are produced under the jurisdiction of the Food and Drug Administration. There are some exemptions from these general guidelines based on small farm exemptions. Small farm exemptions vary by state and locale. Individual and local regulatory agencies should be contacted directly to obtain the specific local regulations that would be applicable. If the food product contains meat or poultry, its manufacture falls under the jurisdiction of the United States Department of Agriculture.

USDA

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If the project chooses to have meat products processed for distribution, it will fall under USDA jurisdiction. In this case it is recommended that the project utilize Little David’s in Burnsville for processing. This operation will only provide cut-up services, not slaughter or leasing of hanging space. If the project is only selling meat of someone else’s processing, it will need to acquire a North Carolina Division of Agriculture and Consumer Services Meat and Poultry Handler’s Registration. To initiate the registration process, applicants call the NCDA&CS Meat and Poultry Inspection Division at 919-733-4136. The receptionist will take down the applicant’s name, address and phone number and may ask a few questions to ensure a Meat and Poultry Handler's Registration is required. This information will be forwarded to the appropriate field personnel, and a member of their field staff will contact the applicant to arrange an appointment for an on-site visit to set up registration. This on-site visit is free of charge. Department employees conducting the Meat and Poultry Handler registration review process will be checking for the following:

• All meat and poultry products are properly marked, labeled and wholesome.• Storage units such as coolers or freezers are clean, in good repair, and are able to keep product at a safe temperature• Storage units are dedicated for the meat and poultry products you will be offering for sale (no other personal items inside)• Storage units are indoors and the general housekeeping around the coolers / freezers is such that it does not pose a sanitation hazard to the meat and poultry products inside• Adequate pest control measures are taken to maintain sanitary conditions in the area where product is stored• Any damaged or returned product is properly disposed of

Field personnel will revisit each registered meat and poultry handler at least annually for review.

NCDA&CS

The state has adopted verbatim, Good Manufacturing Practices, 21Code of Federal Regulations Part 110, as the food processing code for the state. The state does not require pre-construction review of food plant designs. Plans that are satisfactory to county health officials are most likely to be in compliance with 21CFR110. The FDAs Model Food Code and 21CFR110 are available at www.fda.gov. These provide the basis for North Carolina regulations governing sanitary facilities.

Yancey County Health Department

The Yancey County Health Department is responsible for regulatory inspection of places of business serving meals, such as restaurants, as well as catering establishments. Most produce aggregation centers do not engage in this activity. However, should the project develop to accommodate hot catered meal preparation, the local health department must be contacted for regulatory guidance.

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Agency Name Address ContactUSDA (required for meats and poultry)

Mr. Steve Lalicker, District Manager

6020 Six Forks Road, Raleigh, NC 27609

P: 919-844-8400 F: 919-844-8410

FDA (required if products or ingredients cross state lines)

R. Edward DeBerry, Resident in Charge

Asheville Resident Post, 44 Buck Shoals Road, Arden, NC 28704

P: 828-684-3585 F: 828-684-4932

NCDA Food and Drug Protection Division

Jim Melvin, Assistant Director of Regulatory Programs

4000 Weedy Creek Road, Raleigh, NC 27607

P: 919-733-7366 F: 919-733-6801 Jim.Melvin@ncagr.gov

Yancey County Health Department

Lynda Kinnane, Health Director

202 Medical Campus Drive, Burnsville, NC 28714

P: 828-682-6118 F: 828-682-6262 lkinnane@trhd.dst.nc.us

NCSU, Department of Food Science

Dr. David Green, Professor, Food Science Extension Leader

NCSU, Campus Box 7624, Raleigh, NC 27695-7624

P: 252-222-6304

dpg@ncsu.edu

Other Certifications

Activity Certification NeededWholesale FDA InspectionValue-Added Produce FDA InspectionValue-Added Meats USDA Food Safety Inspection Service or state

inspection services (NCDA&CS)Distribution of Meats not of own production Meat Handler’s LicenseOff Site Catering County Health InspectionProcessing of Product HACCP (expected)Organic Certification USDA National Organic ProgramHalal/Kosher Certification Multiple non-governmental agencies

Good Agricultural Practices (GAPs)

Good Agricultural Practices (GAPs) are the basic environmental and operational conditions necessary for the production of safe, wholesome fruits and vegetables. The purpose of GAPs is to give logical guidance in implementing best management practices that will help to reduce the risks of microbial contamination of fruits and vegetables. Examples of GAPs include worker hygiene and health, manure use and water quality throughout the production and harvesting process. While the United States has one of the safest food supplies in the world, recent media attention on food-borne illness outbreaks underscores the importance of good agricultural practices.

Growers, packers and shippers are urged to take a proactive role in minimizing food safety hazards potentially associated with fresh produce. Being aware of, and addressing, the common risk factors outlined in GAPs will result in a more effective, cohesive response to emerging concerns about the microbial safety of fresh fruits and vegetables. Furthermore, operators should encourage the adoption of safe practices by their partners along the farm-to-family food chain. This includes distributors, exporters, importers, retailers, produce transporters, food service operators and consumers.

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GAPs History

A Historical Perspective on Good Agricultural Practices (GAPs)

Fresh fruits and vegetables are important to the health and well being of the American consumer. However, over the last several years, the detection of outbreaks of food-borne illness associated with both domestic and imported fresh fruits and vegetables has increased.

In May 1997, as part of the President’s Food Safety Initiative, the Department of Health and Human Services, the U.S. Department of Agriculture, and the Environmental Protection Agency sent to the President a report that identified produce as an area of concern. On October 2, 1997, President Clinton announced a plan, “Initiative to Ensure the Safety of Imported and Domestic Fruits and Vegetables”, to provide further assurance that fruits and vegetables consumed by Americans, whether grown domestically or imported from other countries, meet the highest health and safety standards. As part of this initiative, the President directed the Secretary of Health and Human Services, in partnership with the Secretary of Agriculture and in close cooperation with the agricultural community, to issue guidance on GAP and good manufacturing practices (GMPs) for fruits and vegetables.

The produce guide, GAPs and GMPs are guidance and not regulations.

The guide was one of the first steps under President Clinton’s produce safety initiative to improve the safety of fresh produce as it moves from the farm to family. The guide covers production and packing of fresh produce. However, the food safety initiative is not limited to the farm. It focuses on all stages of the farm-to-table food chain. For example, the Food and Drug Administration’s (FDA) Food Code provides advice and information to state and local agencies about safe food handling practices in grocery stores, institutions, restaurants and other retail establishments.

FDA is also actively seeking assistance from the Conference for Food Protection in identifying practical interventions that may assist in reducing or eliminating microbial contamination of fresh produce at the retail level. In addition, as part of the food safety initiative, educational outreach programs, such as the “Fight Bac” campaign, will promote improved safe food handling by consumers.

