United StatesDepartment ofAgriculture

AgriculturalMarketingService

February 2000

Innovative MarketingOpportunities for SmallFarmers: LocalSchools as Customers

by

Daniel P. Schofer, Agricultural Marketing Service, USDA

Glyen Holmes, Natural Resources Conservation Service, USDA

Vonda Richardson, College of Engineering Sciences, Technology,and Agriculture, Florida A&M University

Charles Connerly, West Florida Resource Conservationand Development Council

February 2000

Innovative MarketingOpportunities forSmall Farmers:Local Schools as Customers

This research was conducted under a cooperative agreement titled Opportunities forLimited-Resource Producers to Supply a School Lunch Program in Florida with Local AgriculturalProducts—A Pilot Project, administered by the U.S. Department of Agriculture, AgriculturalMarketing Service, Transportation and Marketing Programs, Marketing and TransportationAnalysis.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color,national origin, sex, religion, age, disability, political beliefs, sexual orientation, or marital or family status. (Not all prohibitedbases apply to all programs.) Persons with disabilities who require alternative means for communication of program information(Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 14th andIndependence, Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice or TDD). USDA is an equal opportunityprovider and employer.

The authors are indebted to many professionalsfor their assistance and efforts in this 2-year pilotproject.

The success of the New North Florida Coopera-tive was made possible by the interest and partici-pation of J’Amy Petersen, Food Service Director ofthe Gadsden County School District. She recog-nized the importance of fresh, healthful vegetablesand fruit in children’s school meals as well assupported an innovative cooperative of local,small farmers. Linda Wright, Food Service Direc-tor of the Jackson County School District, is alsorecognized for her interest in and purchases fromthe Cooperative.

Linda Stanhope of the Defense Subsistence Office,Jacksonville, assisted the Cooperative to become acertified vendor. She was also instrumental inassisting the Cooperative with its participation inthe Direct Vendor Delivery program.

The West Florida Resource Conservation andDevelopment Council, headed by Reid Powell,was the facilitating organization that enabled theAgricultural Marketing Service and the NaturalResources Conservation Service (NRCS) to worktogether in this effort. The Council’s genuineconcern for the community and its welfare wascrucial to coordinating the pilot project andproviding assistance to the newly formed coop-erative of limited-resource producers.

The staff and faculty of the Small Farmer Out-reach Training and Technical Assistance Project,Florida A&M University, including Sophia Glenn(outreach specialist), provided valuable informa-tion on crop production, record keeping, andcooperative organization.

Acknowledgments

Don Coker and Les Harrison of the Florida StateBureau of Farmers Markets provided the Coop-erative with much-needed technical assistance.Through the Agriculture Venture Services Pro-gram, they provided lease incentives, assistancewith equipment needs, and business plan devel-opment. Their strong interest and help are greatlyappreciated.

Dorothy Staley, NRCS Public Affairs, contributedher photographic expertise to this report. Theauthors are indebted to her for the quality of herphotos.

Joseph P. Anthony’s (Agricultural MarketingService, retired) initial investigation and effortswere essential in designing the pilot project. JonHall of the Rural Business-Cooperative Serviceprovided important information that has substan-tially contributed to the project and the substanceof this report. Many others contributed to variousaspects of the pilot project. The authors appreciatetheir assistance.

Mention of specific equipment, manufacturer, orbrand names does not constitute endorsement orimply preference by the U.S. Department ofAgriculture. It is simply a reporting of what theCooperative chose in the development of itsbusiness.

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Page

Summary ........................................................................................................................................................ 1

Introduction .................................................................................................................................................... 3Objectives .............................................................................................................................................. 6A Time to Act ......................................................................................................................................... 6Meeting the Recommendations ......................................................................................................... 7Jackson County Empowerment Zone ............................................................................................... 8The Federation of Southern Cooperatives ....................................................................................... 9

Development of the Cooperative ................................................................................................................. 11Organization ....................................................................................................................................... 11First Meeting....................................................................................................................................... 11Advantages and Disadvantages ...................................................................................................... 12Participant Commitment .................................................................................................................. 12Cooperative Organization ................................................................................................................ 14Education ............................................................................................................................................ 14Business Volume ................................................................................................................................ 16Opinions of Cooperative Participants ............................................................................................ 17

Building a Business ...................................................................................................................................... 19Business Plan ...................................................................................................................................... 19Vision Statement ................................................................................................................................ 19Strengths and Weaknesses of the Cooperative .............................................................................. 19Mission Statement ............................................................................................................................. 20Values Statement ................................................................................................................................ 20Evaluating Barriers and Opportunities .......................................................................................... 20Evaluating Strategic Options for Business ..................................................................................... 21Strategic Plan Defined ....................................................................................................................... 22Establishing Credit ............................................................................................................................ 24Importance of Postharvest Handling.............................................................................................. 25Equipment .......................................................................................................................................... 26Employees ........................................................................................................................................... 29Department of Defense Direct Vendor Delivery (DVD) Program .............................................. 30

Contents

Cultivating Customers in a Local Market ...................................................................................... 30Vending Experiences During the 1997/98 School Year ................................................................ 32Vending Experiences During the 1998/99 School Year ................................................................ 33Strawberry Trial—1998 ..................................................................................................................... 35Cost Effectiveness .............................................................................................................................. 35Student Acceptance ........................................................................................................................... 36Administrative Acceptance .............................................................................................................. 37Deliveries ............................................................................................................................................ 37The People of the New North Florida Cooperative ...................................................................... 38

References ................................................................................................................................................... 41

Appendixes ................................................................................................................................................... 431. Gadsden County School Food Service Menus ...................................................................... 452. Department of Defense Order for Supplies or Services Form ............................................ 473. April Lunch Menu for Jackson County School District ....................................................... 494. Delivery Schedule for Gadsden County Schools on March 10, 1999 ................................. 51

TablesTable 1. Regional and economic statistics ............................................................................................... 4Table 2. Delivery schedule for leafy greens in fall 1997 ...................................................................... 32Table 3. Delivery schedule for leafy greens in spring 1998 ................................................................ 32Table 4. Delivery schedule for fruit over 1997/98 school year .......................................................... 33Table 5. Delivery schedule for leafy greens in fall 1998 ...................................................................... 33Table 6. Delivery schedule for leafy greens in spring 1999 ................................................................ 34Table 7. Delivery schedule for fruit over the 1998/99 school year ................................................... 34

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FiguresFigure 1. Cover Photo: Spencer Lewis of the New North Florida Cooperative displays fresh

collard greens which will be sold to local schools.Figure 2. Nothern Florida Regional Map................................................................................................ 3Figure 3. Photo ............................................................................................................................................ 5

NRCS Chief Pearlie Reed (left) visits with Glyen Holmes (NRCS, center) and CharlesConnerly (WFRCDC) to see the Cooperative in its beginnings.

Figure 4. Photo .......................................................................................................................................... 13A field of nutritious collard greens ready for harvest

Figure 5. Photo .......................................................................................................................................... 26New North Florida Cooperative’s chopping machine used for processing leafy greens

Figure 6. Photo .......................................................................................................................................... 28Refrigeration system and storage for perishable agricultural products

Figure 7. Photo .......................................................................................................................................... 29Glyen Holmes (left) and Vonda Richardson meet with DOD Defense Subsistence Officestaff in Jacksonville.

Figure 8. Photo .......................................................................................................................................... 36Children and teachers enjoy a healthful lunch, which includes fresh, leafy greens fromthe Cooperative.

Figure 9. Photo .......................................................................................................................................... 39Spencer Lewis and his family are participants in the Cooperative.

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Small farmers in the United States are declining innumber and experiencing economic difficulty.Within that group, the number of African-Ameri-can farmers has dramatically decreased since1910, when 1 million African-American farmersowned 15 million acres of land. In 1998, fewerthan 20,000 African-American farmers owned 2million acres.

The U.S. Department of Agriculture’s (USDA)Agricultural Marketing Service (AMS) and Natu-ral Resources Conservation Service (NRCS), theWest Florida Resource Conservation and Develop-ment Council (WFRCDC), and the Small FarmerOutreach Training and Technical AssistanceProject, Florida A&M University (FAMU) haveworked together on this pilot project to createmarketing opportunities for limited-resourcegrowers. The cooperators used A Time to Act, thereport produced by USDA’s National Commissionon Small Farms, as a guide. A group of smallfarmers in the Florida Panhandle organized intothe New North Florida Cooperative and estab-lished a location in Marianna, FL, 70 miles west ofTallahassee. The Cooperative recognized a consid-erable opportunity in serving local school districtswith fresh agricultural products. This pilot projecthas made substantial progress over the 1997/98and 1998/99 school years.

Summary

The Cooperative overcame initial difficulties,including lack of organization, economic difficul-ties, social attitudes, existing customer prefer-ences, and lack of equipment. Realizing thateffective organization was critical, these limited-resource growers formed a management team as agoverning body. The management team addressedproblems and handled day-to-day businessactivities in a unified, methodical way. The Coop-erative acquired capital and purchased necessarystartup equipment, such as a refrigerated trailer,cutting machines, and wash sinks.

The Cooperative developed a good workingrelationship with the Food Service Director for theGadsden County School District by providinghigh-quality produce, prompt deliveries, fairprices, and courteous professionalism. The vend-ing experiences over the 1997/98 and 1998/99school years were positive steps for the Coopera-tive in building a long-term, reputable business.The Cooperative’s main product was fresh-cut,leafy greens, but watermelons, strawberries,blackberries, and muscadine grapes were alsosold. Word-of-mouth advertising has portrayedthe Cooperative as a reputable vendor andopened doors of opportunity in other schooldistricts, including Jackson, Leon, and WaltonCounties.

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Today, there are 300,000 fewer farmers than in1979. Many small farm operators have either leftthe farm or been forced to find off-farm jobs tosupplement their income. This group of smallfarmers contains many African-American farmers.The number of African-American farmers hasdramatically declined since 1910, when 1 millionAfrican-American farmers owned 15 million acresof land. In 1998, fewer than 20,000 African-Ameri-can farmers owned 2 million acres. A majorconcern of these farmers is the reduction andeventual elimination of Government interventionin commodity markets, including tobacco, cotton,and peanut commodity programs, as a means toprovide income and price stability for the farmingsector. Small farm operators are eager to findother income to offset the loss of these commoditysubsidies.

Introduction

Farmers are receiving less and less of every con-sumer dollar spent on food. In 1980, the farmerreceived 37 cents of every consumer dollar spenton food, compared to 23 cents in 1998. Part of thereason for this decline is that consumers areincreasingly using processed, ready-to-eat prod-ucts and meals. This trend has resulted in a shiftof income and opportunities from the farms to thecompanies that process, package, and marketagricultural products. This pilot project takesplace in northern Florida, centered aroundMarianna (figure 2). The needs and hardships ofthe small farmer in northern Florida are fairlyrepresentative of those of farmers in the southeast-ern United States.

Figure 2. Northern Florida regional map.

Jackson

★Marianna

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Table 1. Regional and economic statistics*

Poverty Unemployment Per capitaCounty Population Area (sq. mi.) rate (%) rate (%) income ($)

Columbia 45,534 797 15.4 9.4 11,947

Gadsden 41,931 518 22.0 6.7 10,445

Hamilton 10,996 517 24.7 9.5 10,733

Jackson 41,579 942 17.3 6.4 11,205

Jefferson 11,997 609 17.5 5.5 10,628

Leon** 198,269 676 9.4 3.9 15,724

Madison 16,513 710 19.7 7.2 10,934

Suwannee 27,374 690 15.1 9.0 11,225

Wakulla 14,444 601 11.1 6.0 11,438

* Bureau of the Census, Census of Agriculture, 1992. Geographic Area Series, Florida State and County Data. U.S. Departmentof Commerce.

** Leon county has a much larger population and better statistics because Tallahassee, the State capital and a large city, is in thecounty.

