Conceptually, there are three dimensions to the engagement and entrepreneurial outreach portion of the Farm Income Enhancement Program. The Program almost always involves assisting individuals or groups with the development of a new business or expanding an existing business.
The three dimensions of the engagement portion and entrepreneurial outreach are
- Supply chain appropriate for a new product or innovation
- Governance structure alternatives for new firms or for group entrepreneurial efforts
- Alternatives for financing the start-up business.
The entrepreneurial outreach assistance always is done in the context of a supply chain consisting of a network of various firms at different levels within the supply chain. The supply chain includes vendors of raw materials, manufacturing facilities that transform the commodity or product and add economic value to it, and distribution or wholesaling and retailing firms that facilitate making the product available to customers. Managing supply chains can result in performance improvements within the chain and result in greater efficiencies as well as improve the likelihood of success for a new venture.
The governance structure alternatives involve the legal and economic considerations for the choice among various alternatives. Among others, such alternatives include sole proprietorship, partnership, LLC, C corporation, S corporation, or cooperative. The choice among these alternatives often can influence the long-term success of a start-up business.
The third dimension involves the alternatives for financing a start-up business. These alternatives include seed capital, organizations that may subsidize certain aspects of the new business and the more normal sources of equity and debt capital such as venture capital, angel investors, and loans from numerous sources.
Since its inception the Farm Income Enhancement Programs has developed novel and effective pathways based on this conceptual foundation. The objective is to provide research-based assistance and expertise for farmers and entrepreneurs interested in value added business. The novel pathways developed as part of the Farm Income Enhancement Program include, but are not limited to the following: 1) The Agripreneur virtual newsletter, 2) the Agriculture Innovation Counselor Program, 3) and Heartland Agdeavor Association.
Outreach Pathways of the Farm Income Enhancement Program
Content of the newsletter, The Agripreneur: Creating Wealth through Food and Agricultural Entrepreneurship, focuses on entrepreneurship and SMEs (small- to medium-sized businesses). This virtual newsletter specifically focuses on entrepreneurship education in food and agriculture and thus occupies a unique niche. Topics include small business management and policies affecting small business. The Farm Income Enhancement Program engages in active dialogue with farmers and other small business owners from throughout the Eastern Corn Belt region regarding the topics and issues they would like to see discussed in future publications of The Agripreneur. The Agripreneur is available free of charge at http://agripreneur.osu.edu. This Web site began operation May 10, 2005. The Agripreneur site, from its inception averages about 2,300 hits per week. This is one gauge of the impact of the Farm Income Enhancement Program activities.
Support for this activity is provided by the Farm Income Enhancement (FIE) Program of The Ohio State University’s College of Food, Agricultural, and Environmental Sciences. Initially, in-kind support was also received from OSU’s Data Center and the Michigan State University’s Product Center of Agriculture and Natural Resources (website at www.aec.msu.edu/product/index.htm).
Agriculture Innovation Counselor
Another major recent accomplishment involves initiating Agriculture Innovation Counselor Certification on a multi-state basis. The Agriculture Innovation Counselor (AIC) Certification Program was created, initially in 2004, to train and certify individuals specializing in assistance to agriculture and small business entrepreneurs. The mission of AIC simply is to encourage and strengthen value added agriculture through assisting small business entrepreneurship in rural areas by creating and maintaining a cadre of trained professional counselors. The counselors recognize the importance of understanding agricultural and food markets and work with and for their communities to be agents for positive change. The certification program is a joint project between The Ohio State University, the Wisconsin State Department of Agriculture, and Michigan State University. During 2004 and 2005 a total of 36 AIC professionals were certified in the tri-state area.
Heartland Agdeavor Association
A major accomplishment of the Farm Income Enhancement Program involves being a founder of a business to promote value added activities among producers. Heartland Agdeavor Association, a non-profit corporation incorporated in Ohio, provides 1) investment opportunities to its members and 2) clearinghouse and technical assistance functions to member entrepreneurs with ideas on commodity-based value added businesses. Heartland operates primarily in a seven state area including Western New York, Pennsylvania, Ohio, Kentucky, West Virginia, Indiana, and Michigan. Heartland Agdeavor Association began operation in 2001. HAA currently has over 150 dues paying members in this seven state area including members as far away as Iowa.
The mission of HAA is to increase farm income through the development of value-added businesses that utilize farm commodities. The spillover is to create jobs in rural areas and promote the general economic development of rural Ohio and the Eastern Corn Belt.
Major investment opportunities put before HAA members include:
- Golden Oval Egg (liquid eggs)
- KAAPA Ethanol
- Big River Resources Cooperative (ethanol)
- Soylink (soy powder production, offered twice, at different times, for different expansion phases)
- Heartland Fields (soyfoods)
- Agdeavor Renewable Energy (ethanol)
- Bavoy (soybread)
- Goodview LLC (Brazilian land)
Golden Oval Egg (GOE)was the first off-farm value added investment opportunity offered to Ohio Farmers through Heartland Agdeavor Association. GOE turns corn into liquid eggs.