Bioterrorism Act

Bioterrorism Act Background

The Public Health Security and Bioterrorism Preparedness and Response Act of 2002, otherwise known as the Bioterrorism Act, requires domestic and foreign facilities to register with FDA if they manufacture, process, pack or hold food for human or animal consumption in the U.S. The purpose of registration is to

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provide FDA with sufficient and reliable information about food and feed facilities. Examples of FDA-regulated foods include fruits and vegetables, fish and seafood, dairy products and shell eggs.

Both domestic and foreign farms do not need to register if they fall within the following criteria established by FDA:

Facilities that pack or hold food, provided that all food used in such activities is grown, raised or consumed on that farm or another farm under the same ownership.

Facilities that manufacture/process food, provided that all food used in such activities is consumed on that farm or another farm under the same ownership.

By this definition, packing houses that pack foods other than those owned by them need to register. The Bioterrorism Act makes failure to register a prohibited act. In August 2006, FDA published a revised Compliance Policy Guide (CPG).

FDA Facility Registration Forms

Online http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/RegistrationofFoodFacilities/default.htm

Printable http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/RegistrationofFoodFacilities/ucm073728.htm

GAPs Info

Eight basic principles for reducing the risk of microbial contamination in fresh produce provide the first steps to enhance the safety of domestic and imported produce. By addressing common areas of concern in the growing, harvesting, sorting, packing and distribution of fresh produce, growers will be better prepared to recognize and address the principal elements known to give rise to microbial food safety concerns. Developed by the Food and Drug Administration, the “Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and Vegetables” sets forth these principles and is a comprehensive resource for the foundation of the Good Agricultural Practices.

GAPs Basics

Eight Basic Principles of Good Agricultural Practices (GAPs)

By identifying basic principles of microbial food safety within the realm of growing, harvesting, packing and transporting fresh produce, growers will be better prepared to recognize and address the principal elements known to give rise to microbial food safety concerns.

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1. Prevention of microbial contamination of fresh produce is favored over reliance on corrective actions once contamination has occurred.

2. To minimize microbial food safety hazards in fresh produce, growers, packers or shippers should use good agricultural and management practices in those areas over which they have control.

3. Fresh produce can become microbiologically contaminated at any point along the farm-to-table food chain. The major source of microbial contamination with fresh produce is associated with human or animal feces.

4. Whenever water comes in contact with produce, its source and quality dictates the potential for contamination. Minimize the potential of microbial contamination from water used with fresh fruits and vegetables.

5. Practices using animal manure or municipal biosolid wastes should be managed closely to minimize the potential for microbial contamination of fresh produce.

6. Worker hygiene and sanitation practices during production, harvesting, sorting, packing and transport play a critical role in minimizing the potential for microbial contamination of fresh produce.

7. Follow all applicable local, state and federal laws and regulations, or corresponding or similar laws, regulations or standards for operators outside the U.S., for agricultural practices.

8. Accountability at all levels of the agricultural environment (farm, packing facility, distribution center and transport operation) is important to a successful food safety program. There must be qualified personnel and effective monitoring to ensure that all elements of the program function correctly and to help track produce back through the distribution channels to the producer.

GAPs Guides

Guide to Minimize Microbial Food Safety Hazards for Fresh Fruits and VegetablesThis guidance document addresses microbial food safety hazards and good agricultural and management practices common to the growing, harvesting, washing, sorting, packing and transporting of most fruits and vegetables sold to consumers in an unprocessed or minimally processed (raw) form. http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/ProduceandPlanProducts/ucm064574.htm

Food Safety Begins on the Farm Cornell’s picture-filled booklet and explanation of GAPs for growers. (2000); http://www.gaps.cornell.edu/Educationalmaterials/Samples/FSBFEngMED.pdf

Audits & Plans

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The objective of an audit is to identify, review, confirm or document food safety procedures and practices. Third party auditor companies and government agencies provide audits for GAP certification. Developing, implementing and auditing a food safety plan are essential steps in obtaining GAPs certification and can reduce both health and business risks for consumers and growers.

Self-AuditsThe self-audit allows you to assess the Good Agricultural Practices in use in your business. The objective of a self-audit is to identify, review, confirm or document food safety procedures and practices. Self-audit checklists contain questions that will be asked during the on-site audit and is an excellent pre-audit tool for growers, packers, processors and distributors.

USDA Audit Checklist http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5050869The checklist that a USDA auditor would use when conducting a GAPs certification audit, showing areas of inspection and requirements for passing the audit.

Food Safety Plans

Food safety is taking center stage in America. Consumers and retailers are demanding accountability when it comes to producing, buying and selling fresh produce. Developing, implementing and auditing a food safety plan are essential to Good Agricultural Practices, and it can reduce both health and business risks for consumers and growers.

Good Agricultural Practices – Fresh Produce Safety Plan for Field Practices This document, developed by N.C. State, provides a framework for growers to develop their own food safety plans. Before attempting to develop a plan, growers should obtain training in GAPs offered by N.C. Cooperative Extension or another training organization.

PDF - http://ncsu.edu/enterprises/ncfreshproducesafety/files/2010/02/fps-plan-template.pdf

MS Word - http://ncsu.edu/enterprises/ncfreshproducesafety/files/2010/02/fps-plan-template.docx

Hazard Analysis and Critical Control Point (HACCP)

Current HACCP plan principles and guidelines were adopted August 14, 1997 by the National Advisory Committee on Microbiological Criteria for Foods (NACMCF). This committee is comprised of participants from the USDA Food Safety and Inspection Service, Department of Health and Human Services, the Department of Commerce, the Department of Defense, academia, industry, and state employees. NACMCF provides guidance and recommendations to the Secretary of Agriculture and the Secretary of Health and Human Services regarding the microbiological safety of foods.

Guidelines for Application of HACCP P rinciples

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Introduction

HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical hazards. These hazards are addressed from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished product. For successful implementation of a HACCP plan, management must be strongly committed to the HACCP concept. A firm commitment to HACCP by top management provides employees with a sense of the importance of producing safe food.

Prerequisite programs such as current Good Manufacturing Practices (GMPs) are an essential foundation for the development and implementation of successful HACCP plans. Food safety systems based on HACCP principles have been successfully applied in food processing plants, retail food stores, and food service operations. The seven principles of HACCP have been universally accepted by government agencies, trade associations and the food industry around the world. Seven basic principles are employed in the development of HACCP plans, including:

Principle 1: Conduct a hazard analysis.

Principle 2: Determine the critical control points (CCPs).

Principle 3: Establish critical limits.

Principle 4: Establish monitoring procedures.

Principle 5: Establish corrective actions.

Principle 6: Establish verification procedures.

Principle 7: Establish record-keeping and documentation procedures.

