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Producer
Profitability
Priority Actions:
Profitability
| Economic Development | Marketing
| Trade | Invasive
Species Control | Consolidation | Education
Profitability:
Conclusion :
Need to find ways to improve opportunities for profitability, especially for small- and medium-size producers.
Suggested Action: Here are several ways in which this might be done, using South Florida as an area to test prototype programs:
Find ways to return more of the retail price to the producer
Develop strategies to:
Explore new ways to add value to existing crops and products, new ways to sell existing crops and products, new markets and new commodities, and specialty crops and products that can be produced;
Contributing action recommended by NRCS:
Action : Identify new/more profitable crops
Responsible:
ARS - R&D
Duration:
Long term (2+ years)
Emphasize opportunities for diversification through producing specialty foods; targeting new markets and niche markets; growing new crops; processing Caribbean and off-shore produce; and expanding key segments of the tropical fruit industry, equine industry, aquaculture industry and other existing industries.
Expand visibility of South Florida produce at trade shows;
Improve technical assistance, communications, information delivery, media relations, resource coordination.
Contributing action recommended by NRCS :
Action:
Increase NRCS staffing
Responsible:
NRCS
Duration:
Short term (1-2 years)
Action:
Provide technical assistance
Responsible: NRCS
Duration:
Short term (1-2 years)
Action:
Provide economics training for conservation planners
Responsible:
NRCS
Duration: Long term (2+ years)
Promote diversification.
Agricultural operations that specialize in a single commodity are
vulnerable to economic shocks caused by low prices or bad weather.
Diversification — through planting new crops, shifting to a
different mix of crops and livestock, developing new products or
services, or targeting new markets — can reduce risk and increase
profits. (Note: As Ferdinand F. Wirth, Ph.D., points out that: "the
discussion on ‘Diversification' should recognize that it can be very
difficult for farmers to diversify, especially if they have been
involved with large scale single commodity agriculture. Farmers make
huge capital investments in highly specialized equipment, which can
often only be used on one or two types of crops. Major efforts to
promote diversification will have to include lots of technical
expertise to identify compatible crops and financial assistance to
farmers [low interest loans, etc.] to help with the purchase of
additional equipment." Also, an industry insider points out,
"Farmers farm what they know and what they like to farm, and
sometimes forget to consider what the market will bear.")
Benefit all types and sizes of agricultural operations. However, a high priority should be given to helping small farms, family farms and minority farmers, who often are at a disadvantage in competing with large corporate farms and rarely have the resources necessary to match the actions that corporate farms can take on their own behalf. Public perception and support of this effort also is likely to be more positive if an emphasis is given to the help that is given to small farms, while help given corporate farms is downplayed.
One industry specialist says: "Innovative Ag industries have taken over many of the middleman's functions to deal with the problem identified in the statement that ‘Agriculture is a price taker, not a price maker.' I am aware that only large corporate ag industries have the financial resources to attempt this type of venture, so the solution might be in the consolidation of comparable production units into cooperatives that can be formed specifically for one or more functions. They can be formed to control overproduction; for marketing or distribution; or even as a promotional tool. This will mean more control over the price of the product and it will create a competitive atmosphere in the value-added side of the business."
Expand opportunities for growing and using biocrops to:
produce power,

produce "bioproducts,"
including biodegradable plastics and plant-based activators for chemicals and solvents, to replace petroleum products
provide for carbon sequestering
provide environmental clean up and phytoremediation services
that can be sold to utilities, municipalities and many industries (using plants to filter and clean up storm water, municipal waste, absorb leachates from landfills and turn toxins into clean biomass)

address on-farm and off-farm environmental issues
s timulate rural economic development,

reduce regulatory burdens on agriculture.
Details on these opportunities are contained in a strategic plan jointly prepared by the U.S. Department of Agriculture and U.S. Department of Energy and released on December 11, 2000 The strategic plan, entitled "Fostering the Bioeconomic Revolution in Biobased Products and Bioenergy" was developed in response to Executive Order 13134 and The Biomass Research and Development Act of 2000. It sets forth a series of ambitious steps for increasing the use of biofuels in generating energy and in using plant material to create a broad range of "bioproducts," including replacements for petroleum-based activators used in many chemical compounds on the market. This document should be reviewed for potential commercial applications in the county.
Consider prototype programs to:
Encourage grocery chains to use their vertical pricing indices and other pricing data to develop consumer profiles to show how people buy products.
Use this information to determine what types of point-of-sale
displays are most effective. Also, encourage Florida chains to
compete with each other in providing produce grown to American
standards, on providing access to fresh local produce and on "giving
back" a percentage of proceeds to Florida producers to help take
steps to implement production practices to improve food safety and
improve compatibility with the environment.
Give consumers an option to donate $1, $3 or $5 at the checkout counter to support South Florida producers
in their efforts to pay the extra costs of ensuring food safety, fair labor practices, and environmental compatibility, as set forth in U.S. and Florida laws. Give consumers an option to make an additional $1, $3 or $5 per shopping trip donation to help producers implement BMPs and conservation practices that exceed the standards set by U.S. and Florida laws. Also, consider instituting utility & phone bill check offs for the same purpose. These funds should go into a dedicated fund to pay the costs of helping producers implement BMPs and establish Integrated Operating Plans (per Priority Actions in the next section) to reduce operating costs.
Again, emphasize the benefits this will provide to small farms, family farms and minority farmers, in helping them remain in business and compete with large corporate farms and foreign producers.
Recommendation:
Who:
Florida Department of Agriculture (DOACS) Marketing Division; Enterprise Florida; Governor's Office on Tourism, Trade and Economic Development (OTTED) and University of Florida, Institute of Food and Agricultural Sciences (IFAS), in cooperation with ag groups.
What:
Profitability hinges on a number of factors. Need major statewide effort to identify and address these factors. DOACS should initiate a major coordinated effort to link up with Enterprise Florida, OTTED and IFAS to analyze and improve on existing strategies and develop new strategies and prototype programs to improve profitability. These strategies and programs should be designed to:
• improve profitability for producers, with an emphasis on small- and medium-size producers, and
• return more of the retail price to producers.
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