The aggregate impact of HAA is substantial. To date Heartland has ‘screened’ about 100 value added projects and has seriously worked with about 35 to 40 of them. These projects have resulted in excess of $5 million in farmer equity being invested in value added agriculture. The performance on one project resulted in a ROE of 104% in 24 months. More information about the Heartland Agdeavor Association can be found at http://www.heartlandagdeavor.com. Information regarding the financial performance of all HAA investment opportunities is available from their website.
Separate from Heartland, another aspect of the engagement activity of the Farm Income Enhancement Program has been to actively promote and work with agricultural cooperatives as an alternative to enhance farmer income through joint marketing. Research indicated that a major concern of agricultural cooperatives in Ohio is training for newly-elected Directors. As a follow-up to this research, Tom Sporleder became the Principal Investigator in an applied research and outreach project on Board of Director Training for small- to medium-sized agricultural cooperatives during the 1998-2002 period. The project was jointly funded by a competitive grant from the Gladys and George Dunlap Cooperative Leadership Fund of Nationwide Insurance and the Farm Income Enhancement Program. This project created a method for customizing director development programs for farmer directors of agricultural cooperatives. Results focused on assessing skills needed by directors and creating a CD-ROM and Internet-based subject matter training modules based around these required skills. The project resulted in six modules distributed on CD-ROM nationwide.
Related to the Director Development project, a separate but simultaneous effort was launched to create a multi-state council for agricultural cooperatives in the Ohio Valley region including Michigan, Indiana, Ohio, West Virginia, and Kentucky. The driver behind the proposal was that agricultural cooperatives were experiencing rapid consolidation into larger operating units covering multi-state areas. A multi-state council then could better serve the needs of cooperatives than individual state councils. This resulted in the creation of the Mid America Cooperative Council which operates as a “state” council in the multi-state region of Ohio, Michigan, Indiana, and Illinois.
Ohio Center for Cooperative Development
Funds from the AEDE Cooperative Endowment were used to leverage USDA financial support for creation and development of the Ohio Center for Cooperative Development. During this reporting period Anne Groves developed the website and a structure for electronic communications within the Center. Tom Sporleder along with the Farm Income Enhancement Program work with the Center Coordinator, on the selected projects of the Center. In summary, Center activities are aimed at improving the economic well-being of Ohio’s rural areas by promoting the development of new cooperatives and the improvement of existing ones. The Farm Income Enhancement Program actively supports this mission and provides research and outreach activities harmonized with this program.
Agricultural Business Enhancement Center
The Agricultural Business Enhancement Center (ABE Center), located in Bowling Green, Ohio, was a major avenue for leveraging Farm Income Enhancement resources into a larger and more significant cooperative education and outreach program than otherwise would be possible. Unfortunately, the program was supported through federal funding that ceased in 2004. The ABE Center initiatives over the years included numerous educational programs. Some specifics highlights were:
Value-Added Agricultural Business Development Initiatives
- Agri-Fiber Millworks, LLC Initiative - Market furniture parts for the ready-to-assemble furniture industry using agricultural by-products. Working on identifying specific products for customers.
- Farmers Markets - Assisting growers in exploring the opportunity for farmers’ markets at some of the Ohio Turnpike travel centers.
- Internet Hay Exchange - Helping hay and straw buyers and sellers utilize an electronic Internet Hay Exchange.
- Alternative Crops - Assisting the fruit and vegetable industry in evaluating alternative crops for production and processing.
Ohio Ethanol LLC Initiative
This effort was toward developing an ethanol industry in Ohio with the Ohio Corn Growers Association.
Ohio Beef Initiative
Presentations outlining the Ohio Family Farm Beef Industry Network (OFFBIN) were conducted throughout Ohio. Over 250 beef producers and affiliated industry personnel were informed about the vertically integrated marketing and branding program that developed for Ohio producers. Ten beef producers were able to achieve additional premiums for their beef. Cattle were evaluated using measuring and ultrasound techniques. Cattle were tagged based on growth rate and fat deposition. Beef producers were then able to market their cattle for a quality premium of $25 per head and avoid market place discounts.
Ohio Hydroponic Produce Promotion
A $67,300 Promotion and Marketing of Ohio Hydroponic Produce Grant was awarded to the Toledo Area Flower and Vegetable Growers Association. An Ohio hydroponic/Ohio PROUD brand, point of sale materials and grocery store displays were developed. The initiative was administered through the ABE Center Hydroponic Greenhouse program. This initiative has been financed in part or totally through a grant from the Ohio Department of Agriculture, the State of Ohio and the United States Department of Agriculture under the provisions of the Specialty Crop Grant.
Primary FIE Networking
- MSU Agricultural Products Center
- OSU Food Industries Center
- Purdue Agricultural Innovation and Commercialization Center
- Mid America Cooperative Council
- Heartland Agdeavor Association
- Ohio BioProducts Innovation Center
- Ohio Cooperative Development Center at OSU Piketon
The outreach activities for the Cooperative Rural Development Center are aimed at improving the economic well-being of Ohio’s rural areas by promoting the development of new cooperatives and improving existing ones.