Under such systems, if a deviation occurs indicating that control has been lost, the deviation is detected and appropriate steps are taken to reestablish control in a timely manner. This assures that potentially hazardous products do not reach the consumer.

Prerequisite Programs

The production of safe food products requires that the HACCP system be built upon a solid foundation of prerequisite programs. Each segment of the food industry must provide the conditions necessary to protect food while it is under their control. This has traditionally been accomplished through the application of GMPs. These conditions and practices are now considered to be prerequisite to the development and implementation of effective HACCP plans. Prerequisite programs provide the basic environmental and operating conditions that are necessary for the production of safe, wholesome food. Many of the conditions and practices are specified in federal, state and local regulations and guidelines (e.g., GMPs and Food Code).

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The existence and effectiveness of prerequisite programs should be assessed during the design and implementation of each HACCP plan. All prerequisite programs should be documented and regularly audited. Prerequisite programs are established and managed separately from the HACCP plan. Certain aspects, however, of a prerequisite program may be incorporated into a HACCP plan. For example, many establishments have preventive maintenance procedures for processing equipment to avoid unexpected equipment failure and loss of production. The following are examples of common prerequisite programs:

Facilities: the establishment should be located, constructed and maintained according to sanitary design principles. There should be linear product flow and traffic control to minimize cross-contamination.

Supplier Control: each facility should assure that its suppliers have in place effective GMP/GAP and food safety programs. These may be the subject of continuing supplier guarantee and supplier HACCP system verification.

Specifications: there should be written specifications for all ingredients, products, and packaging materials. Production Equipment: all equipment should be constructed and installed according to sanitary design principles. Preventive maintenance and calibration schedules should be established and documented.

Cleaning and Sanitation: all procedures for cleaning and sanitation of the equipment and the facility should be written and followed. A master sanitation schedule should be in place.

Personal Hygiene: all employees and other persons who enter the manufacturing plant should follow the requirements for personal hygiene.

Training: all employees should receive documented training in personal hygiene, GMP, cleaning and sanitation procedures, personal safety, and their role in the HACCP program.

Chemical Control: documented procedures must be in place to assure the segregation and proper use of non-food chemicals in the plant. These include cleaning chemicals, fumigants, and pesticides or baits used in or around the plant.

Receiving, Storage and Shipping: all raw materials and products should be stored under sanitary conditions and the proper environmental conditions such as temperature and humidity to assure their safety and wholesomeness.

Traceability and Recall: all raw materials and products should be lot-coded and a recall system in place so that rapid and complete traces and recalls can be done when a product retrieval is necessary.

Pest Control: effective pest control programs should be in place.

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Other examples of prerequisite programs might include quality assurance procedures; standard operating procedures for sanitation, processes, product formulations and recipes; glass control; procedures for receiving, storage and shipping; labeling; and employee food and ingredient handling practices.

Education and Training

The success of a HACCP system depends on educating and training management and employees in the importance of their role in producing safe foods. This should also include information on the control of foodborne hazards related to all stages of the food chain. Employees must first understand what HACCP is and then learn the skills necessary to make it function properly. Specific training activities should include working instructions and procedures that outline the tasks of employees monitoring each CCP.

Management must provide adequate time for thorough education and training. Personnel must be given the materials and equipment necessary to perform these tasks. Effective training is an important prerequisite to successful implementation of a HACCP plan.

Developing a HACCP Plan

The format of HACCP plans will vary. In many cases the plans will be product and process specific. However, some plans may use a unit operations approach. Generic HACCP plans can serve as useful guides in the development of process and product HACCP plans; however, it is essential that the unique conditions within each facility be considered during the development of all components of the HACCP plan.

In the development of a HACCP plan, five preliminary tasks need to be accomplished before the application of the HACCP principles to a specific product and process:

1. Assemble the HACCP team2. Describe the Food and its Distribution3. Describe the Intended Use and Consumers of the Food4. Develop a Flow Diagram that Describes the Process5. Verify the Flow Diagram

Examples of HACCP Records

A. Ingredients for which critical limits have been established. 1. Supplier certification records documenting compliance of an ingredient with a critical

limit.

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2. Processor audit records verifying supplier compliance.

3. Storage records (e.g., time, temperature) for when ingredient storage is a CCP.

B. Processing, storage and distribution records

1. Information that establishes the efficacy of a CCP to maintain product safety.

2. Data establishing the safe shelf life of the product; if age of product can affect safety.

3. Records indicating compliance with critical limits when packaging materials, labeling or sealing specifications are necessary for food safety.

4. Monitoring records.

5. Verification records.

C. Deviation and corrective action records.

D. Employee training records that are pertinent to CCPs and the HACCP plan.

E. Documentation of the adequacy of the HACCP plan from a knowledgeable HACCP expert.

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CHAPTER 10 – Budgets

The project will need to develop budgets for equipment acquisition and installation, as well as a pro-forma three-year operation budget. In addition, organizers have decided that the project will be able to recruit and train more farmers by making available certain shared-use farm implements that will support specialty crop production at the farm level. The project is fortunate to have already secured substantial support from a variety of sources including the NC Specialty Crops Block Grant (NC SCBG) and the Town of Burnsville’s N.C. Rural Center STEP Program. Several other grants and contributions are pending at the time of this report’s preparation.

Equipment Needs

Before opening for services, the project will need to acquire and install basic operating equipment. Over the course of operations in the first two years, additional equipment is likely to be identified that will increase efficiency, product quality, and the types of produce that can be handled and packaged. For example, to cost considerations, researchers do not recommend installation of a walk-in freezer in the first year. However, freezer storage for meats and value-added products are likely to be in demand as the project develops markets and demand for a larger variety of products.

Initial first year equipment needs for aggregation facility operations are presented in the table below:

Aggregation Center Equipment Needs, Year OneEquipment Cost Estimate Secured Source Remaining

UnsecuredRefrigerated Truck $ 60,000 $ - TBD $ (60,000)Walk-in Coolers and Blast Chiller

$ 48,231 $ 33,000 NC SCBG $ (15,231)

Wash/Pack/Sort Line (2)

$ 14,660 $ 18,000 NC SCBG $ 3,340

Commerical Shelving and Tables

$ 4,000 $ 4,000 NC STEP $ -

Commercial Food Grade Shelving

$ 4,000 $ 4,000 NC STEP $ -

Hand Trucks (3) $ 750 TBD $ (750)Equipment subtotal $ 132,641 $ 59,000 $ (73,641)Equipment Shipping and Installation (10%)

$ 17,472 TBD $ (17,472)

Total $ 150,113 $ 59,000 $ (91,113)

Equipment descriptions

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Initial outlay for a refrigerated truck for consolidated product delivery is estimated to be around $60,000. Project leaders have contemplated seeking support for purchasing a small refrigerated truck for local distribution. Potential support for this purchase may come from the NC Tobacco Trust Fund Corporation.