Northern Florida is experiencing financial difficul-ties, at a time when much of the country is enjoy-ing prosperity. Table 1 provides information onlife in the rural counties of northern Florida today.The economic and political environment in theagricultural industry suggests an increasing needfor more efficient management practices on smallfarms. Increased urbanization of southern andcentral Florida has left northern Florida as theonly region in the State where small farmingoperations continue to exist in large numbers.According to the 1987 Florida Agricultural Cen-sus, more than 33 percent of the farms in Jackson,Gadsden, Wakulla, Leon, Jefferson, Madison,Suwannee, Hamilton, and Columbia Counties areless than 50 acres. Small farmers are furtherconfronted with major problems as they attemptto compete for markets in today’s rapidly chang-ing political, economic, and technological environ-ment. Low profits are causing many farmers toabandon farming altogether. As a result, sur-rounding communities are overwhelmed by a

demand for employment that they are unable tomeet. The search for employment is taking manyfarmers away from northern Florida.

As farm policies drive agricultural operationstoward market-based production, small farmersmust consider nontraditional, agricultural enter-prises and more innovative ways of marketingtheir products. The 1996 Federal AgricultureImprovement and Reform Act (96 Farm Bill)reduced funding for several programs, diminish-ing the role of Government in the life of the smallfarmer. Government programs are starting togrant more planting flexibility to the farmer.Therefore, farmers must be knowledgeable aboutthe market outlook for agricultural commoditiesto determine profitable enterprises to pursue. Thesmall farmer needs to investigate alternativecrops, cooperative farming and marketing, andvalue-added processing to compete in today’sagriculture.

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Obstacles facing the small farmer have beenrecognized, and efforts have begun to ensure theircontinued contribution to U.S. agriculture. Locallimited-resource farmers in northern Florida,together with the U.S. Department ofAgriculture’s (USDA) Agricultural MarketingService (AMS) and Natural Resources Conserva-tion Service (NRCS), West Florida ResourceConservation and Development Council(WFRCDC), and Florida A&M University(FAMU), are working to better the financialsituations of the farmers through innovativemarketing strategies. These limited-resource

growers formed a cooperative to increase theirfarm income by introducing improved methods ofmarketing value-added agricultural products,while encouraging innovative farming techniques.

AMS, NRCS, WFRCDC, and FAMU came togetheras a working group with a mutual concern forsmall farmers and the family farm. The workinggroup established this pilot project in early 1997and concentrated on assisting small farmers in theregion to increase the prosperity of their familyfarms. This report provides the results of the 2-year pilot project.

Figure 3. NRCS Chief Pearlie Reed (left) visits with Glyen Holmes (NRCS, center) and Charles Connerly(WFRCDC) to see the Cooperative in its beginnings.

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ObjectivesFollowing are the specific objectives of the pilotproject in northern Florida, which may encouragereplication of the Cooperative’s efforts in otherareas of the country.

1) Evaluate the opportunities for limited-resourceproducers to supply a local school lunch pro-gram with agricultural products through a pilotproject.

2) Monitor and evaluate the pilot project withregard to cost effectiveness.

3) Monitor and evaluate the pilot project withregard to student acceptance.

4) Monitor and evaluate the pilot project withregard to administrative acceptance.

5) Monitor and evaluate the pilot project withregard to nutritional value.

A Time to ActIn July 1997, U.S. Secretary of Agriculture DanGlickman appointed a 30-member NationalCommission on Small Farms to examine the statusof small farms in the United States and to deter-mine a course of action by which USDA mightrecognize, respect, and respond to their needs. InJanuary 1998, the Commission submitted itsreport, A Time to Act, which contains a vision thatrecognizes the historical importance of smallfarms in the United States and the substantialpotential that they hold for the future of thiscountry. The Commission set policy goals thatwould guide the efforts of Secretary Glickman andUSDA to best meet the needs of small farmers andranchers. The report contains 146 specific recom-mendations that respond to the threats to smallfarm viability and examine future opportunities.The following recommendations from A Time to

Act pertain directly to the needs of limited-re-source growers in the northern Florida area andthis pilot project.

• The research agenda should include the devel-opment of technologies suited to small-scalefarms (Rec. 1.3).

• USDA agencies, with leadership from theUSDA Office of Outreach, should seek todevelop and implement innovative ways topartner with the private and nonprofit sectors.Through improved partnerships, USDA fundscould be targeted to community-based organi-zations to help connect farmers and farm-workers with the technical and organizationalinformation developed by and available fromUSDA, land-grant universities, and otheragencies ... (Rec. 2.9).

• ... financial and technical assistance programsshould give priority to assisting the develop-ment of cooperatives that will primarily benefitsmall farm operators (Rec. 3.16).

• Value-added initiatives should pursue specialtyand differentiated products where small farmsand small food processing firms will have acompetitive advantage over larger firms ... (Rec.3.16e).

• Programs should give priority for cooperativedevelopment to benefit small farm operators,including, women, minority, and beginningfarmers. Publications should be specificallytailored to provide information about coopera-tive opportunities for small farmers (Rec. 3.22).

• USDA should develop an interagency initiativeto promote and foster local and regional foodsystems for the benefit of small farms, ruralcommunity citizens, and low-income people inrural and urban areas (Rec. 3.26).

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• The Commission endorses the efforts of USDA’sFood and Nutrition Service (FNS), AMS, andNRCS to pursue marketing opportunities forsmall farms to supply local school lunch pro-grams. These agencies should be commendedfor taking this step, and should pursue the pilotprograms in North Carolina, Georgia, andFlorida with a commitment to overcoming anybarriers to developing this market. The resultsof the pilots should be published and distrib-uted along with a manual to encourage replica-tion of these efforts throughout the country(Rec. 3.26f).

Meeting the RecommendationsAMS, NRCS, WFRCDC, and FAMU are devotedto providing assistance to small farmers andcontributing to the sustainability of the familyfarm. This working group used A Time to Act’svision statement and policy goals as a measuringstick for the goals and results of the pilot project.This pilot project has directly responded to theabove recommendations, as explained below:

Meeting Recommendation 1.3. Work with theCooperative in its early stages required “nuts andbolts” solutions to serious problems such asrefrigeration, storage, and processing. In theproduce industry, refrigeration is the key tosuccess and profitability. Most precooling andcold room technology is geared toward the largefarm, processing firm, or broker. To ensure thehighest quality for Cooperative customers, AMS,NRCS, WFRCDC, and Florida A&M worked withthe Cooperative to provide economical, effectivetechnology solutions for handling agriculturalproducts.

Meeting Recommendation 2.9. AMS and NRCShave differing areas of expertise and resourcesthat contributed to the pilot project’s success. TheWFRCDC, a nonprofit organization with a goal ofincreasing local economic development, was an

excellent conduit which enabled the two agenciesto work together. The pilot project would not havebeen successful without the participation ofFAMU’s Small Farmer Outreach Training andTechnical Assistance Project.

Meeting Recommendation 3.16. Small farmoperators in northern Florida realized that, to besuccessful, they would have to pool their re-sources. AMS, NRCS, WFRCDC, and FAMUworked diligently to organize these growers intothe New North Florida Cooperative. After theinitial organization, AMS, NRCS, WFRCDC, andFAMU contributed organizational and technicalinformation as well as other resources to ensurethe Cooperative’s continued success.

Meeting Recommendation 3.16 e. The Coopera-tive decided to grow leafy greens since most of thegrowers had some level of experience with thecrop. While raw, unprocessed leafy greens sold bythe bunch do not provide much opportunity forprofit, washing, cutting, and bagging them in-crease their value substantially. The value-addedproduct was more easily used by food serviceworkers in school cafeterias, and enabled theCooperative to gain access to local school lunchand breakfast program markets and make areasonable return on their investments.

Meeting Recommendation 3.22. The NewNorth Florida Cooperative’s goals are to providethe participants with a reasonable return oninvestments, pay a living wage to their day work-ers, and provide an avenue for cash to reach localsmall farm operators. The majority of these arelimited-resource, minority, full-time or part-time,small-scale farmers. This report describes thesuccesses and learning experiences of the Coop-erative. A description of these experiences mayprove useful to other USDA agencies and organi-zations interested in assisting small farm opera-tors in cooperative opportunities, including land-grant universities, State Cooperative Extension

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Service, other resource conservation and develop-ment councils, and Native American govern-ments. AMS has also published bulletins, specifi-cally targeting the small farmer, which summarizethe major points of this report. The bulletins aredesigned for distribution by extension agents andoutreach specialists at the local level. (Bulletinscan be found at www.ams.usda.gov/tmd/mta/publications.htm.)

Meeting Recommendation 3.26. The pilot projectis a joint effort by AMS, NRCS, WFRCDC, andFAMU to assist small farm operators in providingchildren in the local, rural community withhealthful, fresh fruit and vegetables. The Coopera-tive provides nutrition to these children, whileproviding financial benefits to the Cooperativeparticipants, its employees, and many of the localfarmers.

Meeting Recommendation 3.26f. This pilotproject began when A Time to Act was beingwritten. Since that time, the Cooperative has hadmany successes and a few learning experiences.An important goal of the pilot project was todevelop this report and a series of bulletins,entitled Small Farmer Success Story, that presentorganizational suggestions for similar coopera-tives, tips on establishing a solid market andsecuring finances, and the successes and learningexperiences of the New North Florida Coopera-tive. It is the hope of AMS, NRCS, WFRCDC, andFAMU that other small farmers can use the NewNorth Florida Cooperative’s example as a blue-print to design their own cooperative efforts.

Jackson County Empowerment ZoneEmpowerment Zones and Enterprise Communi-ties (EZ/EC) is a Presidential initiative designedto afford communities real opportunities forgrowth and revitalization. More informationabout the EZ/EC initiative can be found at

www.ezec.gov. Its mission is to create self-sustain-ing, long-term economic development in areas ofpervasive poverty, unemployment, and generaldistress, and to demonstrate how distressedcommunities can achieve self-sufficiency throughinnovative and comprehensive strategic plans.The EZ/EC program measures itself by its successin providing the following:

• Economic opportunity

• Sustainable community development

• Community-based partnerships

• Strategic vision for change

The Marianna, FL, Chamber of Commerce nomi-nated a region of Jackson County as an Empower-ment Community. The application was acceptedby the EZ/EC program. The vision of communityleaders calls for the development of economic self-sufficiency for all citizens. The strategic plan callsfor development of small businesses, provision forindustrial expansion, and establishment of familysupport systems. Employment opportunities forunskilled workers are presently limited to low-wage jobs in large retail and wholesale tradesectors or service occupations totaling 3,000 and1,000 jobs, respectively. According to 1990 Censusdata, the average wage for residents of JacksonCounty was $7.53 per hour.

Rural Empowerment Community within JacksonCountyState: FloridaCounty: JacksonCommunity population: 16,247Community area size: 332 square milesPoverty rate: 29.5 percentUnemployment rate: 7.2 percentPer capita income: $9,645.00Education: 61.2 percent of residents lack a highschool diploma.

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The Empowerment Community in JacksonCounty wants to build a future in which youngpeople will remain in the community after gradu-ation from high school, farmers can make a goodliving from their land, and businesses can prosperwith access to capital and necessary technology.Many of the everyday challenges in Americatoday are magnified in rural America by poverty,neglect, and long travel times to work, shopping,and other needs.

The Jackson County Development Council, Inc.(JCDC) is a community-based, nonprofit organiza-tion established to implement and administer theEnterprise Community 10-year Strategic Plan.JCDC’s mission is to work with the community toincrease economic opportunity for JacksonCounty residents. Under its Rural Support Pro-grams, the JCDC operates a Revolving Loan Fund(RLF) program to provide financing for ruraleconomic development projects for the creationand expansion of small businesses and industrieswithin Jackson County. The aim of RLF is tobroaden and diversify the economic base, encour-age capital formation for local entrepreneurs, andcreate private-sector jobs for low- and moderate-income families. Funds are made availablethrough USDA’s Intermediary Lending Programand the West Florida Electric Cooperative.

