When most people hear the term agribusiness, they often think immediately of large conglomerate corporate farming practices, which have long been accused of squeezing out the family farm. While the term certainly encompasses these farms within its boundaries, agribusiness has come to mean any business that is associated in some way, whether large or small, with the production and distribution of food and food products. Our region, popular for dairy products, apples, sweet corn, and wine, also includes fruits such as peaches and cherries; vegetables like peas, beans, squash, and cabbage; grains; and more recently field corn produced for ethanol.

Like much of New York State, Western New York has enjoyed a long history of successful agriculture and related businesses.

In fact, statistics show that agriculturally based businesses annually bring in nearly 1.3 billion dollars of revenue in New York State. With such a strong showing across the state, it's no wonder that in Western New York agribusiness impacts nearly every facet of community and economic growth. Our region is rich with a long tradition of agriculture, and coupled with a commitment to overcoming the particular challenges facing agribusiness, we enjoy a significant economic benefit from it.

Long History
 Like much of New York State, Western New York has enjoyed a long history of successful agriculture and related businesses. Much of this success has to do with the influence of the many lakes in our region. Kim Zuber, president of the Monroe County Farm Bureau and a dairy farmer himself says, "The Great Lakes Region, and particularly Western New York, has such diversity that it's suitable for many, many kinds of agriculture. Because of the lakes you have the ability to grow different fruits that you wouldn't be able to in other places. We have the ability to do a lot of different things with agriculture in Western New York.¡±
 Mike Gastin, president of Bob Wright Creative and representative of many local agricultural-based businesses, adds that historically, ready transportation from the Erie Canal and natural sources of power such as Rochester's Upper and Lower Falls have contributed to the growth and success of agriculture in our region. Additionally, he says, "The farmers were intelligent and worked together to maximize opportunities, and the state has invested in deeper learning, research, and infrastructure around agriculture.

Rochester, in fact, served as the hub of food distribution for most of Western New York. According to Jim Farr, assistant director of recreation for the City of Rochester and overseer of Rochester's Public Market, from its beginning in 1827 until after WWII, the market "was the main vehicle for the distribution of food in the area, especially produce and meat and cheeses and everything else before there were grocery stores.

What's important about the history, Farr explains, is that often it establishes a tradition of patronage, keeping customers coming in the door. "We've had the long tradition of having a market here for so many years, and it's become a part of people's Saturday shopping routine. And it's an experience that customers appreciate. "People, when they're polled about why they go to a farmer's market, say it's the experience first followed by the ability to support local farmers. Freshness, price, and some of the things you might expect to be first are actually less important, says Farr.

Marketing your product as healthy or organic sets you apart from competition and can justify a higher price to the consumer.

Overcoming Issues
But money can be a challenge to agriculturally based businesses. For one, says Zuber, "agriculture is capital intensive. This means many of today's farms are large commercial operations, which have to work hundreds of acres in order to get the most benefit from expensive equipment necessary to produce crops. The other trend, Zuber says, is the very small farm, which operates with less overhead and is able to fill niche markets like locally grown or organic. What's declining are the mid-sized farms because they either do not fill a niche or cannot justify the expenses of machinery and other operating costs. Zuber notes that many mid-sized farms, to combat this, end up consolidating with larger farms either through buyouts or retirement.

Another issue facing farms is changing legislation. Issues such as workman's compensation, liability rates, and ever-changing environmental laws impact a farm's ability to stay competitive or even to break even. Consequently Zuber spends time in Albany and Washington each year lobbying on behalf of members and learning about new opportunities and current legislative trends. Zuber says members of the Farm Bureau "want to do a good job, and adds that, "government wants us to do a good job and they help us do it. Through grants and other programs, Zuber says the government is able to help members stay competitive on a worldwide basis.

In addition to operating expenses and farm laws, agricultural businesses must take into account limited profit margins. Gastin says agribusiness is very margin oriented. He explains, "When you're a vegetable provider, you are trying to add value by chopping the vegetables up, putting them in a bag and freezing them, but really what you are selling is carrots and peas and every penny counts"it's really down to the penny.

Gastin notes there are several ways of overcoming the small margins, including adding value to the consumer. He says the question sellers need to ask is, "How can I add value to captivate the imagination of the consumer, differentiate and stand out, so I'm not just a commodity? Another big move companies can make is through positioning. For example, marketing your product as healthy or organic sets you apart from competition and can justify a higher price to the consumer.