Installation of a 10’X10’ Walk-in Cooler, a 10’X10’ Forced Air Cooler and a 10’X20’ Walk-in Cooler is estimated at $48,231. Estimate is inclusive of panels, doors, flooring and compressors. Refrigeration units will require professional electrical installation prior to beginning use. This estimate was provided by Mr. Bruce Cook from B Cook Services, Inc., a refrigeration expert from Black Mountain, NC.

Two Market Farm Implements produce wash lines will need to be purchased for the facility at $7,330 each for a total expenditure of $14,660. Purchase includes (2) four piece wash lines at $3,400 each, (3) sizers at $615 each, (3) side packing tables at $110 each and (3) side conveyors at $575 each.

Commercial food grade shelving for storage in the facility will be necessary. Expenditure for this line item is estimated at $4,000 and will be provided for through Burnsville’s NC STEP finances.

Three hand trucks for movement of produce within the aggregation facility will also be necessary. These may be purchased for around $250 each for a total expenditure of $750 for this line item.

The project is also interested in providing rental equipment at affordable rates to help small farmers expand and to entice new farmers who may not be able to afford the outlay of initial equipment costs. These are presented below:

Farm Equipment Needs, Year OneEquipment Cost Estimate Secured Source Remaining

UnsecuredLarge Trailer for Equipment (4)

$ 11,200 $ - TBD $ (11,200)

Irrigation System (4)

$ 8,000 $ - TBD $ (8,000)

BCS Walk-behind Tractor

$ 8,000 $ - TBD $ (8,000)

Compact Raised Bed Mulcher (4)

$ 7,800 $ - TBD $ (7,800)

Model 1600 Planter (2)

$ 4,524 $ - TBD $ (4,524)

Plastic Mulch Lifter (2)

$ 4,160 $ - TBD $ (4,160)

Small Trailer for Equipment

$ 2,400 $ - TBD $ (2,400)

Farm Equipment Total $ 46,084 $ -

$ (46,084)

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This equipment includes one small trailer for equipment at $2,400 (4) large trailers for equipment at $2,800 each for a total of $11,200, (4) irrigation systems at $2,000 each for a total of $8,000, a BCS Walk-behind tractor for $8,000, (4) compact raised bed mulchers at $1,950 each for a total of $7,800, (2) model 1600 planters at $2,262 each for a total of $4,524, and (2) plastic mulch lifters at $2,080 each for a total of $4,160. The total anticipated expenditure for this aspect of the project is $46,084.

Operational BudgetA three-year proforma operational budget is presented as follows (Numbers are in general format for spacing purposes):

Facility Operations Three-Year Proforma BudgetFacility Operations Year 1 Year 2 Year3 3-Year

TOTALSecured Funds

Remaining

TRACTOR General Manager 25000 25000 25000 75000 20000 -55000Facility Annual Rent 30000 30000 30000 90000 30000 -60000Processing supplies and materials 8000 8000 8000 24000 8000 -16000Utilities Costs 6000 6000 6000 18000 6000 -12000Working Capital 10000 0 0 10000 -10000Professional services 2500 2500 2500 7500 5000 -2500Website Development and Maintenance 1000 250 250 1500

Maintenance and servicing of machinery/equipment 2500 2500 2500 7500 -7500Office Supplies/Software 5500 500 500 6500 6000 -500Liability Insurance 2500 2500 2500 7500 6000 -1500Workmen’s Comp Insurance 1000 1000 1000 3000 -3000Hourly Labor 2500 2500 2500 7500 -7500Sewer Tap Fee 2510 0 0 2510 0 -2510Water Tap Fee 2400 0 0 2400 0 -2400Point of Sale Promotion Materials 500 500 500 1500 -1500

Training and educational outreach costs 500 500 500 1500 -1500Travel 1000 1000 1000 3000 -3000Truck Maintenance and Fuel 2500 2500 2500 7500 -7500

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Facility Operations Subtotal 105910 85250 85250 276410 81000 -193910

Expense line items for Facility Operations are described as follows:

The general manager starting salary is estimated at $25,000 per year for a total of $75,000 in the first three years of facility operations. It is recommended that the manager work under contract until sales are sufficient for the project to directly support this position.

Facility rent is fixed at $30,000 per year for a total of $90,000 over the course of three years. Yancey County government has committed to funding rent for a minimum of one year.

Processing supplies and materials needs are estimated at $8,000 per year for a total of $24,000 over the first three years of facility operations. Supplies and materials include, but are not limited to, boxes and packaging for farmer cost share. Boxes and packaging will be needed for the project to establish name recognition among retail and institutional buyers. Discussions with project leaders at Madison Family Farms indicate that some initial grant support for boxes is an enticement for farmers to participate. MFF has been able to provide a 1-to-1 cost-share with farmers, reducing the average cost to the farmers for case boxes from $1.80 each to $.90. This is understood by farmers to be a short-term benefit, and full pricing of packages will be deducted from purchases of produce from farms in the future. Once the value of the project is fully established among farms, most have no problems accepting the costs of doing business.

Utility costs for the facility are estimated at $6,000 per year for a total of $18,000 over the course of three years of facility operations. Utilities include, but are not limited to, 208 three-phase electricity, water and sewer, internet and telephone.

Working capital costs are estimated at $10,000 to be secured in the first year of facility operations. The project is recommended to secure $10,000 in working capital for the purchase of produce from participating farmers. Madison Family Farms has stated that their ability to pay for produce in a short period of time, even when buyers demand net-30 payment terms, is the most attractive feature for enticing farms to participate. These funds will be used many times over and should never be depleted as long as the project only pays farmers for produce that is already ordered or certain of being sold.

Professional service costs are estimated at $2,500 per year for a total of $7,500 in the first three years of facility operations. Professional services include, but are not limited to, legal assistance, professional accounting services, and to hire a consultant in Good Agricultural Practices to help the aggregation site achieve GAP certification and to allow area farms to better understand the process of GAP certification at the farm level. The project should also have a professional website with current information about product availability. Websites are increasingly becoming a key component of successful marketing campaigns. For example, web-based advertising can drive interested consumers to the website as a click-through option.

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Maintenance and service of equipment and machinery is estimated at $2,500 per year over the first three years of facility operations for a total of $7,500. Equipment and machinery that may require routine maintenance may include cooler compressors, wash lines, office equipment, overhead lamps, lift gate, and wall fan. This total also includes estimated maintenance and fuel costs for a refrigerated delivery truck for the facility.

Office supply costs are estimated at $2,000 per year for a total of $6,000 over the first three years of facility operations. These costs are covered by a $6,000 contribution from Burnsville’s participation in the NC Rural Center’s Small Town Economic Prosperity (NCSTEP) program. Supplies include, but are not limited to, paper, pens, pencils, computers, and printers.