In its early stage of development, the Cooperativeneeded finances to buy refrigeration equipment.This was one of several critical issues affecting thecontinued existence of the Cooperative. TheCooperative had neither credit history nor consid-erable assets. The New North Florida Cooperativeapproached the JCDC, which is responsible formaking EZ/EC funds available in the form oflow-interest loans. The Cooperative was approvedfor a low-interest loan.

The Federation of Southern CooperativesThe Federation of Southern Cooperatives (Federa-tion) provides self-help economic opportunitiesfor many low-income communities across theSouth. It is the only organization in the SoutheastUnited States that has as its primary objectives theretention of African-American owned land andthe use of cooperatives for land-based economicdevelopment. The Federation’s membershipincludes 12,000 African-American farm familieswho work through 35 agricultural cooperatives topurchase supplies, share technical expertise, andmarket their crops. The Federation owns andoperates its Rural Training and Research Centeron 850 acres of land near Epes, AL, where itteaches production techniques, business skills,and cooperative practices. Federation programsare carried out through a network of cooperativesand credit unions from the Carolinas to Texas.They help to develop self-supporting communi-ties by increasing income and enhancing otheropportunities. The Federation assists in landretention and development for all family farmers,especially African-Americans. The Federation isan excellent source of information for a group ofsmall farmers interested in organizing a coopera-tive. The Federation also has important contacts atthe Federal, State, and local levels of governmentwhich may be helpful to small farmers.

The Federation was instrumental in facilitatingconnections among the group of small farmerswho would eventually become the New NorthFlorida Cooperative, AMS, NRCS, and theGadsden County School District. In 1996, theFederation held a meeting in Atlanta to discussthe potential for limited-resource farmers sellingagricultural products to local schools. Contacts,and, eventually, working relationships amongAMS, NRCS, FAMU, and the Cooperative beganat that meeting.

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The Cooperative is an active member of theFederation. This has been beneficial to the Coop-erative and the Federation. In one instance, due tounforeseeable crop loss, the Cooperative turned tothe Federation for assistance. The Federationarranged for one of its members in Georgia toprovide leafy greens to the Cooperative. TheFederation’s assistance in this case was crucial inmeeting a delivery deadline and building cus-tomer confidence. The Cooperative has providedthe Federation with a textbook example of how acooperative of limited-resource growers candevelop into a successful business. The Federationawarded its Cooperative of the Year Award in1998 and the Cooperative on the Move Award in1997 to the New North Florida Cooperative. TheFederation has been able to use the success of theCooperative to encourage other minority andsmall farmers in the Southeast to take advantageof cooperative marketing opportunities.

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OrganizationOver the past 2 years, establishing a strong organi-zational structure has eliminated many communi-cation problems among the management team,participants, and others directly involved with theCooperative. By clearly defining duties of themanagement team and the participants, manycases of misunderstanding and “ruffled feathers”have been avoided. Effective organization hasenabled the Cooperative to:

• Make decisions quickly.

• Clearly define the roles of participants and themanagement team.

• Demonstrate a united purpose to lendinginstitutions, government agencies, and custom-ers.

• Develop and conduct efficient business prac-tices.

• Move toward a common goal.

The following sections describe the cooperativeorganization and its evolution over the 2-yearpilot project.

First MeetingThe first meeting is a critical point in the longprocess of developing a cooperative. A group ofsmall farmers from several counties in northernFlorida, who would eventually develop into theNew North Florida Cooperative, met at theFAMU, Research and Extension Center, in Quincy,FL, on May 19, 1997, to organize and develop apotential market for farm-fresh produce. The firstorder of business was to select a managementteam. The farmers selected Glyen Holmes (NRCS)as chairman and Vonda Richardson (FAMU),Sophia Glenn (FAMU), and Charles Connerly(WFRCDC) as team members

Development of the Cooperative

The next order of business was to identify ob-stacles that could prevent the success of thefledgling Cooperative. These included:

• Limited-resource farmers going out of business(external).

• Keeping participants focused on one marketwhile building a cooperative (internal).

• Dealing with destructive attitudes and percep-tions (external and internal).

• Farmers wanting too much out of a cooperativetoo soon (internal).

The first obstacle involved examining the increas-ing incidence of limited-resource farmers goingout of business. A possible solution was to earn areasonable return by selling produce to localschool districts based on fresh market prices. Thiswould provide a supplemental income to smallfarmers, while they continued to operate theirdiversified farm enterprises.

The second obstacle was to keep the participantsfocused on one market while building the Coop-erative structure. Local school lunch and breakfastprograms were selected as the primary market,and the Cooperative would concentrate all itsefforts on supplying that market. It was decidedthat adding any other institutional outlet, such asregional hospitals, local prisons, or other directmarketing opportunities, would detract from thequality of service provided. By concentrating onone market, the Cooperative would avoid a majormistake made by many businesses of “spreadingthemselves too thin.”

The third obstacle was dealing with destructiveattitudes and perceptions. Mentally switchinggears from open market competition with othersmall farmers to working together for the com-mon good of the Cooperative was an obstaclethat had to be overcome. Organizing and partici-pating in a cooperative requires a long-termperspective. Taking a long-term view means

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short-term sacrifices are seen in light of benefits tobe realized 5 and 10 years into the future. Thismay not be easy for a small farmer who pays billsmonth by month or season by season, but it is anecessary step to forming a cohesive, viablecooperative.

The fourth major obstacle was farmers expectingtoo much too soon from the Cooperative. Patienceduring the first few years is critical while a coop-erative is firmly established.

The participants decided that the Cooperativewould be a marketing cooperative to provide itsmembers with processing, storage, transportation,and marketing services. Participants would beresponsible for production and harvest of theproduce. Pickup and delivery to the Cooperative’sfacilities were the responsibility of the manage-ment team, thereby reducing the growers’ liability.The management team would be responsible forprocessing, storage, transportation, and market-ing. This meant that the management team wouldbe responsible for adopting policies, conductingbusiness, developing long-range business strate-gies, keeping the participants informed about thestatus of the Cooperative, paying workers, anddistributing profits.

Advantages and DisadvantagesThe small farmers discussed their individual andcollective problems and possible solutions. Ad-vantages and disadvantages had to be weighedfully before the decision to move forward as acooperative could be made. There were severaladvantages, foremost of which was the utilizationof a local and potentially large market. The grow-ers recognized that the school lunch and breakfastmarket could be satisfied with a minimum oftransportation and logistics. They realized thatthey would receive a better price for their produceif they pooled their resources, while also being

able to purchase inputs at lower costs. A finaladvantage considered was the ability to have alouder voice, as a cooperative, in local, State, andFederal governments for a wide variety of rea-sons, including the availability of technical assis-tance.

One disadvantage of a cooperative was that itwould not allow for individualism. Small farmers,who had always worked individually in a com-petitive market, would be encouraged to worktogether with other farmers. After weighing theadvantages and disadvantages, the participantsdetermined that the advantages of the businessopportunity to sell directly, as a cooperative, toschool districts easily outweighed the effort itwould take to correct many of the negative,traditional, barriers and perceptions.

Participant CommitmentThe first official order of business was for allparticipants, including the management team, tocome to an agreement. This verbal agreement setdown what was expected of participants and theCooperative. First, participants agreed that theCooperative concept and a pilot project providingagricultural products to local schools was a trial,with no promises and no guarantees.

Second, participants and the management teamwould commit to the Cooperative and its success.Participants recognized that making the Coopera-tive work would require a lot of hard work and asubstantial time commitment.

Third, and directly related to commitment to workhard, was a commitment to teamwork. TheCooperative’s success depended upon its partici-pants working together as a team. Teamworkwould be needed to meet delivery schedules,improve the Cooperative, and develop a positivereputation with local food service directors.

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Figure 4. A field of nutritious collard greens ready for harvest

Fourth, the Cooperative would compensate thegrower for a harvested crop at the time it waspicked up. This was very important to the limited-resource growers. Payment at pickup time wasessential because the grower had already paid forseed or plants, fertilizer, irrigation, and laborcosts, sometimes 2 or 3 months before harvest.Last, participants would not be held individuallyresponsible for the financial debt of the Coopera-tive. Rather, debts incurred by the Cooperativebelonged to the Cooperative as an organizationand not to its individual participants. If the Coop-erative failed and owed money, the equipmentand financial resources of the Cooperative wouldbe used to pay the outstanding debt.

Cooperative participants agreed that the farmerswould be responsible for all production inputs,growing, and harvest. The management teamwould set the production standards and productspecifications for leafy greens and other freshproduce. The management team was also respon-sible for determining:

1) Types of crops to be grown.

2) Revenue distribution—an agreed-upon portionreinvested into the Cooperative and an agreed-upon percentage paid to members.

3) Who would grow what and where.

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4) Purchase of postharvest handling supplies andequipment.

Cooperative OrganizationAt this early stage, the Cooperative had a verysimple organization. The management teamprovided leadership, organization, market devel-opment, planning, coordinating, processing,storage, and delivery. As the Cooperative devel-oped and its participants became more comfort-able with the cooperative concept, the organiza-tion evolved into a more traditional cooperativestructure. The management team is not a perma-nent group, but a group that changes according toCooperative and participant needs. Changes inschedules, family responsibility, health, and otherfactors can limit the responsibilities a participantcan assume. Interest, confidence, and educationhave caused some participants to assume greaterresponsibility and become members of the man-agement team. After 2 years, the managementteam consists of eight members. Over the 2-yearpilot project, the management team made toughdecisions and managed the details of the day-to-day operations to deliver high-quality produce onschedule.

EducationThe Cooperative and its participants have learnedabout equipment purchase and market develop-ment through research and old-fashioned trial anderror. In some situations, including productionand logistics, trial and error was the only way totruly determine what worked.

Education provided by FAMU and NRCS, bothone-on-one and classroom instruction, was criticalto bringing this group of limited-resource growersto a state of efficient production. It is a big step to

go from growing a few rows of garden greens forpersonal use to production of several acres withspecific, targeted amounts and harvest dates.Education and other learning experiences helpedthe participants in production with regard to:

• Varieties: To build the business around a keyproduct, several produce varieties were exam-ined with respect to production inputs, return,and customer acceptance. The Cooperativechose leafy greens and then investigated differ-ent varieties of collard and turnip greens. Thebest varieties for handling, storage, taste, andinstitutional use were selected.

• Fertilizer: Optimum amounts of fertilizer withthe best ratios were determined through experi-ence and used to determine application rates.

• Schedules: Planting and harvesting scheduleswere established to meet the commitments ofdelivery amounts and schedules.

• Elimination of Waste: Realistic productionvolumes and a safety level for leafy greens weredetermined for varieties and spacings. Thisinformation was used to eliminate excess cropsthat would otherwise have to be plowed under,improve farm efficiency, and lower productioncosts.

Record keeping has been especially important inimproving the growers’ production efficiency.Record keeping was improved with regard to:

• Break-Even Point: Record keeping educationfor the participants has enabled them to trackinput resources, amounts, and costs. It hashelped participants determine their break-evenpoint and establish prices that allow for areasonable profit.

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• Time: Time and labor that a grower invests inthe production of leafy greens or other producevarieties is recorded. Reviewing these recordshas resulted in better time management andimproved efficiency.

• Future Loan Approval: Accurate record keep-ing and accounting are very important, if aparticipant wishes to apply for a loan. Recordsshowing a profit over several years will greatlyimprove the applicant’s chance for loan ap-proval.

An understanding of general business practiceswas essential before the Cooperative could sell itsfirst pound of produce to any school. The manage-ment team has been actively engaged in learningabout the following aspects of business:

• Market Research: Market research is critical toany business. The management team took aclose look at the local school districts and theirschool lunch programs. Participants’ childrenwould regularly bring home school lunchmenus. The management team paid strictattention to the nutrition requirements, fre-quency, and cyclical nature of the menus.