Beyond Marketing
There are other measures farmers and food producers can take to ensure the success of their businesses. One way is to join a collective group such as Pro-Fac. One of the largest such in our area, Pro-Fac Cooperative, Inc., boasts 475 members across the nation, 250 of whom are located in Western New York. Kevin Murphy, Pro-Fac's vice president of Member Relations says one of the benefits of belonging to a co-op is that growers go into the year knowing they will receive an industry average for their product.

And because Pro-Fac supplies larger companies such as Birds Eye Foods (of whom Pro-Fac owns a forty percent share) they keep in close contact with what products companies want and make contracts accordingly. Murphy says, "Members appreciate not worrying about contract negotiation every year. That means growers can focus on products they know have a market.

Another way around the small margins is to find a niche and fill it. That's exactly what Scott Smith, winemaker and owner of Four Chimneys Organic Winery, did. Four Chimneys was, in fact, the first organic winery in North America. Smith says, "It's definitely brought us business; it's attracted people who are looking for organic or green sources and have a lifestyle that would include wine. Smith says that while they have been organic since they opened in 1980, they have seen growth as the national awareness of green and organic living has grown. The increased interest in knowing where and how food is being produced has, according to Smith, "brought attention to growers, wineries, and other food growers.

And increased interest can truly affect the bottom line of small to mid-sized companies like Four Chimneys. Smith explains that wineries depend on the individual connections made with customers. "Every winery builds its own base of people that like you. They like you, they like what you do, they like to see you when they get there and they like the wine that you produce. You kind of get adopted by your customers.

Connecting customers and producers is exactly what the public market does. "The focus really is to still provide an area where farmers and others can sell their produce and other goods directly to the consumers,¡± says Farr. He adds that markets like ours have helped to give rise to what he terms, "truck farms, which are farms that truck their produce in to farmer's and public markets where they can sell directly to the customer. By selling direct, Farr notes, "They can get a lot bigger return for their product than they can on the wholesale level.

Economic Benefits
And it's not all one-sided. The economic benefits to the region are enormous. According to Zuber, "The rule of thumb is for every dollar that agriculture generates it turns over two and a half times in the local community. That money comes from the creation of jobs and increased spending for necessary equipment, fertilizers, and feed. It also comes in the form of money spent to support agriculture's infrastructure.

Zuber warns, though, that this infrastructure needs to be protected in order for agriculture to continue to provide such a boon to the area. "As urban areas move in on us and as the suburbs move in on us, we still need to be able to move our big equipment up an down the road, says Zuber, adding that agriculture loses hundreds of acres each year to residential buildings. With each acre lost, the potential for decreased production is a threat, not just to farmers, but to businesses that either support or depend upon agriculture to survive. He says, "We put a good deal of effort into that area trying to maintain that"it gets more difficult every year.

Smith agrees and explains that if the infrastructure is protected and allowed to grow then jobs and other benefits increase. In regard to the wineries that dot the Finger Lakes, he says, "The more vineyards go up, the more there is an agricultural base support for it; you've got more call for hand labor, and the smaller towns are starting to see lots more traffic coming through. As a result, Smith explains, more restaurants, hotels and bed and breakfasts are coming in to support the increased tourism, ramping up the economies of even the smaller towns.

And it's not just smaller cities that benefit from agriculture. Farr says that with one of the largest markets in the Northeast, Rochester's Public Market has helped to revitalize the area. Of the market, he says, "It's not only supporting farmers and supporting agriculture in the region, but it's also having a direct economic impact on the city as well.¡± He notes changes in zoning and an expanded outlook to include the whole district made ten years ago is really paying off with new development of retail, living, and restaurant type spaces.

Community Benefits
Another benefit not to be overlooked is the sense of community that agribusiness can bring to the area. Farr describes Saturdays at the Market as, "the most diverse place between New York and Chicago. One reason is that people coming from other cultures and other countries are familiar with market shopping. For others, price and tradition draw them. Whatever the reason, the Market provides a place where the community can come together with the common goal of providing food for their families.

And it connects the community with the growers and the source of their food. This is a benefit for the grower as well because agriculturally based businesses depend on the community and the consumer to tell them what they want.

Murphy says, "You have to keep in touch with what the consumer wants, and in following right along with that, Pro-Fac has to be providing the products that its customers want.

According to Gastin, that is agribusiness's top job. "What agribusiness"at least as far as the consumer is related" is trying to do is figure out, How is the lifestyle of the consumer changing, and what are the things they care about?' And once that is established, then businesses can focus on building a relationship with the consumer based on the consumer's needs. "That's where agriculture is a long-term investment, Gastin says, adding that while marketing can drive sales in the short term, a more profitable course is to build long-term equity with your customer. In short, successful agribusiness is an investment that both depends on and enhances the community it serves.

BSM 

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