The project must buy product liability insurance, with a minimum coverage of $2 million. This is a requirement for almost all large institutional and retail accounts. The estimated cost of this coverage is $1,000 per year for a total of $3,000 over the first three years of facility operations.

Hourly labor of $2,500 per year will pay part-time and after-school labor needed in peak harvest seasons, and is calculated at 20 hours per week for approximately three month. Labor may be supplied by high school and community college students involved in vocational agriculture programs. Mountain Heritage High School’s FFA director Chad Ayers has students who may assist in operating the wash line, making deliveries and conducting direct retail and point-of-sale promotional activities.

Workman’s Compensation Insurance will be required for the project and is estimated at $1,000 per year for a total of $3,000 over the first three years of facility operations.

Sewer and water tap fees required in order to begin facility operations are estimated at $2,510 and $2,400, respectively. These figures are slightly inflated due to the fact that the facility is just outside the borders of the Town of Burnsville, placing it technically in the out-of-town pricing structure. Conversations are underway with town government to agree to pricing equivalent to their in-town prices. As a result, these prices may in fact be much lower.

Training and education outreach costs for the facility are estimated at $500 per year for a total of $1,500 over the first three years of facility operations. Long term success of the project relies on successful training and education to meet market demands as well as achieve required certifications at both the farm production and aggregations and marketing levels. This will also help fund project manager sales calls in his or her personal vehicle.

Funding Needs and Sales Goals

The three year proforma operating budget is estimated at $280,910. Of this amount, $81,000 is already secured from county appropriations and grants, leaving a current shortfall of $198,410 for the three year period. In fact, almost all committed funds are allocated for the first year of operations, which leaves a

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first year shortfall of $26,410. The remaining needed funds can be secured by grants as discussed in the funding strategy chapter.

After the first year, base operational costs are expected to stabilize at an estimated annual cost of $85,250. Of this amount, project organizers will work towards ongoing county appropriations for rent of $30,000 per year. This leaves a remaining fixed annual operational cost of approximately $55,250 per year.

Long-term success of this project relies on a successful marketing campaign to increase public recognition of the project as one, but not the sole, purveyor of all-local produce to the region. Point-of-sale materials with the project logo, photographs of participating farmers and a statement of mission will allow consumers at supermarkets to differentiate the center’s produce from other suppliers. Table cards set out at dining facilities in hospitals and schools and in restaurants will be effective in establishing institutions as supporters of local food. A budget of $3,000 for production of point-of-sale materials is recommended.

The project is recommended to purchase a small 10’ x 10’ tent for direct-marketing events. If possible, the tent should be detailed with the project logo. An EZ-Up tent of this size can be obtained for approximately $200.

By year three, most core operating expenses for project management, labor, accounting, travel and lease of a refrigerated truck should be covered by proceeds from sales. At a 20 percent charge for services, sales of $200,000 in produce should generate $40,000 for operational support.

It is very difficult to make predictions on future sales volumes and dollar values. Revenues exceeding expenses should be re-invested in the project, such as helping to acquire ownership of a small refrigerated truck and additional packaging and washing equipment to enhance services to farmers.

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CHAPTER 12 - Marketing a Local Food Movement:

A key strategy in making TRACTOR successful is marketing the concept of local foods to consumers in Yancey and Mitchell Counties. Marketing, however, should be understood as distinct from sales activities; the goal of marketing is to establish long-term product identification and the association of TRACTOR with concepts of freshness, quality, locality and sustainability. Within two years, TRACTOR should have name and brand identification among a high percentage of food shoppers in the area.

The Toe River Valley is located in a region with a growing food movement, but does not have many existing organizations dedicated to promoting food choices. The project is fortunate to be located within a region with a strong, vibrant food scene. There are many talented individuals and organizations in the region to help TRACTOR take advantage of the local foods movement. The project may capitalize upon the increased awareness of local food availability, especially through collaboration with the Appalachian Sustainable Agriculture Project (ASAP). Since ASAP has resources for marketing cost-share, TRACTOR should work closely with ASAP for the development of a local food campaign. The project should engage in a permanent marketing campaign as a local purveyor, but not the sole purveyor, of local foods. Two ASAP resources that the project should consider getting involved with are the Local Food Guide and the Appalachian Grown Program.

The Local Food Guide is a free print and online directory to family farms, farmers, tailgate markets, wineries, grocers, restaurants, caterers and bakers, farm stores and stands, farms to visit, B&Bs and farm lodging, apple farms, u-pick farms, CSAs, and distributors in the Southern Appalachians. To get in the guide, go to the following link to begin the registration process: http://www.buyappalachian.org/guide.

The Appalachian Grown symbol is displayed with farm products grown or raised in Western North Carolina and the Southern Appalachian Mountains. When consumers see the Appalachian Grown logo, they know they are buying fresher foods that support family farms, strengthen the local economy, preserve rural culture, and protect the region's natural beauty. Individual farms, farmer groups and tailgate markets may apply for certification. Restaurants, distributors, and grocers that purchase Appalachian Grown certified products, may become Appalachian Grown Partners. Currently, participation in the program is free. Farms and businesses in these areas are eligible. Online resources for certification can be found at: http://www.asapconnections.org/agmaterials.html.

ASAP Contact Information:Charlie Jackson, Executive Director306 West Haywood Street Asheville, NC 28801Voice: 828-236-1282Fax: 828-236-1280

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Cross marketing opportunities with Madison Family Farms and Pilot Mountain Pride should also be investigated. To the extent that the project has surplus produce that can fulfill MFF or PMP needs, TRACTOR should strive to sell what it can to these organizations.

A good first step for TRACTOR is establishment of a logo. The logo should clearly indicate the organization they represent, appear vibrant and easily recognizable, reference the local food movement and signify the region. One example of language that could accompany the imagery is: “TRACTOR: Supporting Toe River Valley Farmers”.

The logo should be used at all marketing events and on all materials used by the project, including letterhead, produce boxes and point-of sale-marketing materials.

In an age of unprecedented access to communications, marketing a brand identity for a defined geographic region does not require a significant amount of money for paid advertising. Many affordable tools are available to the project for marketing, including free media through newspapers and weeklies, news stories on local television instigated by the project leadership and web-based marketing through social networking sites such as Facebook. A professionally designed and maintained website is also required. Project leaders should consider purchasing domain names for the project. A sample of available TRACTOR names as surveyed on GoDaddy.com includes the following:

1. www.tractoronline.org 2. www.toeriverag.com 3. www.tractorag.org 4. www.toeriveragcenter.org 5. www.toeriveragcenter.com

The website will have the organization’s mission statement, history, leadership contact information and a seasonal availability report that should be regularly updated. Profiles of participating farms also should be considered. The TRACTOR manager should learn simple FTP upload procedures for updating time-sensitive information, but rely on an IT professional for ongoing support and design services.