• Market Supply: The management team re-searched the nutrition of different producevarieties served in the School Lunch Program. Itresearched the number of students who atelunch at the local schools. Standard servingsizes were then used to work backward to thenumber of pounds of leafy greens needed tosupply an entire school district. Additionalcalculations resulted in the acreage of cropneeded for each delivery.

• Customers’ Needs: The management team alsomet with local food service directors to under-stand their needs and requirements for leafygreens and other produce items. This informa-tion was used to determine proper equipmentand handling practices for the Cooperative.

• Logistics: No amount of research could substi-tute for trial and error learning when it came tologistics. Handling, transportation, and distri-bution procedures were improved throughlearning experiences and time.

• Cooperative Law: To form a legally recognizedcooperative, the management team had to learnabout the laws of the State of Florida. Workingwith the State and a local lawyer, the teamunderstood the laws and agreed to the detailsbefore filing the charter.

• Business Finances: Understanding businessfinances, including payrolls, payments, in-voices, loans, profits, purchases, and reinvest-ing in the Cooperative, was accomplished byboth research and trial-and-error.

• Equipment: Research on equipment perfor-mance, operation, maintenance, cost, andfinancing was crucial in the development of avalue-added cooperative.

The Cooperative has conducted many activities tohelp educate the participating and surroundingsmall farmers in the areas of production, market-ing, financial planning, record keeping, andpostharvest handling. The Cooperative regularlyholds field-day events as educational and out-reach forums. Some field days are targeted specifi-cally toward small farmers’ needs. At these meet-ings, agricultural production specialists fromregional universities discuss the latest production,nutrient management, and bio-control practices.Alternative crops for niche markets are alsoconsidered. These sessions not only provide anexcellent opportunity for small farmers to im-prove their operational efficiency and effective-ness, but also serve as morale boosters. They cansee and hear firsthand how AMS, NRCS, WFRCDC,and FAMU are working to overcome the chal-lenges facing the small farmer. They gain a senseof being part of a dynamic group and witness theevolution and progress of the Cooperative.

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Some of the field days are designed to reach out tothe community and provide information on whatthe Cooperative wants to accomplish and itsprogress. These meetings have provided word-of-mouth advertising to prospective Cooperativeparticipants and potential customers. Outreachspecialists from several universities have ex-pressed interest in the pilot project and theCooperative’s success. The most recent field daywas held with the sole purpose of encouragingreplication of the Cooperative’s efforts across theSoutheast.

The Cooperative has provided additional educa-tion to small farmers by participating in demon-stration projects. In the spring of 1998, the Coop-erative set up a 1-acre demonstration project withmuscadine grapes. The Cooperative investedresources in seedlings, land, posts, support cables,and labor. The Cooperative is interested in investi-gating other potential niche market opportunities,including muscadine grapes and value-addedproducts made with the grapes.

The Cooperative also educates its participants byencouraging field trips. By attending variousmeetings, the Cooperative and its participantsnetwork with other small farmers and coopera-tives across the country who are trying new andinnovative marketing techniques. The Coopera-tive then channels these new ideas into its ownmarketing activities.

The Cooperative also participates with the SmallFarmer Training Outreach and Technical Assis-tance Program, in holding meetings on financialplanning and record keeping for its participants.The meetings address financial planning prin-ciples and record keeping and demonstrate thenecessities and benefits of these business practicesas well as basic procedures. The Cooperativestresses the importance of financial planning andrecord keeping in dealing with lending institu-tions.

Education, combined with an innovative market-ing concept, dedicated participants, and solidorganization, has been essential to the survivaland success of the Cooperative. Education hasremoved false perceptions and impressions. Intheir place, the Cooperative now has the knowl-edge and understanding of aspects critical to asuccessful, profitable business.

Business VolumeAlthough producing and marketing strawberries,blackberries, muscadine grapes, and cabbage werediscussed, the farmers settled on leafy greensbecause of their experience in growing them andtheir nutritional value. A target of 2,000 poundsper month was agreed to as a realistic volume.This would provide the Cooperative with work-ing income, but would not initially overwhelm theparticipants. In only 2 years, the Cooperativesurpassed this goal. Increased market demand,processing capabilities, and a solid reputation as aproduce vendor resulted in over 4,000 pounds ofleafy greens being sold in April 1999.

The location of the Cooperative and its businesscharacteristics also had to be determined. TheCooperative chose a 40-acre tract of land west ofMarianna in Jackson County as a central locationfor storage and handling. The next step was todetermine the location of the customers. TheCooperative selected the Gadsden and JacksonCounty school districts because of their proximity.At this early stage, supplying product to morethan two school districts could cause supply andlogistics difficulties. The Cooperative mightbecome overextended, resulting in less thanperfect service or missed deliveries. Anotherconcern was overwhelming the participants withnumerous orders, long hours, and excessivecommitments.

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The operating methods used by the schools alsopresented a challenge. In Gadsden County, 15individual schools with 13 separate preparationkitchens were spread over a large area, a logisticalchallenge to effective delivery of leafy greens. TheJackson County School District had a similar foodpreparation system. Also, deliveries had to bemade within 1-2 days of the serving date. Thisconstraint was caused by storage requirements forfresh produce items and the time needed by thefood service kitchen staff for food preparation.

The school food service directors were interestedin serving leafy greens regularly during the schoolyear because of their nutritional and fiber value.The food service director of the Gadsden CountySchool District met with the Cooperative manage-ment team and worked out a schedule that wouldboth provide the children with fresh, leafy greenson a regular basis and set realistic productionlevels for the Cooperative (appendix 1).

Opinions of Cooperative ParticipantsAlthough there was some skepticism about howwell the Cooperative would work, most partici-pants were enthusiastic once the basic structureand operating practices were established. TheCooperative relieved the direct pressure of pro-cessing and marketing, allowing the participantsto focus on growing a crop and harvesting it on anagreed-upon date. The participants were requiredto meet the labor needs for processing if part-timehelp was not available. The financial risk ofpurchasing, processing, and storage was not theresponsibility of the participants. The Cooperativetook on the responsibility of cultivating customersand developing a local market. Participants werepleased that the Cooperative would pay thefarmer upon pickup of produce. The Cooperativeeliminated the delay time for payment to peoplewho could not afford to wait. This practice wasmade possible after the Cooperative had accom-plished several deliveries and set aside funds forimmediate payments.

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Business PlanThe Cooperative business plan consisted of twoparts. First was the operation of the Cooperative,which provided education, marketing, and tech-nology transfer to its participants. The manage-ment team worked closely with NRCS and FAMUto provide the participants with information onadvanced production techniques, integrated pestmanagement practices, and record keeping to givethem a competitive edge. Building a strong cus-tomer base was an important management func-tion, as was its responsibility for technologydevelopments, including continual improvementsin processing techniques, postharvest storage, andadapting packaging to meet customer needs.

The second part of the business plan was organi-zational. The organization provided by the Coop-erative and management team clearly defined thepositions and responsibilities of everyone in-volved with the Cooperative. In the early stages ofthe Cooperative, this was especially important toeliminate misunderstandings, poor communica-tion, and other organizational tensions. Themanagement team provided leadership, short-and long-term planning, pickup of product,processing, and delivery. It also handled businessdealings as a single body, including customerservice, and banking business.

Vision StatementThe management team developed a vision state-ment for the Cooperative. The vision statementresulted from in-depth discussions and reflects thefuture the Cooperative sees for itself.

The New North Florida Cooperative will bea service cooperative providing education,marketing and technology transfer in orderto provide a competitive edge for smallfarmers in the northern Florida region. Theincome generated from the value-added

Building a Business

business will flow to and within the localcommunity. The Cooperative’s businesswill be primarily targeted to providingfresh, healthy agricultural products to localschool districts throughout the entire schoolyear. The Cooperative will grow, process,and deliver 50,000-60,000 pounds of greens amonth. The Cooperative will also developseveral additional lines of fruit and veg-etables that will be produced and sold asadditional sources of revenue.

Strengths and Weaknessesof the CooperativeThe management team took a realistic look at theinternal strengths and weaknesses of the Coopera-tive. The Cooperative had the education andexperience needed to provide the participantswith more efficient production practices for leafygreens. Their background was a strength when itcame time to develop a market and cultivatecustomers. With its contacts in AMS, NRCS,WFRCDC, and FAMU, the management team wasable to facilitate technology transfer, which im-proved production practices as well as storage,processing, and packaging.

Equipment Purchase: Equipment is not readilyavailable to individual limited-resource growersbecause of the initial investment required. TheCooperative purchased and maintainedpostharvest handling, processing, and packagingequipment which enabled its limited-resourceproducers access to otherwise unattainable re-sources.

Debt Financing: A major problem of limited-resource farmers today is debt financing. As aCooperative, participants were able to obtaincredit when it was not possible for the individualfarmer. The Cooperative provided a necessaryconduit for much-needed capital to be invested inequipment.

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Good Business Practices: Headed by the Coop-erative management team, the organizationfacilitated a growth strategy, vision, and short-and long-term planning. The management teamreviews existing Cooperative business operationsand allows for adjustments in production, pro-cessing, and delivery to meet the needs of themarket.

Inexperience: One weakness of the Cooperativewas its inexperience. The participants had neverbeen part of a business organization. The manage-ment team was also learning as it proceeded withestablishing a cooperative, developing a market,and operating under good business practices.However, the experiences of the first 2 years havereplaced the previous inexperience with an under-standing of good business practices and a con-structive level of confidence.

Mission StatementThe New North Florida Cooperative pro-vides fresh, healthy agricultural products ata fair price to local School Lunch andBreakfast Programs. The Cooperative isresponsible for the marketing, handling,processing, and delivery services of agricul-tural products produced by participatinglocal small farm operators. The Cooperativewill meet the needs of local small farmoperators by facilitating the flow of profitfrom the value-added business operation toand within the local community.

Values StatementThe New North Florida Cooperative will behonest, loyal, and fair to customers andparticipants. The Cooperative will deliverthe highest possible quality agriculturalproducts grown by local limited-resourcefarmers.

The vision statement points to where the Coopera-tive wants to be; the mission statement showshow it is going to get there; and the values state-ment is used as an ethics guide.

Evaluating Barriers and OpportunitiesThe management team had to evaluate the barri-ers and opportunities facing the small farmers andthe Cooperative in this alternative marketingventure.

Weather (external): To fully meet the needs oflocal school food service directors, leafy greensneed to be harvested during the entire school year,September through May. For leafy greens to beharvested early in the school year, they have to begrown in the heat of summer. Leafy greens arecool-weather crops and usually don’t do well inthe extreme heat of a Florida summer. Lack ofrainfall during the summer necessitates the use ofirrigation. Mild weather during the rest of theyear makes northern Florida an excellent area togrow greens throughout the school year. Anoccasional cool period during the summer allowsfor crop replanting to recover from heat-stressedcrop failure.

Capital (internal): The Cooperative overcame itslack of credit history through its association withAMS, NRCS, FAMU, and especially WFRCDC,organizations which lent credibility to the Coop-erative. Once accepted for credit, the managementteam had to monitor closely the business manage-ment plan, paying back the principal and payingoff the interest. Local banks were charging 10percent interest, but USDA’s Farm Service Agencyprovides loans at 6.25 percent. The other optionavailable was to access EZ/EC funds through theJackson County Development Council.

Government Regulations (external): The Coop-erative investigated a range of Federal, State, andlocal government regulations concerning handling

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and processing produce for the local schools. Inaddition, the Cooperative filed paperwork (ap-pendix 2, Department of Defense Order for Sup-plies or Services Form) with the U.S. Departmentof Defense (DOD) to become a School LunchProgram provider. The Cooperative had to followFlorida Department of Health food safety require-ments for delivering to schools. The Cooperativealso used government requirements as a guidewhen purchasing equipment and establishing itsprocessing/handling procedures. Although theserequirements could have been seen as a barrier,the Cooperative used them as guidelines to set uptheir operations.

