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Farm-to-Institution: Next Steps in Supporting Local Food Infrastructure

Selling to institutions is a trending opportunity for local food, and we have barely scratched the surface of potential for how wholesale markets could impact local foods sales and support farmers. It is a win-win opportunity.
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As summer shifts into the colder seasons, gardeners in the Northeast turn to the age old traditions of preserving and extending the life of food; Fruit gives way to jam, tomatoes become sauce, vegetables are pickled, relished and frozen. Seasonality, and our responses to it, may be the single most defining characteristic of local food. And, methods of processing, preserving and adding value are emerging as an important part of the opportunity and challenge of increasing local purchases, especially to buyers beyond individual households, into wholesale and institutional markets.

Selling to institutions is a trending opportunity for local food. It is estimated that 99 percent of agricultural products consumed in the U.S. is purchased through wholesale channels. A recent USDA report estimates that tens of millions of people eat their meals outside of the home environment each day. The combined meal service potential of schools, colleges, hospitals, corporations and government agencies represents a huge opportunity for local farmers, ranchers and local food entrepreneurs to, "gain market share, earn a livelihood, forge ties with local residents, and improve community health and well-being through farm-to-institution efforts, in which local producers sell to institutions nearby."

Yet, we have barely scratched the surface of potential for how wholesale markets could impact local foods sales and support farmers. It is a win-win opportunity. Still, there are some barriers to farm-to-institution, including: seasonality, availability and aggregating enough farm products from small to mid-sized farms. A response to this opportunity requires shifts in policy, infrastructure and education as we support growing urban and rural agricultural trends.

  1. Effective Policy: Thirty-seven states have policies aimed at creating opportunities for farm-to-institution sales. These laws can either create a preference for or mandate local purchases. "A local preference law directs state entities to prefer local food products if the local food is, for example, not more than 10 percent more expensive than out-of-state food. The second type of procurement law sets up a target for the amount of food that will be purchased from local producers. For example, a state may set a goal or require that, say, 20 percent of food products purchased by state entities be local farm or food products within a prescribed number of years." Laws can also be extended to encourage regional purchases, encouraging tiered purchases based on proximity.
  1. Build Infrastructure and Develop Networks: In order to sell to institutions, farmers need to address product availability, seasonality, quality, and consistency, as well as the sales, distribution, processing and handling needs of institutions. U.S. food infrastructure is better equipped to deal with larger farms and longer supply chains. So, smaller farms aimed at localized sales often do not have the ability to wash, chop, pack or freeze their products in order to accommodate institutional demands. Many are looking at food hubs as a way to fill in infrastructure gaps by purchasing equipment, creating new facilities and, serving to aggregate, distribute and market local products. Beyond bricks and mortar, strategic alliances and coordinated efforts are critical to identifying strong programs and bringing them to scale. Such efforts will be critical to transforming the complicated local foods value-chain by building infrastructure, and generating the requisite cultural and political changes that come about through education and strong partnerships.
  1. Create Alternative Certifications: Most wholesale buyers require certification of Good Agricultural Practices (GAP) on farms and Good Handling Practices (GHP) in packing and processing facilities. GAP and GHP can be costly, which may limit a farm's ability to prosper and hinder the growth capacity of the infrastructure needed to support the farm-to-institution center. The state of Massachusetts has created its own, less-costly food safety certification process, called the Massachusetts Commonwealth Quality Seal. Many food service management companies within the state accept the Massachusetts Commonwealth Quality Seal instead of the more-costly GAP certification.
  1. Support Business Development: According to a 2013 report by Harvard Food Law and Policy Clinic, "by 2008 the value of local food sales in the U.S. had reached 4.8 billion which was up from $1.2 billion in 2007 and $551 million in 1997." A burgeoning force of local entrepreneurs, armed with this knowledge is creating new food-based businesses. But food businesses are risky and successful start-ups require assistance. Food incubators are serving as one example of how education and business support can "help to reduce the risk of failure for food businesses from 56% to 13%....and create robust opportunities for the local food economy." The right kinds of support and education, including food hubs, food processing, and food-based businesses, can provide high level entry points for economic and job stimulus.

Local food preservation has a long-standing tradition in New England and the Northeast. Reviving these traditions and bringing them to scale in order to encourage Farm-to-Institution sales and more direct supply chains will ensure future generations have local food access and elevate strong communities that support local farms and farmers.

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