Consideration was given to using a web portal for secure ordering from TACTOR buyers. While this may be developed in the future, the researcher recommends conducting sales and receiving orders via phone, fax and email. The project manager will need to have regular email service and check for emails at least twice a day. The website will primarily be used as a marketing tool and not for handling sales and orders.

TRACTOR should develop press releases for news and other media outlets announcing the formationof the organization and its mission to provide fresh, wholesome local foods for regional consumers.Regular seasonal availability lists (without prices) should be sent to news media to gain increased exposure. Traditional local newspapers in Yancey County include the Yancey County News, Yancey Common Times News, and Yancey Times Journal. Major Mitchell County newspapers include the Mitchell News-Journal.

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One effective way of increasing awareness of local foods is by enlisting support from colleges, student organizations and other nonprofits committed to sustainability or support for local businesses. Non-commercial radio is a good venue from which to get listener exposure. Most area colleges host NPR or student radio stations. Program directors at these stations should be contacted to develop stories on TRACTOR and local foods in the Toe River region. These include:

WNCW 88.7 FM, Isothermal Community CollegeWCQS 88.1 FM, Asheville

Extension has also met and worked with Dr. Stuart Rosenfeld, founder of Regional Technology Strategies, Inc. Dr, Rosenfeld has done work nation and worldwide in the concepts of “Sustainable Food Systems Cluster”. Extension is also working closely with Mayland Community College in this area with Dr. Rosenfeld.

Development of point-of-sale promotional materials will increase consumer recognition of TRACTOR and also clearly differentiate TRACTOR produce from competitors selling non-local commodity fruits and vegetables. Other organizations elsewhere in the state have succeeded in developing point-of-sale materials that include a description of the farm source of produce for sale, along with portrait photographs of the farmer or farm family. Supermarkets are often willing collaborators in developing these materials that both promote the local suppliers and identify the retailer as a supporter of local foods. Such collaborative strategies forge closer working relationships between the buyer and seller and may allow for premium prices that can be shared by the vendor and the retailer. In cafeterias at hospitals and schools, point-of-sale materials can be used as table-top presentations and on buffet lines. Restaurants that support local foods are sometimes willing to develop menus that tell customers where they source local food, how sustainable production methods are used and why buying local benefits community and individual wellbeing. TRACTOR should consider having a presence at all major festivals and fairs in the region, as well as Yancey County Farmers Market and Spruce Pine NC Farmers Market.

Equipment needed includes a festival tent, tables and a small propane grill or cooking apparatus. While some retail sales opportunities may exist at these events, the greater value will be in promoting TRACTOR and raising public awareness of the organization. Ideally, consumers who learn about TRACTOR will ask their grocer, favorite restaurant or affiliated institution to begin carrying TRACTOR products.

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CHAPTER 13 – Funding Strategy and Sustainability Plan

As discussed in the budget chapter, ongoing annual operational costs, excluding rent, are estimated at $55,250. As much as possible, operational costs should be covered by sales of produce with an expected gross profit of 20% for wholesale sales. In practice, the project should be able to generate significantly higher gross margin for sales to consumer subscriptions, direct retail sales, and small ongoing sales to local restaurants.

Furthermore, the financial stability of this project will depend on sponsorships and fundraisers. The researchers believe that sponsorships of $10,000 per year can be attainable from businesses selling goods and services to the farm community, farm advocacy organizations such as Yancey County Farm Bureau, and concerned citizens. Annual fundraisers held at the facility, including pig pickings, bluegrass jams, raffles, and other events can secure between $7,500 and $10,000 annually.

With the above scenarios, approximately $36,000 will need to be generated from sales of produce. A subscription CSA costing $100 per subscription could feasibly be sold to 200 households in Yancey and Mitchell Counties annually. With a 50% gross margin, a community-supported program can net the project an estimated $6,600 annually. Another $10,000 in direct retail sales, with a 100% markup, and net the project $5,000.

This leaves a remaining 24,400 in revenues that will need to be generated from wholesale transactions. With 20% of gross wholesale retained by the project, a wholesale sales goal of $122,000 should be achievable after the third year of operations.

Researchers recommend TRACTOR secure all operational costs for a 2-3 year period to achieve self sufficiency without eating into project revenues. The following are available resources for potential future funding of a local produce aggregation, sales and processing center. They include state, federal, and private foundation grant resources and alternative funding methods.

State Resources and the State Budget

Some projects have secured funding support from their state legislators and governors as an appropriation directly from their state budgets. TRACTOR members should enlist support from the region’s state Senate and House members to secure all funding which might be available through North Carolina's appropriation process.

State House Contacts: Representative Phillip Frye639 Legislative Office Building,

Raleigh, NC 27603-5925Tel: (919) 733-5661Email: phillip.fyre@ncleg.net

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Representative Ray Rapp1013 Legislative Building,

Raleigh, NC 27601-1096Tel: (919) 733-5732Email: ray.rapp@ncleg.net

State Senate Contact: Senator Harris Blake517 Legislative Office Building, Raleigh, NC 27603-5925Tel: (919) 733-4809Email: harrisb@ncleg.net

The most recent state budget can be accessed in its entirety at www.ncleg.net. Project staff will benefit by scrutinizing this massive document by using keyword searches, including keywords of “Yancey,” “economic development,” and specific sections on state agencies mentioned in this document.

Following are several state agencies and organizations that can provide resources to TRACTOR. These are presented in three sections: State Agencies, Master Settlement Agreement Fund Entities, and Other State Resources.

State Agencies

North Carolina Department Of Agriculture & Consumer Services The North Carolina Department of Agriculture and Consumer Services is an agriculture producer-consumer service and regulatory department. Most of its support is available to rural communities and directly to agricultural producers for agri-businesses. The mission of the Department is to ensure the availability of life-sustaining food and natural fiber, free of adulteration and contamination, and produced in a manner consistent with environmentally sound production practices. Programs are operated to benefit consumers and agricultural producers. The Department is primarily a source of technical assistance rather than grant funds.

Contact: Commissioner Steve TroxlerNorth Carolina Department of Agriculture and Consumer Services2 W. Edenton StreetRaleigh, NC 27611(919) 733-7125Email: steve.troxler@ncmail.netWebsite: www.ncagr.com

State Food Business Regulation and Food Handling TrainingThe North Carolina Department of Agriculture & Consumer Services is also the responsible state agency to regulate all food related businesses. The Department inspects and tests food products, seed lots,

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animal feed, drugs and cosmetics to ensure a clean, safe food and drug supply. It regulates the state's food supply through licensing, inspection, sampling, testing, and enforcement.