Social Attitudes (internal and external): Thesmall farmers and the Cooperative had to combatnegative social attitudes. Foremost among thesewas the reluctance of limited-resource farmers towork together. A farmer who adopts an attitude of“I farm alone,” has to turn 180 degrees to becomea productive member of a cooperative.

The Cooperative had to demonstrate to the public,and more importantly to the local food servicedirectors, that small farmers could work together.The management team was crucial in presenting aunified Cooperative organization when develop-ing working relationships with food servicedirectors.

Many small farmers are reluctant to diversify theiroperations, resulting in another barrier. A com-mon sentiment is, “I have been growing this cropfor years, and I‘m going to stick with what Iknow.” A small farmer may be afraid to startgrowing fruit or vegetables on a relatively largescale with little or no experience. However, manysmall farmers can see that they need to change tostay in business. The decrease in and eventualtermination of price support programs for severalcommodities have forced farmers to considerdiversifying their operations in order to stay onthe family farm.

Preferences (external): School food service direc-tors who have long-established suppliers may notbe interested in working with a newly formedcooperative. They may not want to risk a changein quality or problems with delivery. As a newbusiness, the Cooperative had to provide itscustomers with high-quality product, promptdeliveries, a fair price, and courteous service.Only by providing these things could the Coop-erative become the vendor of choice for the localschool food service directors.

Marketing Opportunities (external): Currently,there is no real competition in this niche market. Itwould not be feasible for large producers toconcentrate on such a small market, and there isno small cooperative or group currently involvedin marketing exclusively to school food services,either in the Florida Panhandle area or the South-east United States. The opportunities open to theCooperative were unique. With no competitionfrom big producers, small farmers, or other coop-eratives, the Cooperative has captured a nichemarket uniquely suited to its capabilities.

Evaluating Strategic Options for BusinessIn evaluating strategic business options, theCooperative encountered several technical barri-ers, mostly related to postharvest handling andprocessing. Cooperative participants did not ownany of the necessary equipment and had littleexperience with that type of machinery. TheCooperative knew that the equipment needed forproper postharvest handling and processingwould require a substantial investment. It wasagreed that the Cooperative would graduallymove forward with goals of refrigerated storage,processing machinery, transportation equipment,and a stable day labor force.

Marketing: The management team of the Coop-erative met with the food service director ofGadsden County and listened to her needs. Fresh

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produce is preferred to frozen or canned items.She wanted to serve as many fresh fruits andvegetables as possible. This provided an excellentmarket for the Cooperative. Based on the schoolyear and the ability to deliver fresh, locally grownproduce, cool-season varieties were selected. Thismade production easier and allowed the Coopera-tive to supply and deliver for most of the schoolyear. Also, the Cooperative decided to considersome warm-season produce that would be sup-plied and delivered early in the school year, late inthe school year, and during summer school ses-sions.

Postharvest Handling and Processing: TheCooperative as an organization would provideservices that the limited-resource growers couldnot. The management team and Cooperativeparticipants accepted the labor-intensive methodsused in processing and postharvest handling inthe early stages of the business. It soon becameclear that storage, processing, and deliveryneeded to be improved. The need for refrigeratedstorage was clearly evident when a load of leafygreens was lost to warm conditions the nightbefore a delivery date. Refrigeration would alsoextend the processing period. Refrigerated storageallowed the value-added processes for the fresh,leafy greens to be staggered over several daysbefore a delivery. The Cooperative could fill largerorders and reduce pressures on day laborers. TheCooperative also needed to improve the efficiencyof its processing phase, which at that time wasdone by hand. The Cooperative started to investi-gate cutting machines that would meet its needs.

Delivery: Local food service directors neededprompt deliveries to outlying schools that hadtheir own kitchens. From the Cooperative’s pointof view, this was a logistical difficulty. To ensurethat the delivered products were of the freshestquality, a maximum delivery time of 11/2 hourswas agreed upon. This would enable the Coopera-tive to serve many of the distant, rural schools

while still maintaining the high quality of theleafy greens. By working hard to develop a suc-cessful delivery system, the Cooperative providedthe service to meet the needs of the customer.

Community: The Cooperative’s values statementmakes it clear that the management team andCooperative participants will treat everyone in afair, honest manner. This was essential to encour-aging other local small farmers to participate inthe Cooperative and to maintaining its businesswith the school districts. School food servicedirectors have many choices of food vendors. ACooperative that bases its business practices onintegrity, honesty, and professionalism can be seenas a valuable member of the community and awise choice as a vendor to public institutions.

Strategic Plan DefinedEarly in the Cooperative’s first year, the manage-ment team developed the following strategic plan:

The strategy of the New North FloridaCooperative is to increase farm income ofsmall farmers through niche marketing,value-added processing, and alternativeenterprises. The Cooperative business planwill be developed to serve local schooldistricts with fresh, leafy greens as ahealthy portion of the School Lunch Pro-gram. In addition to the main product ofleafy greens, the Cooperative will alsodiversify into other produce varieties.

The strategic plan describes how the Cooperativewill overcome its internal and external barriers,while taking full advantage of its strategic op-tions. To implement the strategic plan, the Coop-erative set up several objectives, which were usedto measure performance. These objectives wereshort-term, practical, specific, measurable, andresults-oriented. For each objective, the Coopera-

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tive developed a detailed action plan that outlinedaccomplishments and timeframes. Developingthese specific action plans provided a roadmap forday workers, participants, and the managementteam and gave them a clear understanding of theirown and each other’s responsibilities. As theCooperative progressed, the action plans provideda measure of accountability. These objectives aredescribed below.

Objective #1: Meet all established delivery dead-lines.

Food service directors were committed to prepar-ing the leafy greens on certain days and wereconstrained by published menus. Meeting deliv-ery deadlines would show that the Cooperativewas a responsible business that upheld its com-mitments. Developing a level of confidence withlocal school food service directors would beessential in future business practices. The Coop-erative was aiming for 100 percent on-time deliv-eries.

The action plan for this objective was to start withthe target date and times for delivery and workbackward. That meant having participants ormanagement team members make the deliveries,coordinate postharvest handling/processingprocesses, and find dependable part-time work-ers. Over the first school year, the Cooperativeachieved a 90 percent success rate, with onemissed delivery caused by weather and equip-ment problems. The Cooperative achieved a 100-percent success rate in its second year because itlearned from its mistakes and made equipmentimprovements.

Objective #2: Purchase a cutting machine toeliminate the cumbersome chore of hand chop-ping large amounts of leafy greens.

The workload of participants and day laborerswas taking its toll on morale. This, combined with

time limitations dictated by lack of refrigeratedstorage, proved very difficult for the Cooperative.

To implement the action plan, the managementteam found a cutting machine that would meet itsneeds at a reasonable price. For financing, theyapproached the JCDC, which makes loansthrough the EZ/EC project, and were approvedfor a low- interest loan.

Objective #3: Purchase refrigerated storage.

The quality of the products, whether leafy greens,strawberries, blackberries, or muscadine grapes,would depend upon refrigerated storage.

To carry out the action plan, the managementteam conducted market research to find the mosteconomical refrigeration system that would meetthe Cooperative’s needs. The Cooperative thenpurchased a used refrigerated trailer from a localtrucking company at a reasonable price. Thetrailer was 48 feet long, providing enough space toaccommodate their current operation with sub-stantial room for expansion. They financed thetrailer purchase at a local bank. The bank ap-proved the loan based on the Cooperative’s intentto initially sell products to local schools and on thesupport provided by two USDA agencies at boththe local and national levels.

Objective #4: Purchase a trailer for deliveries.

The action plan for this objective was to set asideenough money to pay for a used trailer and thenfind a reasonably priced trailer optimal for re-quired deliveries. This objective was not metduring the first year of operation, and the Coop-erative used a participant-owned van to makedeliveries. Investments in the Cooperative’sprocessing shed and the payments on the equip-ment loans prevented another large purchase. TheCooperative was able to meet the objective thesecond year. The Cooperative used its own funds

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and purchased an enclosed trailer that greatlyimproved the efficiency of deliveries.

Objective #5: Build a packing shed to house thecutting machine and rinsing sinks and provideshelter for participants.

The action plan called for the Cooperative toprovide the materials and the participants to buildthe structure. They built a simple wood-framestructure with electrical and water service. Locat-ing the postharvest handling and processingindoors was important to the comfort and moraleof the participants. The Cooperative is continuingto improve the building as resources permit.

Objective #6: Become a certified Governmentvendor.

This allows the Cooperative to participate inDOD’s Direct Vendor Delivery (DVD) program.DOD is responsible for delivering commoditiesand overseeing the supply of the School LunchProgram.

The management team contacted the DefenseSubsistence Office (DSO) in Jacksonville, FL, andfilled out the appropriate form (appendix 2 ). TheCooperative worked with DOD to meet DOD’scertification requirements and became a certifiedvendor.

Objective #7: Market leafy greens to the localschools and diversify into other varieties ofproduce.

To implement the action plan, participants planted1 acre of strawberries at the Cooperative’s centrallocation, on raised beds with black plastic mulchand a drip tape irrigation system. The participantswere responsible for the production and harvest,and the management team was responsible for themarketing and delivery.

Next, the participants planted muscadine grapesfor future sales. The Cooperative provided theland, materials, and the root stocks of somepromising varieties. The participants provided thelabor.

The action plan to meet the objective of diversify-ing the Cooperative’s produce sales was accom-plished. The strawberry test produced a fairamount of berries that were sold to local schoolsfor salad bars, desserts, and breakfasts. Themuscadine grapes were planted and supporttrellises built in the spring of 1998. Since it willtake several years to realize a return on the musca-dine grapes, this operation represents a long-terminvestment of time and resources.

The Cooperative continues to grow and is devel-oping its vision of a stable, profitable business.The management team modifies the strategic planas necessary. The accomplishments of the first 2years have enabled the Cooperative to redefine itsstrategic plan, allowing it to identify new objec-tives and achieve those left incomplete.

Establishing CreditA cooperative needs capital to finance businessoperations and make necessary purchases. If acooperative doesn’t have sufficient capital, it willhave to incur debt. There are two types of debt:short-term and long-term. Short-term loans areused to finance operating expenses or materialinputs and are paid back usually within a year.Long-term loans are obtained to finance fixedassets, such as land, equipment, or vehicles.

The Cooperative needed to borrow money fornecessary postharvest equipment. However, toacquire a loan from a traditional lending institu-tion, a borrower must have good credit or sub-stantial collateral. Since the Cooperative was newand made up of limited-resource growers, it didnot have a credit history.

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The participants did not want to put their ownfarms or businesses in jeopardy. Their personalassets were never at risk, however, because acooperative, as an entity, is responsible for its owndebts.

In preparing to meet with lending institutions, themanagement team identified several things that itbelieved should be conveyed to lending institu-tions and loan officers.

• Written proposal

• Professionalism

• Seriousness of purpose

• Certification as a DOD vendor

• Proven success

• USDA cooperation at local and national levels,which demonstrated credibility

The management team prepared a written pro-posal detailing the need for the loan and chose aspokesperson.

The management team provided a copy of itsDOD Order for Supplies and Services certification(appendix 1) to the lending institution. The DODcertification lent credibility to the Cooperativefrom an agency of the Federal Government.

In approaching lending institutions for assistance,the Cooperative showed that it was alreadymeeting a delivery schedule with the local schooldistrict and that it was not requesting money forinitial startup costs, but, rather, to purchaseequipment to improve the existing business andlead to expansion. The Cooperative’s credibility asa vendor was established by an endorsement fromthe food service director for the Gadsden Countyschools.

The Cooperative’s credibility was further en-hanced by the fact that USDA was workingclosely with it at both the local and national levelsby providing technical expertise and resources.

