Producers 'need' to vary operations

By LYNN MONTGOMERY | East Texas Edition

Oct. 28, 2004 - There's a need for agricultural diversification was the message sent during an Oct. 13 conference in Nacogdoches. The conference, hosted by the Texas Department of Agriculture (TDA), USDA Natural Resources and Conservation Service and Texas Cooperative Extension (TCE), explained how farmers and ranchers can "engage in varied operations."

The objectives of the conference was to bring technical assistance down to a more defined area and provide tools, counseling, etc., according to organizers of the event, which is repeated at similar events throughout the state.

With the firm belief that farmers and ranchers are the best stewards of the land, the three entities have bonded together to help these individuals, along with community leaders, to promote the "new agriculture" of the future.

A TDA representative at the Nacogdoches meeting stated agricultural producers are now having to find other means to supplement their income.

Dr. Ed Mahoney, an extensive researcher in ag diversification and agribusiness, explained to those in attendance that "you don't want to mix up preserving farmland and preserving farmers."

He added there are different types of farm and land revenue in a diversified enterprise. These include value added to existing product(ion) such as packaging and processing; nontraditional ranch and farm animals and crops; new marketing and distribution; farm and ranch recreation and tourism; adaptive re-use; leases, easements, shares and timeshares; contract services; and expertise consulting education.

To further explain each type, Mahoney said, about the value-added aspect, "Farmers and ranchers are used to wholesale. We have to refocus them to retail.

"Women are leading the way in this new agriculture. I think that's something to shout about and be proud about," Mahoney said.

With the nontraditional ranch and farm animals/crops category, the researcher said the animals need to be something that will bring people in, which will build the market. He added at a conference in Brady, a gentleman, who has a lavender farm wanted to start a lavender association.

The key to marketing is education. "You have to stop marketing to yourself," the researcher stated.

Recreation and tourism can mean many things. It could mean such thing as hosting fairs, special events, tours, hunting areas and lodges, and pick-cut-gather-grow you own. One example of this, cited at the Oct. 13 event, was a man outside Chicago, Ill., who takes people out to his orchard and auctions the fruit off the trees and then those same people have to pick their own fruit.

An example of adaptive re-use cited was about a man in Michigan who moved three, old churches to his farm and restored them. The churches are now used as an area for weddings, receptions, and picture-taking.

Mahoney cited some people say "'that it is not traditional agriculture.' They pooh-pooh it.

"Why can't we re-orient it, resubsidize? What is traditional? Why is traditional better? Is traditional sustainable?" he asked.

Agriculture is supposed to be a commercially-viable enterprise. Mahoney commented, "Aren't we in farming to make money."

The researcher asserted communities want ag diversification, with a "build it and they will come" attitude, and "bankers will loan more money to farmers to become more efficient."

Obtaining the funds to create ag diversification projects leads to the question of "how?" Mahoney said this starts with a feasibility assessment which includes business plan, financing plan and start-up plan.

For the assessment, areas to be considered are existing and desired farm/ranch operation, anticipated revenues and break-even points, permits and licenses, risk management and staffing.

Several feasibilities are also involved in this decision-making process. One is marketing. Questions to contemplate are "Who would visit/buy this?" "How many are there and what are their needs and desires?" "What is the competition?" Another is financial. "What are the costs and cost flows?" "What are the short-term and long-term revenues?" "What is the required investment?" "What is the break-even point?"

One big area to consider is the personal and family feasibility. "What are your personal skills, characteristics?" "Is there a supportive family?" "What is the personal objectives and the desired lifestyle?"

Don't forget the regulatory feasibility. "What are the government policies, local zoning regulations, building permits, and insurance needs?"

If all the necessary considerations for ag diversification are mind boggling, there is an organization to help. The Texas Center for Rural Entrepreneurship (TCRE), led by Dr. Greg Clary, has a goal to make an individual have a successful business.

Clary informed those at the Nacogdoches conference that the TCRE is "trying to centralize and regionalize people that can help you." People such as economic development corporation, TCE, TDA and the Small Business Association.

The key to success for entrepreneurs, according to Clary, is to "build a network" of sources and resources.

"We are taking dreams and trying to fulfill them," Clary concluded.

For more information about the TCRE, go online to TCRE.org.