Contact: Dr. Jennifer Godwin, Food AdministratorNorth Carolina Department of Agriculture & Consumer ServicesFood and Drug Protection Division 1070 Mail Service CenterRaleigh, NC 27699-1070Phone (919) 733-7366

North Carolina Rural Economic Development Center, Inc. The NC Rural Center is a non-profit agency funded largely by the North Carolina General Assembly. Its mission is to study and encourage economic growth in the 88 rural counties of North Carolina.

Contact: Billy Ray Hall, PresidentN.C. Rural Economic Development Center

4021 Carya Drive Raleigh, NC 27610 Telephone: (919) 250-4314

Fax: (919) 250-4325Email: info@ncruralcenter.orgWebsite: www.ncruralcenter.org

The Rural Center has grown in size and scope in recent years, to the point where it functions almost like an independent Department of Rural Affairs for State Government. It has a variety of duties involved with economic development and a host of funding programs. Rural Center programs tend to vary from one state budget to another. Programs are often modified to target specific economic imperatives of state government with regards to rural communities.

Following are a list of programs that may be of benefit to TRACTOR’s efforts:

North Carolina Economic Infrastructure FundThe North Carolina Economic Infrastructure Program funds rural infrastructure projects associated with an expanding business or a new business location. These projects must lead directly to new, full-time jobs in the private sector. Only units of local government may apply. Generally, for water and sewer, natural gas and broadband, grants are available for up to $10,000 for each job created, with a maximum grant of $1 million or one-half the total project cost.

Agricultural Advancement Consortium Research Grant ProgramThe Agricultural Advancement Consortium is housed at the Rural Center. The Consortium’s research grant program provides funds to non-profit organizations and government agencies to conduct innovative projects in areas such as the development of alternative and specialty crops, value-added

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production and marketing; the development of structures to support the future of farming such as producers and growers cooperatives; projects to serve minority and undeserved farmers; and the development and use of technology such as the Internet in agriculture.

Contact: Billy Guillet, Director Agricultural Advancement Consortium N.C. Rural Economic Development Center 4021 Carya Drive Raleigh, NC 27610 Telephone: (919) 250-4314

Fax: (919) 250-4325

North Carolina Agricultural Development and Preservation Trust FundThe purpose of the fund is to support the farming, forestry, and horticulture communities within the agriculture industry by supporting the purchase of agricultural conservation easements (on farm, forest, and horticulture lands), including transaction costs; funding public and private enterprise programs that will promote profitable and sustainable family farms through assistance to farmers in developing and implementing plans for the production of food, fiber, and value-added products, agritourism activities, marketing and sales of agricultural products produced on the farm, and other agriculturally related business activities; funding conservation agreements (on farm, forest, and horticulture lands) targeted at the active production of food, fiber and other agricultural products. All applicants must be non-profit conservation organizations or county agencies.

Contact: Dewitt Hardee, Program DirectorNC Agricultural Development and Preservation Trust Fund1001 Mail Service CenterRaleigh, NC 27699-1001Telephone: (919) 707-3069Email: dewitt.hardee@ncagr.gov

Master Settlement Agreement Fund Entities

In November of 1998, the attorneys general of 46 states signed an agreement with four of the nation's largest cigarette manufacturers. This settlement is referred to as the Master Settlement Agreement (MSA). The MSA commits these tobacco manufacturers to pay approximately $206 billion to the 46 states over 25 years. North Carolina’s share was estimated to be approximately $4.6 billion over the 25 year period. The North Carolina General Assembly created three different programs to distribute the State's share of these funds.

1. Golden LEAF Foundation, a non-profit corporation, receives 50% of the funds directly from cigarette manufacturers and makes grants for economic development in tobacco dependent and economically distressed communities.

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2. Health and Wellness Trust Fund, a state agency received, 25% of the funds and makes grants for health-related programs. The Health and Wellness Trust Fund has since been eliminated.3. Tobacco Trust Fund Commission, a state agency, received the remaining 25% allocation. The TTFC has currently been delinked from the Master Settlement agreement. It has received a non-recurring legislative appropriation of $2,000,000.

1. The North Carolina Golden Leaf Foundation The Golden LEAF (Long-term Economic Advancement Foundation) was created in 1999 as a non-profit corporation by Court Order in the consent decree resolving litigation initiated by the North Carolina Department of Justice. It receives one half of the funds coming to North Carolina resulting from the Master Settlement Agreement (MSA) and makes grants to non-profit and government agencies. Golden Leaf’s current endowment is approximately $500 Million and is expected to grow to over $2 Billion by 2020.

The mission of the Golden Leaf is to improve the economic and social conditions of North Carolina's people. To implement its mission, the Foundation has a rolling cycle with a deadline for applications of August 1.

Contact: Dan Gerlach, PresidentGolden Leaf Foundation

301 North Winstead Avenue Rocky Mount, NC 27804 Telephone: (252) 442-7474

Fax: (252) 442-7404Email: info@goldenleaf.orgWebsite: www.goldenleaf.org

2. The North Carolina Tobacco Trust Fund CommissionThe Tobacco Trust Fund Commission (TTFC) is a state agency created by the North Carolina General Assembly in 2000 to assist tobacco growers, allotment holders, individuals displaced from tobacco-related employment, and persons engaged in tobacco-related businesses with economic losses resulting from the 1998 Master Settlement Agreement between the Attorneys General and the major cigarette manufacturers. The Commission administers and disburses funds through compensatory programs and qualified agricultural programs.

Contact: William Upchurch, Executive DirectorN.C. Tobacco Trust Fund Commission1080 Mail Service CenterRaleigh NC 27699-1080Telephone: (919) 733-2160Fax: (919) 733-2510Website: www.tobaccotrustfund.org

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Other State Resources

North Carolina Small Business and Technology Development CentersThe North Carolina Small Business and Technology Development Center (SBTDC) helps small business owners meet the challenges of today's business environment, manage that ever-changing world, and plan for the future of their business. The SBTDC provides management counseling and educational services to existing small and mid-sized businesses throughout North Carolina from 17 offices across the state. Each of the offices is affiliated with a college or university. The mission is to help North Carolina businesses grow and create new jobs within the state. Most of the SBTDC services are free of charge.

Contact: Scott Daugherty, Executive DirectorStatewide Headquarters

Small Business and Technology Development Center 5 West Hargett Street, Suite 600 Raleigh, NC 27601-1348 (919) 715-7272

Email: info@sbtdc.orgWebsite: www.sbtdc.org

Federal Funding

Public sources provide the majority of funds required for non-profit project development. A variety of funds are available from the federal government. Public bodies such as Municipal or County Governments, a State agency, or Regional Planning Commission have the most access to public funds.