The Cooperative wrote up a formal proposal foreach loan, clarifying the Cooperative’s position. Inwriting the proposal, the management team setdown major details of the needed equipment andits business uses.

Importance of Postharvest HandlingProviding fresh, healthful produce to local schoollunch programs requires special postharvesthandling practices and equipment to ensureproduct of the highest possible quality. The pro-duce should look healthy and have a good color.Texture is also important: Items should be crisp,crunchy, and firm and exhibit the necessarytextural trait appropriate for that produce variety.Products are also expected to have a pleasantaroma. If produce items have an “off” smell, theproduce may not be salable. The final and mostimportant criterion for produce quality is taste.This is very important to school food servicesdirectors because they provide these products tochildren, who can be demanding customers.

Nutritional value is another criterion that a schoolfood service director will use to evaluate produce.This may cause a food service director to beinterested in purchasing only particular varietiesof produce and to carefully evaluate the quality ofthe varieties chosen. The fresher, higher qualitythe produce, the greater the nutritional value.

Proper postharvest handling requires specificpractices and equipment to maintain all aspects ofproduce quality. The Cooperative realized that inorder to provide the best possible products to itscustomers, it would have to invest in severalpieces of postharvest handling equipment.

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EquipmentThe Cooperative began providing leafy greens tolocal school districts without any specializedequipment. Greens were processed by hand,washing was done in large steel tubs, and chop-ping was done by hand with knives. There was norefrigeration system so there was no storagecapacity. As a result, harvest and processing hadto be done the day before delivery, a labor-inten-sive and tiring procedure for participants and daylaborers. The work often went on until late atnight. To continue in business, the Cooperativeneeded equipment to add value as well as de-crease labor inputs.

Packing/Processing Shed: A packing/processingshed was needed to provide a dry place to storeand operate equipment. The Cooperative pur-chased the materials for the building, and partici-pants supplied the labor. The Cooperative pack-ing/processing shed measures 15 by 25 feet,providing ample space for equipment and roomfor participants and day laborers to work comfort-ably.

Cutting/Chopping Machine: The managementteam recognized that chopping greens by handwas labor intensive, time consuming, and unsafe.The management team began talking with otherbusinesses with similar equipment needs and

Figure 5. New North Florida Cooperative’s chopping machine used for processing leafy greens

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found a company that made machinery that metthe Cooperative’s specifications and accommo-dated its financial constraints and participants’use requirements. They chose the “Jumbo Cutter”made by Sunshine Systems of Boulder, CO.

An advantage of this model was that it couldeasily be used to add value to other agriculturalproducts should the Cooperative decide to diver-sify its product line. The cutting machine can cutcarrots, celery, and lettuce, which would enablethe Cooperative to process healthful snacks orprecut salads for local schools. Another importantaspect of the cutting machine was its safety. Thecutting/chopping machine would reduce the riskof injury to everyone involved in the processing ofthe leafy greens. The machine also can be oper-ated by one or two people, an important consider-ation due to fluctuations in labor availability.

Some school food service directors were satisfiedwith the 2-inch cut provided by the machine, butsome required a finer cut. To provide the finer cut,the Cooperative further hand chopped the 2-inchcut greens. This took extra time and effort, butwas necessary to meet the customers’ needs. Afterthe first school year of using the cutting machineand then hand chopping to get the fine cut size,the management team decided that anothercutting machine to cut the leafy greens finer wasneeded. The Cooperative markets the smaller cutsize leafy greens as its “fine cut” line, and its 2-inch cut size leafy greens as its “country cut” line.

Wash Sinks: Leafy greens need to be thoroughlywashed and rinsed. Leafy greens, due to theirproximity to the ground, can become dirty whenrain splashes soil onto the leaves. Soil can bedifficult to wash off and requires close attention.Some people even use old washing machines torinse leafy greens for their own consumption. Inthe Cooperative’s beginning, participants and daylaborers washed the leafy greens by hand in largegalvanized steel bins.

The Cooperative knew it had to improve thisprocess to make it more efficient. When the pack-ing/processing shed was built, the managementteam replaced the large wash bins with stainlesssteel sinks purchased from a local restaurant. Theyare in a convenient location for water hookup anddrainage, situated in a logical, uninterrupted flowfor processing. The purchase and use of the sinkshas improved the efficiency of the entire process-ing procedure for leafy greens.

Refrigeration System and Storage: It soon be-came obvious that the Cooperative needed refrig-erated storage to provide its customers with thehighest quality products.

Refrigerated storage would also eliminate thehectic processing of an entire shipment the daybefore delivery. Spreading the processing over 2or more days provided a more realistic timetableand created a better work situation. It also al-lowed more stable work schedules for part-timelaborers and participants.

Refrigeration would also allow the Cooperative tomarket its produce to other local school districts.The extended shelf life that proper refrigerationprovides can translate into greater delivery dis-tances.

The management team knew it had to act quicklywhen the Cooperative lost a load of leafy greensready for delivery because of one unusually warmnight. The quality of the leafy greens deterioratedso much that the product was not salable. Afterthat incident, the management team made severalcalls and found a local trucking company willingto sell a used refrigerated trailer to the Coopera-tive. The Cooperative obtained the money from alocal bank and purchased the trailer within weeks.Because the Cooperative would use the trailer as asemipermanent structure, it returned the wheelsand tires to the trucking company, saving itmoney on the transaction.

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The trailer is a 48-foot-long Thunderbird refriger-ated trailer with a Carrier refrigeration unit. Sincethe refrigeration system runs on diesel and has atank capacity of 50 gallons, it can run for approxi-mately 3 days. The refrigeration unit has anadjustable thermostat, a useful feature when theCooperative markets products with differenttemperature requirements. The refrigerationcapacity for the trailer exceeds the Cooperative’scurrent needs but will allow the Cooperative toincrease the amount of product handled. TheCooperative also can precool just-harvestedproduce while storing other products at stabletemperatures. This is a useful feature when theCooperative works with different produce variet-ies at the same time or has overlapping deliveryschedules.

Delivery Trailer: The Cooperative purchased anenclosed, single-axle trailer to transport leafygreens and other produce items from the fields tothe processing center and then to the schools. Acooling system from a recreational camper wasattached to the top of the trailer to cool the trailerbefore loading and hold the produce at a rela-tively low temperature during transport. Sheets ofStyrofoam insulation were installed inside thetrailer to protect the produce from the outsideheat. A logo was printed on the side of the trailer,along with the name of the Cooperative and thephrase, “The Pinnacle of Quality,” to establish theCooperative business identity.

Figure 6. Refrigeration system and storage for perishable agricultural products.

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EmployeesThe Cooperative does not yet require the servicesof full-time employees. Cooperative participantsmeet part of the labor needs by helping withwashing, cutting, and bagging as their schedules

Figure 7. Glyen Holmes (left) and Vonda Richardson (right) meet with DOD Defense SubsistenceOffice staff in Jacksonville.

allow. The remaining work is handled by part-time employees. Often they are neighbors ormembers of the local church. Because of thelimited size of the niche market the Cooperativeserves, it does not envision a full-time workforcein the near future.

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Department of Defense Direct VendorDelivery (DVD) ProgramDOD developed the innovative DVD program aspart of the National School Lunch Program. Thegoal of the program is to make larger quantitiesand varieties of healthful, fresh fruits and veg-etables available to school children. The DVDprogram facilitates the purchase of fresh fruit andvegetables and provides assistance to schooldistrict food service directors.

In the State of Florida, 39 counties and approxi-mately 3,000 individual schools participated in theprogram during the 1997/98 school year. Approxi-mately $3.5 million was available for the purchaseof fresh produce through this program in Floridafor the 1998/99 school year.

The Defense Subsistence Office (DSO) in Jackson-ville purchases from around 50 small vendorsacross the State of Florida and 2 small farmer-runcooperatives, including the New North FloridaCooperative. A vendor does not have to be certi-fied to sell produce to schools if the money comesfrom the school district’s food budget. To partici-pate in the DVD program, however, the supplieror vendor must be approved as a certified vendor(appendix 2, Department of Defense Order forSupplies or Services Form). The Defense SupplyCenter Philadelphia (DSCP) and USDA signed aMemorandum of Understanding (MOU) in 1993to provide fresh produce to schools in eight testStates using Group A entitlement money, amount-ing to approximately $3.5 million. In the 1998/99school year, the program expanded to 38 States,and included Guam and Alaska, with a programceiling of $25 million. Schools can purchase fruitand vegetables directly from producers or fromthe DSCP. The DSCP has field buyers that dependon hundreds of small farmers located across theUnited States to provide military troops, commis-saries, Indian Nations, and schools with qualityproduce at the best possible prices. The local DSOrepresentative discusses order preparation, paper-

work procedures, item availability, deliveryschedules, and billing required of project partici-pants. USDA has authorized a listing of 180produce items for this program. Food servicedirectors can purchase from a terminal market ordecentralized market or take delivery directlyfrom the growing fields. If there are any problemswith the delivery, customers are instructed to callthe DSO as soon as possible.

Cultivating Customers in a Local MarketThe Cooperative recognized the tremendousopportunity in serving local school districts withagricultural products. The potential was great, butthere was a risk of not being able to break into themarket. Capturing the local school district marketwould mean the success of the Cooperative. Themanagement team developed a plan to approachthis local market, much as it had approachedlending institutions for business loans. The newlyformed management team needed to convinceprospective customers to buy from a Cooperativewithout any business history. The Cooperativeagain emphasized the following attributes as itapproached school food service directors.

• Professionalism and courtesy

• Seriousness of purpose

• Accountability and commitment

• Sample products

• Certification as a DOD vendor and participantin the DVD program

The management team made an appointment tomeet with the food service director of theGadsden County School District. They describedto her the Cooperative’s history and purpose,discussed their proposed business, and listenedclosely to her food service needs.

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A food service director is responsible for provid-ing healthful, nutritious meals, controlling costs,establishing menu schedules, and meeting Federalguidelines. A food service director needs a seriouscommitment from vendors and suppliers toprovide a high-quality product in the quantityspecified at the time scheduled. The resolve andcommitment of the management team alleviatedmany of the food service director’s initial con-cerns.

Accountability of a vendor or supplier is espe-cially important to a food service director. Thingswill occasionally go wrong. Food service directorsneed to be able to contact someone quickly if thereis a problem. They want to be notified ahead oftime if a delivery will be late or missed completelyso they can make substitutions and adjustments.The Cooperative has been careful to respondquickly to the Gadsden County schools’ foodservice needs, thereby establishing a successfulworking relationship.

Providing free samples of product is a commonmarketing tool used by businesses to developproduct recognition. The Cooperative provided afree sample of 3,000 pounds of washed, chopped,and bagged leafy greens to the Gadsden Countyschools to show the customer that a cooperative oflimited-resource producers could successfullysupply a School Lunch Program with high-quality,local agricultural products. This reinforced theCooperative’s image as a professional, courteous,serious, and accountable business that couldsatisfy the needs of local food service directors.

The management team realized that the Coopera-tive would benefit by being certified as an officialDOD vendor. The management team contactedthe DSO in Jacksonville for the necessary paper-work (appendix 2). Since the Cooperative chopsleafy greens, which DOD considers processing,

DOD required an inspection of the processingfacilities. During that inspection, the managementteam learned of the DVD program, which wouldprovide local school districts substantial savingsand make purchasing fresh produce from theCooperative an appealing option.

The Cooperative’s next step was to build a solidreputation by meeting the needs of its customers.The Gadsden County Food Service Directordeveloped her school year menu and periodicallyincorporated leafy greens as the vegetable choice(appendix 1). The Cooperative provided thenecessary amounts of high-quality, fresh fruit andvegetables on time.

In early March 1999, the management team metwith the director and assistant director of foodservice for the Jackson County School District. TheARAMARK Corp., a contract management com-pany, is responsible for providing approximately7,800 lunches and 2,000 breakfasts daily to theJackson County schools. The management teamoffered to supply two schools with free samples ofleafy greens as a trial. It received a positive re-sponse, and during the remaining school year, theCooperative delivered leafy greens to JacksonCounty schools, as requested (appendix 3).

Word-of-mouth advertising established the Coop-erative as a reputable vendor and is openingdoors of opportunity in other school districts. TheCooperative has decided to continue to concen-trate on Gadsden and Jackson County schools asits primary customers. Its reputation has led tofruit and vegetable sales in Leon and WaltonCounty schools as well. With future improve-ments in organization and equipment, the Coop-erative plans to expand to meet the fresh produceneeds of other local school districts as well ascontinuing to satisfy Gadsden and JacksonCounty School Districts.

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Vending Experiences During the 1997/98School YearThe Cooperative’s mission emphasizes facilitatingthe flow of profit from the value-added businessoperation to and within the local community. Theresult of these efforts provided the participantswith an increase in farm income over the 1997/98school year.

The Cooperative’s main product was cut, leafygreens. Extreme heat and dry conditions de-stroyed or stunted several plantings of the leafygreens during the summer. These difficultiesdecreased the amount of leafy greens available inearly fall 1997 (table 2). As the weather becamemore suitable for leafy green production, quanti-ties increased. A steady supply of leafy greensallowed the Cooperative to provide deliveries oflarger quantities and also to develop a regularschedule in the spring (table 3).

The Cooperative was intent on expanding thenumber of produce items available to localschools. This would increase the flow of profit tothe small farmers and community as well asexpand future market opportunities. Participantsplanted watermelons in the summer of 1997, andthe Cooperative sold them to the Gadsden CountySchool District for school breakfasts and dessertsfor lunches.

The Cooperative wanted to further expand itsofferings with fresh, ripe strawberries (table 4).The timing of the strawberry harvest worked tothe advantage of the Cooperative because itcomplemented the end of the leafy green season.

The Cooperative made significant progress in the1997/98 school year as it initiated its organization,business practices, equipment purchases, andmarket development. In addition, it established acommendable sales record.

Table 3. Delivery schedule for leafy greens in spring 1998

Commodity Amount (lbs.) Date planted Date harvested Date delivered

Collards 1,527 11/10 1/17 1/21

Collards 1,352 11/10 2/28 3/03

Collards 1,527 11/10 3/09 3/12

Collards 1,256 11/10 3/19 3/21

Table 2. Delivery schedule for leafy greens in fall 1997

Commodity Amount (lbs.) Date planted Date harvested Date delivered

Turnip greens 1,385 9/1 9/21 9/24

Turnip greens 1,150 9/1 11/09 11/12

Turnip greens 1,945 9/1 11/14 11/17

Turnip greens 1,631 9/1 12/05 12/05

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Vending Experiences During the 1998/99School YearWith the learning experiences of the 1997/98school year behind it, the Cooperative went intothe 1998/99 school year with a positive attitude. Ithad an established market, good customer rela-tions, and the necessary equipment in place,allowing it to focus on the daily operations ofproduction, processing, and delivery.

Leafy greens sold to the schools (tables 5 and 6)show two important characteristics. First, deliver-ies were made at regular intervals, meeting theneeds of the customer’s cyclical menus andencouraging the regular incorporation of leafygreens into school lunches. The second importantaspect is the large amounts of greens delivered,which translated directly into increased revenuefor the Cooperative and its participants. The

Table 4. Delivery schedule for fruit over 1997/98 school year

Commodity Amount (flats) Date planted Date harvested Date delivered

Watermelon 100 (#) 6/1/97 9/27/97 9/29/97

Strawberries 50 10/1/97 4/12/98 4/13/98

Strawberries 64 10/1/97 4/26/98 4/27/98

Strawberries 15 10/1/97 5/3/98 5/4/98

Strawberries 50 10/1/97 5/3/98 5/4/98

smaller deliveries, intermingled with the regular,large deliveries in April and May 1999, representsales to an additional school district. The Coopera-tive also marketed fruit grown by individualparticipants to the local schools (table 7). Blackber-ries were used in pies and cobblers in the schoollunches. Muscadine grapes and strawberries wereserved as desserts and additions to the salad bar.

The impressive sales record of the 1998/99 schoolyear strengthened customer confidence. TheCooperative demonstrated its ability to deliverregular shipments and increase volume withoutsacrificing quality or service. The delivery recordalso inspired Cooperative participants as theygained increased profits. They are realizing thepotential of this marketing opportunity, increasingtheir income, and benefitting from their participa-tion in the Cooperative.

Table 5. Delivery schedule for leafy greens in fall 1998

Commodity Amount (lbs.) Date planted Date harvested Date delivered

Leafy greens 1,320 5/98 8/9 8/11

Leafy greens 1,320 5/98 9/14 9/15

Leafy greens 1,320 5/98 9/28 9/30

Leafy greens 1,320 5/98 10/5 10/6

Leafy greens 1,320 5/98 10/12 10/13

Leafy greens 1,320 5/98 10/25 10/26

Leafy greens 1,320 5/98 11/15 11/16

Leafy greens 1,320 5/98 12/14 12/15

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Table 6. Delivery schedule for leafy greens in spring 1999

Commodity Amount (lbs.) Date planted Date harvested Date delivered

Leafy greens 1,320 5/98 1/5 1/6

Leafy greens 1,320 10/98 1/27 1/29

Cole slaw 500 10/98 2/10 2/11

Leafy greens 1,320 10/98 2/4 2/2

Leafy greens 1,320 10/98 2/27 3/1

Leafy greens 1,320 10/98 3/8 3/10

Leafy greens 120 10/98 3/16 3/17

Leafy greens 1,041 10/98 4/7 4/8

Leafy greens 332 10/98 4/10 4/12

Leafy greens 1,320 10/98 4/13 4/15

Leafy greens 1,320 10/98 4/16 4/19

Leafy greens 314 10/98 4/16 4/20

Leafy greens 201 10/98 4/25 4/27

Leafy greens 201 10/98 4/30 5/3

Leafy greens 1,320 10/98 5/14 5/17

Leafy greens 201 10/98 5/11 5/12

Table 7. Delivery schedule for fruit over 1998/99 school year

Commodity Amount (lbs.) Date planted Date harvested Date delivered

Blackberries 700 Perennial 8/3/98 8/4/98

Muscadine grapes 1,300 Perennial 9/9/98 9/10/98

Muscadine grapes 1,300 Perennial 9/16/98 9/17/98

Muscadine grapes 1,300 Perennial 9/23/98 9/24/98

Strawberries 144 gal. 10/98 4/14/99 4/15/99

Strawberries 144 gal. 10/98 4/18/99 4/19/99

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Strawberry Trial—1998The Cooperative provided leafy greens to localschools throughout the school year and expandedits produce line with strawberries. Using blackplastic mulch and drip tape irrigation, an acre ofstrawberries was planted on land leased by theCooperative. Thirteen hundred pounds of straw-berries were harvested over a period of severalweeks in April and May. Three hundred poundswere sold to Gadsden, Leon, and Walton Countyschools. Participants used 1,000 pounds for theirown consumption because they were not ofsalable quality. The berries were overly ripe,which was perfect for immediate use, but theycould not be held for any length of time in theschools.

This trial was the first time many of the partici-pants had grown strawberries. The Cooperativelearned the importance of a sound irrigationschedule in producing a good crop of strawber-ries. Weeds presented a problem, which will beaddressed through aggressive weed controlmeasures focusing particularly on nut grass (aregional problem). The strawberry crop sufferedfrom cold damage in early March. The Coopera-tive was not prepared to deal with the suddenbelow-freezing temperatures, and, as a result,many blossoms and immature fruit were dam-aged. The Cooperative plans to install a basic frostprotection system, either crop cover or mistingirrigation. The management team is currentlyinvestigating the options, initial investment, andthe potential return on these two systems. Windalso caused damage and compounded the colddamage. To better protect the blossoms and fruit,the Cooperative will plant rye grass between therows of strawberries to act as a windbreak for nextseason’s crop.

Profits from the strawberry trial were minimal.The Cooperative sold its strawberries at a lowprice to be competitive with industry prices.These prices, however, were not enough to cover

expenditures, labor costs, and provide a reason-able profit. The profitability of the strawberry cropwas also hurt by the lack of salable product.

In the process, the Cooperative learned a greatdeal about berry production and handling. Thisknowledge will be used to make the Cooperativemore profitable by expanding its product line andproviding its customers with more purchaseoptions. This product diversification also willmake the Cooperative a more attractive vendor tomany school districts.

Cost EffectivenessThe Cooperative has entered a small, niche marketproviding agricultural products to local schools.At this time, there is little competition in thismarket. This is especially true with the fresh,washed, chopped, bagged, and delivered leafygreens.

The Cooperative decided upon a selling price thatwould be fair to its customers and, at the sametime, provide a reasonable profit. The manage-ment team considered the costs of production,postharvest handling, and delivery. An accurateestimate was made, and the management teamdecided on a reasonable profit level. The price thatthe Cooperative presented was acceptable to itscustomers.

The strawberry market is particularly competitivein Florida. Unlike the price setting possible withvalue-added, leafy greens, selling strawberries didnot allow the Cooperative to set its price. To becompetitive, the management team had to moni-tor the weekly and daily selling prices for straw-berries and set its prices accordingly. The Coop-erative did not make as much money on thestrawberry trial as many participants had hoped.They plan to grow strawberries again, but withincreased profitability. The management team hastaken the past year’s market prices and worked

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backward to determine areas of production andpostharvest handling that can be improved. Themanagement team is hopeful that these improve-ments will enable the Cooperative to providestrawberries at market prices and increase itsprofit margin.

Figure 8. Children and teachers enjoy a healthful lunch, which includes fresh, leafy greens from the Cooperative.

Student AcceptanceTaste, texture, and aroma are very importantwhen selling food. These qualities are especiallycritical when providing food to children. Foods donot improve in taste, texture, or aroma aftercanning, freezing, or processing. Fresh fruit and

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vegetables are at their peak quality and are themost appealing. The taste of fresh, leafy greensproduced by the Cooperative was well receivedby the children of Gadsden County School Dis-trict. In fact, the children preferred the fresh, leafygreens to their processed alternatives. The straw-berries provided by the Cooperative passed thetaste test with flying colors, as evidenced by thechildren’s enthusiastic patronage of the salad barand the popularity of the strawberry desserts.

According to J’Amy Petersen, food service direc-tor of the Gadsden County School District, in-creases in student participation in the SchoolLunch Program have been attributed to the high-quality, fresh fruit and vegetables. Faculty, staff,and school district maintenance personnel havealso increased their use of the school cafeteriaduring this time.

Administrative AcceptanceThe Gadsden County School District Food Serviceis the main customer for the Cooperative. Thereare approximately 8,700 students throughout 15schools in the county. Gadsden County serves anaverage of 6,700 lunches and 3,500 breakfastsdaily. In addition to the School Lunch and Break-fast Programs, Gadsden County participates in theChild and Adult Care Feeding Program and theAfter-School Snack Program. During the summer,the school food service provides meals for several4-H and Bible school camps.

The Gadsden County School District Food Serviceconsiders itself a “learning laboratory,” interestedin testing new varieties and items that will pro-vide children additional food choices. Schoolmeals must meet established Federal nutritionalrequirements, but the specific foods and how theyare prepared are up to the local food service. Theproduce sold by the Cooperative has been impor-tant in guiding the school feeding program to-ward promoting better eating habits among

children in accordance with USDA Dietary Guide-lines for Americans.

A big factor in the administrative acceptance ofthe Cooperative’s products by the GadsdenCounty schools is the enthusiastic reaction fromchildren to the fresh fruits and vegetables.