Elected Federal OfficialsProject leaders should make contact with North Carolina’s elected federal government officials and enlist their support for pursuing federal funds. While most federal sources have open grant application procedures, final decisions on what projects receive funding may often involve persuasion from elected representatives. Specific funding can potentially be obtained in line-item appropriations attached to various bills and annual budgets.

Contact: Congressman Heath ShulerLillington District Office 609 North First Street P.O. Box 1059Lillington, NC 27546 Telephone: (910) 814-0335Fax: (910) 814-2264

Contact: Senator Kay Hagan

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Raleigh Office310 New Bern AvenueRaleigh, NC 27601Telephone: (919) 856-4630Fax: (919) 856-4053

Contact: Senator Richard BurrRocky Mount Office100 Coast Line Street, Room 210Rocky Mount, NC 27804Telephone: (252) 977-9522Fax: (252) 977-9750

United States Department of Agriculture (USDA)USDA has a variety of programs that are suitable for project development. Appropriate USDA programs are accessible through the Rural Development Office of USDA in Raleigh, and directly through USDA in Washington. In most cases, the federal office will direct you to the local department for information. Certain programs such as the Community Food Projects Competitive Grants Program are administered directly from Washington D.C.

USDA: Community Food Projects Competitive Grants ProgramCommunity Food Projects (CFP) are projects designed to increase food security in communities by bringing the whole food system together to assess strengths, establish linkages, and create systems that improve the self-reliance of community members over their food needs. The 1996 Federal Agriculture Improvement and Reform Act (FAIR) established new authority for Federal grants to support the development of Community Food Projects and the Farm Security and Rural Investment Act of 2002 re-authorized the program. CFPs are administered by the USDA’s Cooperative State Research, Education, and Extension Service (CSREES). The program is designed to:

Meet the needs of low-income people by increasing their access to fresher, more nutritious food supplies; Increase the self-reliance of communities in providing for their own food needs; Promote comprehensive responses to local food, farm, and nutrition issues.

These grants are intended to help eligible private non-profit entities that need a one-time infusion of Federal assistance to establish and carry out multi-purpose community food projects. Projects are funded up to $5,000,000 and from one to three years. These are one-time grants that require a dollar for dollar match in resources. Approximately 18% of the submitted proposals have received awards during the history of this program. Funds have been authorized at $5 million per year.

Contact: Dr. Elizabeth TuckermantyUSDA, NIFA1400 Independence Avenue S.W. , Stop 2201

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Washington, D.C. 20250-2201, Telephone: (202) 205-0241 Email: etuckermanty@nifa.usda.govWebsite: www.nifa.usda.gov

USDA: Rural Cooperative Development GrantsThe Rural Business-Cooperative Service make grants for establishing and operating center for rural technology or cooperative development for the primary purpose of improving the economic condition of rural area by promoting commercialization of new services and products that can be produced or provided in rural areas. Grants can be used to develop new processes used in the production of products; and new enterprises that can add value to on-farm production through processing or marketing.

Eligibility is limited to nonprofit corporations, and institutions of higher learning. Grants may be used to pay up to 75 percent of the costs of establishing or operating centers for rural technology or cooperative development. The grant purpose may include such things as technology research, investigations, feasibility studies, dissemination of information, commercialization of new products and processes, training, re-lending, technical assistance, research and support. Maximum awards are $300,000.

Contact: Bruce Pleasant, DirectorRural Business and Cooperative Services4405 Bland Road Raleigh, North Carolina 27609Telephone: (919) 873-2031Email: bruce.pleasant@nc.usda.govWebsite: www.rurdev.usda.gov

USDA: Value-Added Producer Grants (VAPG)Grants may be used for planning activities and for working capital for marketing value-added agricultural products and for farm-based renewable energy. Eligible applicants are independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled producer-based business ventures.

Contact: Bruce Pleasant, DirectorRural Business and Cooperative Services4405 Bland Road Raleigh, North Carolina 27609Telephone: (919) 873-2031Email: bruce.pleasant@nc.usda.govWebsite: www.rurdev.usda.gov

Sustainable Agriculture Research & Education Program (SARE)

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The Southern Region SARE operates a small competitive grant program funded by USDA and EPA to promote research and education about sustainable agriculture. It administers six grants, each with its own set of priorities and audiences. There is an online guide at www.griffin.uga.edu/sare/ that describes their granting process. An organization with an idea that links sustainable agriculture to healthy community development is eligible to apply. Any activity that will increase knowledge, build capacity and make connections between farms and rural communities to the benefit of people who live in those communities fits within the grant guidelines.

Contact: Jeff Jordan, Program Officer Southern Region SARE Office 1109 Experiment St. Room 206, Stuckey Building University of Georgia Griffin Campus Griffin, GA 30223-1797 Telephone: (770) 412-4787

Email: jjordan@griffin.uga.eduWebsite: http://www.griffin.uga.edu/sare/

Private Foundation Support

Local and state-based foundations often provide the first funding for non-profit projects. In many cases, private foundations supply a large portion of project funding for construction, overhead expenses, staff, program development and other aspects of the project. Benefits of foundation support include flexible spending discretion, ease of application, and less intensive reporting and administrative requirements. TRACTOR should first seek out funding from existing foundations within the State of North Carolina, and particularly those that have funded other agriculture-based projects in recent years.

Beyond Yancey County and North Carolina, there are a variety of foundations that support similar projects nationwide. Demonstrating local support will be extremely beneficial for the project in securing funding from larger national foundations, as well as federal government agencies.

The Z. Smith Reynolds FoundationZSR is one of the oldest and most well-established Foundations in North Carolina. The Foundation actively seeks to promote access, equity, and inclusiveness; and to discourage discrimination based on race, ethnicity, gender, age, socioeconomic status, and other factors that deny the essential humanity of all people. ZSR will only fund programmatic support; no construction or equipment acquisition is allowed. The Foundation often seeks to match its contributions to other Foundation awards.

Grant applications are due twice a year, February 1 and August 1.

Contact: Leslie J. Winner, Executive Director

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14 S. Cherry Street, Suite 200Winston-Salem, NC 27106-5287Telephone: (336) 725-7541, x105Email: lwinner@zsr.orgWebsite: www.zsr.org/

Community Foundation of Western North CarolinaA key role of The Community Foundation is to match donor funds with promising projects across Western North Carolina. To help accomplish this, they invite nonprofit organizations to bring their best ideas on how they can improve the quality of life for the region's citizens. Through a careful review process, the Foundation's staff and board work together to award grants that strengthen the nonprofit sector with program and organizational support. Discretionary funds and other resources will target four areas: People in Need, Early Childhood Development, Food and Farming and Preserving Natural and Cultural Resources.

Contact: Virginia Dollar, Program OfficerCommunity Foundation of Western North CarolinaOne West Pack Square, Suite 1600Asheville, NC 28802Telephone: (828) 254-4960, x123Email: dollar@cfwnc.org

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