The economic benefit of buying produce from theCooperative also affects administrative acceptanceof the Cooperative. The Cooperative provided theGadsden County schools an opportunity topurchase high-quality, fresh produce items at alower cost than that charged by larger producevendors. This competitive edge for local smallfarmers was realized even before participation inDOD’s DVD program. The DVD program’spurchase of fresh produce for schools makes thebusiness arrangement even more attractive. Theopportunity to buy fresh, healthful fruit andvegetables locally was a real benefit, both to theGadsden County School District Food Service andthe Cooperative.

Administrative acceptance of the Cooperative wasalso influenced by the good working relationshipdeveloped with food service directors and manag-ers. Many of the Cooperative’s attributes andbusiness practices, including professionalism,courtesy, purpose, seriousness, accountability, andcommitment, contributed substantially to theadministrative acceptance.

DeliveriesThe Cooperative takes responsibility for thetransportation and delivery of the fresh, leafygreens to the schools in Gadsden County andother school districts. Some school district foodservices have preparation kitchens at each school.Other school districts prepare meals at one ormore central kitchens and then distribute the foodto the individual schools. From a logistics stand-point, delivering produce to central kitchens is

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much easier. Because the Cooperative has adopteda “How can we help you?” attitude toward meet-ing its customers’ needs, it delivers product toschools as part of its overall service to food servicedirectors.

Reliable transportation was needed for the Coop-erative to start and stay in business. They investedin a used, single-axle, refrigerated trailer that canhold over 2,000 pounds of leafy greens. A Coop-erative participant drives his own truck, pullingthe trailer, for deliveries.

Gadsden County encompasses 518 square miles,and deliveries to every school in the countyrequire substantial effort. Over time, regulardeliveries have resulted in good business andinterpersonal relationships between the Coopera-tive and the school cafeteria managers. Table 8(appendix 4) shows a typical delivery schedule forGadsden County. The Cooperative makes everyeffort to deliver early in the morning for theconvenience of cafeteria managers and workers.

Receiving payment for the Cooperative’s productsinvolves working closely with food service per-sonnel and DOD. A three-copy invoice register isused to record the type, amount, and price of theproducts delivered to each school. DOD uses theElectronic Invoicing System (ELVIS) for paymentto the Cooperative. The ELVIS form contains thesame information as the register. The ELVIS formand a copy of the signed register are sent to DODin Jacksonville to be processed and then sent on toColumbus, OH, for payment. The process usuallytakes 30-60 days. The Cooperative adheres to astrict financial plan to ensure an adequate cashflow between pickup, delivery, and payment.

A typical delivery begins with the participantentering the school kitchen and meeting thecafeteria manager. The participant is dressed in ashirt that has the “New North Florida Coopera-

tive” printed over one pocket and the name of theperson over the other. The leafy greens arebrought in and stacked neatly in cold storage. TheCooperative demonstrates courtesy, providesconvenience, and protects the high quality of itsproducts by taking this extra step. The cafeteriamanager then signs the invoice and keeps onereceipt for the school district payment procedure.The Cooperative keeps one copy for its records.The importance of interpersonal relationshipsbetween the Cooperative management and thecafeteria managers and the opportunity for feed-back as deliveries are made cannot be overempha-sized. The Cooperative gets immediate reaction toits produce as deliveries are made and is able toplan accordingly.

The People of the New North FloridaCooperativeThis pilot project deals with many aspects ofagriculture and marketing, including develop-ment of a cooperative, helping small farmers,dealing with value-added products, offeringtechnical assistance, providing benefits to minor-ity farmers, promoting interagency cooperation,and market development. Each of these vitalaspects of the pilot project was integral to thesuccess of the New North Florida Cooperative,but underlying these elements are the smallfarmers who make up the Cooperative. They arenow able to improve their quality of life andcreate opportunities for a better future. Theyreceive a fair price for their produce, sell largerquantities than before, and have their producemarketed by a reputable cooperative. Thesebenefits allow the farmers to concentrate on whatthey do best, growing crops. It enables them tosave time and earn money.

There are currently 13 farmer members from thelocal farming community with varying back-grounds and experiences in the Cooperative.

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Figure 9. Spencer Lewis and his family are participants in the Cooperative.

Spencer Lewis operates a 30-acre farm in JeffersonCounty with his wife and young son. Lewis, whofarms full time, says, “Working together with theCooperative has allowed me to reduce my acre-age. I grow 54 rows of leafy greens on 1 acre, andmake more money using less land.”

Willie Morgan operates a 30-acre farm in GadsdenCounty. He is also employed off the farm with theprison system.

Richard Conrad and his wife Myra own a farm ofapproximately 20 acres in Malone, FL, and farm 2acres of fruit and vegetables. Mr. Conrad worksoff the farm at the local paper mill, and Mrs.Conrad is a part-time beautician.

Martha Hasty, along with her husband Wally,farms 10 acres in Jackson County. She is alsoemployed off the farm with the U.S. Postal Ser-vice.

Danny Sylvester is a Jackson County businessowner and farms at the Cooperative’s central site.

Minnie Hall is a retired public service worker whofarms and assists in value-added processes at theCooperative’s central site.

Elease Varner is a retired school teacher whofarms part time and assists in the value-addedprocesses at the Cooperative’s central site.

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Portia Holmes is a nurse part time. She farms parttime and participates in the value-added pro-cesses at the Cooperative’s central site.

Jimmy Williams and his wife Patricia are smallbusiness owners and operators. They farm at theCooperative’s central site.

Rev. Walter Franklin, a Jackson County minister,farms on the Cooperative central site.

Shepherd Myrick works off farm for the StateDepartment of Forestry in Jackson County. Hefarms on the Cooperative central site.

Jay Hall and his wife Dawana farm on the Coop-erative central site. He is in the military, while sheprovides legal counsel to the Cooperative.

The Cooperative has enabled them to combinetheir energies and limited resources to seizevaluable business opportunities. This experiencehas improved their individual farming operationsand their potential for economic gain.

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Abernathy, Donna F., May/June 1998. A LegacyLives On-Cooperative Approach Helps Black GrowersSucceed. Rural Cooperatives Magazine, RuralBusiness-Cooperative Service, USDA.

American School Food Service Association, No-vember 1998. School Foodservice & Nutrition: Town& Country Challenges.

Bureau of the Census, Census of Agriculture, 1992.Geographic Area Series, Florida State and CountyData. U.S. Department of Commerce.

Duyff, Roberta Larson, 1996. The American DieteticAssociation’s Complete Food & Nutrition Guide. TheAmerican Dietetic Association.

Empowerment Zones/Enterprise CommunitiesHomepage, http://www.ezec.gov

Food and Nutrition Service, Child NutritionPrograms, http://www.usda.gov/fcs/nsclp.htm

Hardenburg, Robert E., Alley E. Watada, Chien YiWang. The Commercial Storage of Fruits, Vegetables,and Florist and Nursery Stocks. USDA, AgriculturalResearch Service. Agricultural Handbook Number66.

Lewis, Edger L, 1994. Opportunities for VegetableProcessing Cooperatives in the South and Southeast.Agricultural Cooperative Service, USDA, ACSResearch Report 122.

Logan, Michelle, 1996. The Packer: 1996 ProduceAvailability and Merchandising Guide. Vance Pub-lishing Corporation, Lincolnshire, IL.

Namken, Jerry C., E. Eldon Eversull, David S.Chesnick, 1995. Value-Added Contributions byAgricultural Cooperatives. Rural Business andCooperative Development Service, USDA, RBCDSResearch Report 135.

References

National Commission on Small Farms, 1998. ATime to Act A Report of the USDA National Commis-sion on Small Farms. USDA.

Newton, Catherine L., 1931 Vitamin Content ofTurnip Greens, Collards, Cantaloupes, and Peaches.Georgia Experiment Station, Georgia State Collegeof Agriculture.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: The American System ofBusiness. Cooperative Information Report 45,Section 1.

Rural Business-Cooperative Service, 1994.Understanding Cooperatives: Cooperative BusinessPrinciples. Cooperative Information Report 45,Section 2.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: The Structure of Cooperatives.Cooperative Information Report 45, Section 3.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: Who Runs the CooperativeBusiness? Members. Cooperative InformationReport 45, Section 4.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: Who Runs the CooperativeBusiness? Board of Directors. Cooperative Informa-tion Report 45, Section 5.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: Who Runs the CooperativeBusiness? General Manager and Employees. Coopera-tive Information Report 45, Section 6.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Financing Cooperatives.Cooperative Information Report 45, Section 7.

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Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Income Tax Treatment ofCooperatives. Cooperative Information Report 45,Section 8.

Rural Business-Cooperative Service, 1994. Under-standing Cooperatives: Legal Foundations of a Coop-erative. Cooperative Information Report 45, Sec-tion 9.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Strategic Planning. Coopera-tive Information Report 45, Section 10.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Cooperative Business Manage-ment Functions. Cooperative Information Report45, Section 11.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Base Capital Financing ofCooperatives. Cooperative Information Report 45,Section 12.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: Farmer Cooperative Statistics.Cooperative Information Report 45, Section 13.

Rural Business-Cooperative Service, 1995. Under-standing Cooperatives: How to Start a Cooperative.Cooperative Information Report 45, Section 14.

Trupo, Paul, Charles Coale, C. Gene Haugh, DixieReaves, George Norton, 1998. Southwest VirginiaShipping-Point Market Project Phase 2. College ofAgricultural and Life Sciences, Virginia Polytech-nic Institute and State University.

United Fresh Fruit and Vegetable Association,1980. Leafy Greens, A Nutritional Treasure. UnitedFresh Fruit and Vegetable Association, Alexandria,VA.

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Appendixes

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Appendix 1 Gadsden County School Food Service Menus

Breakfast Monday, Oct. 26, 1998

Apple JuiceFrench Toast with SyrupHam PattieChoice of milk

Tuesday, Oct. 27, 1998

Fruit JuiceChicken BiscuitChoice of Milk

Wednesday, Oct. 28, 1998

1/2 BananaAssorted CerealsGraham CrackersChoice of Milk

Thursday, Oct. 29, 1998

School’s Choice

Friday, Oct. 30, 1998

Happy Halloween!Orange JuicePancake with SyrupSausage PattieChoice of Milk

Lunch

Fish Fillet on Bun with Tartar SauceMacaroni CheeseGreen PeasHush PuppiesOrange SlicesChoice of Milk

SpaghettiTossed Salad with DressingHot Garlic BreadPeach or Pear SlicesCookie or BarChoice of Milk

Sliced Turkey with GravySteamed RiceSeasoned GreensHot CornbreadFrozen Fruit Juice BarChoice of Milk

ChiliCinnamon Bun with RaisinsCarrot and Celery StocksMixed Fruit CupChoice of Milk

Chicken Filet on Bun with CondimentsLettuce and TomatoFrench FriesHalloween Cake and 3 oz. Ice Cream CupChoice of Milk

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Appendix 2Department of Defense Order for Supplies or Services Form

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Appendix 3April Lunch Menu for Jackson County School District

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Appendix 4

Table 8. Delivery schedule for Gadsden County Schools on March 10, 1999

School Cafeteria Delivery time Amount of Number ofmanager (A.M.) leafy greens students served

(lbs.)

Havana H.S. Alonza McBride 6:15 72 382

Havana M.S. Bettye Brown 6:30 72 400

Havana E.S. Shirley Candate 6:45 132 900

St. John E.S. Mary Vickers 7:45 72 400

Shanks H.S. Geraldine Jackson 8:00 100 1,100

George W. Lillian Green 8:30 150 850Monroe E.S.

Carter Doreen Rittman 8:45 none this time, 850Parramore M.S. but usually 90

Stewart St. E.S. Paula Milton 9:00 140 800

Greensboro Emily Mahaffey 9:30 250H. & M.S.

Greensboro E.S. Loretha Rittman 9:45 90 550

Gretna E.S. Mitchell Williams 10:00 60 430

Chattahoochee E.S. Catherine Roberts 10:30 114 500

Chattahoochee Regina Butler 10:45 60 150