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ON FARM FOOD PROCESSING AND DIRECT SELLING

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Agricultural Youngsters Oriented Ultimate Training Handbook (AGRI-YOUTH)
Leonardo da Vinci - 2013-1-TR1-LEO05-47516

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ON FARM FOOD PROCESSING AND DIRECT SELLING

  1. 1. MODULE 1 ON FARM FOOD PROCESSING AND DIRECT SELLING
  2. 2. MODULE 1 REMARK This module consists of two parts: •The first part, including 20 slides, covers general themes related to on farm food processing and direct selling. •At the end of the first part it will be a set of ten questions. For each question there are three answers, just one of them correct. If all your answers are right you pass the test, otherwise you will repeat the sequence till the test is completed without mistakes. •The second part, including 30 slides, contains details on farm food processing and direct selling. •As for the first part, at its end there will be ten multiple choice questions. If all your answers will be correct, the system will allow to print a Certificate corresponding to the 3rd Level.
  3. 3. MODULE 1 INTRODUCTION On farm food processing It has long been recognised that one approach to the problem of declining farm household incomes has been diversification of activities on farm, or a re-deployment of farm household labour into off-farm activities. Such diversification has taken a myriad of forms from novel enterprises, agricultural contracting services, to leisure related activities such as farm-tourism/accommodation, golf courses and shooting ranges, direct marketing of products to retailers or consumers and further processing of farm produced raw materials. Processing of certain products on farm has been a traditional activity of farmers in almost all countries. The making of jam, butter and cheese, for example, and selling directly to neighbours or in the village has been a small scale complementary activity to farming and income supplement where production has been surplus to domestic needs. The central idea of on-farm food processing systems is a commitment to social co-operation, local economic development, and close geographical and social relations between producers and consumers. The nature and definition of on-farm processing is complex. It was recognised that the farmer would control the management of the processing and marketing activities, even if he had employees to conduct them on his behalf, and he must utilise his own raw materials, although not exclusively. Thus the concept of a farm- processed food would exclude simple washing, packing and selling. However, pasteurising and bottling milk was considered a simple processing operation. Clearly culturing of milk products is a more advanced process. The fundamental purpose of food processing has always been to make nutritious food available when and where it is needed. Protect product safety and sustainable environment farmers produce on-farm processed foods must apply HACCP and follow the legislations adopted for on-farm processing and general food processing.
  4. 4. MODULE 1 INTRODUCTION Direct selling Many producers had highlighted the difficulties of locating markets for their produce at the outset of their processing enterprise. The difficulties of developing a market when there are initially limited volumes of produce to sell, will frequently restrict selling activity to within the locality of the farm. Direct farm marketing is a growing segment of Europe’s food system. Direct selling and farm marketing is defined as selling food and farm products directly to consumers without using an intermediary. In summary, direct sales is a distribution or commercial activity undertaken by local farmers who utilise communication skills that make the purchasing experience of the consumers enjoyable and memorable. In performing direct sales, it is very important to abide by the set rules and regulations, to produce products of superior quality, and to awake consumers buying behaviour by introducing the products. Today, most food moves from the farm gate to the consumer through a highly efficient system that takes advantage of economies of scale and specialization to keep processing and distribution costs low. Most producers devote their time to what they know best, planting, growing and harvesting food, leaving the processing and marketing to agri-business. However, selling directly to consumers is growing in popularity with some producers. There are many direct marketing opportunities available to farmers, including roadside markets and farmstands, farmer’s markets and public markets, pick-your-own, cooperatives, community supported agriculture, direct sales to restaurants and stores, and agricultural tourism and on-farm recreation, gift baskets and mail order, and e-marketing. Food regulations such as inspection, grading and labelling, business licenses and permits, environmental requirements and labour requirements on on farm processing and direct marketing have to be applied for this sector in Europe.
  5. 5. MODULE 1 PART I – LEVEL 2 ON-FARM FOOD PROCESSING Why we process foods? Farmers can directly sell without processing some of farm products such as fruits and vegetables. They can also process them on farm and produce jams, naturally dried fruits and vegetables, and dairy and meat products. The food processing industry strives to meet consumer expectations for food that is safe, unspoiled, nutritious, convenient, enjoyable, available in a wide variety and affordable. Today, the food industry in Europe is totally different: three per cent of the population produces three-quarters of the region's food. The rest is imported from all over the world. Demographic changes have also triggered an increasing demand for convenient foods and variety as well as nutritional quality and affordability. However, demans of European people for on- farm processed foods are getting increasin because these foods considered more natural and organic. There exist farm holdings which have separate and professional processing enterprises with specific processing investment, and which contribute a substantial proportion of farm-household and business income. Such activities have allowed the farmer to come closer to his market-place and generate added value to products the raw material prices for many of which have been under pressure through excess EU production. The questions thus posed at the outset of the research were "what were the establishments having a professional vision of processing on farm and if it was sustainable in the longer term. In this respect, it was important to understand how and where such products were positioned in the market.
  6. 6. MODULE 1 PART I – LEVEL 2 What is food processing and on-farm processing? “Food processing” is the treatment of a food substance to change its properties with the intention of preserving it, improving its quality, or making it functionally more useful. For example, cheese, ice cream, hamburger, spaghetti sauce, chicken wings, bread, pie, maple syrup, and jam are all processed foods. Food processing represents a business opportunity for farmers and entrepreneurs as it builds the farm’s economy, creates jobs, and gives consumers access to healthy foods. European and countries’ food safety regulations require all food processing operations and their products to meet specific standards. Food safety standards are the basis for licensing a food business. To get a license the applicant must show they meet the standards established in food safety regulations. Governmental and local food safety inspectors interpret and enforce the regulations as they apply to actual circumstances. Therefore farmers who precess their foods on farm and other food processors must know the standards they must meet to maintain a license, and the government agencies that have jurisdiction over their license, product, and processing operations. Basic characteristics of farm food processing:  Products processed are mainly produced on a farm which process them  Products mainly processed according to traditional methods  Mainly farm family labour  Mainly direct sale  Side products mainly recycled on a farm
  7. 7. MODULE 1 PART I – LEVEL 2 Local food systems are a main basis for food re-localisation: ‘Localizing food seems to manifest both oppositional and alternative desires, providing an opportunity for directly personal relationships between producers and consumers and allowing people to express their sense of responsibility to the natural world and themselves within it. Since many perishable foods can’t be stored fresh for long periods, processed foods are an important part of a sustainable local food supply. Luckily for the consumer, but unfortunately for small farmers, food processing is highly regulated due to increasing concerns about food safety. Food safety and processing regulations are complex, with EU, government, and local jurisdictions having varying levels of oversight depending on types of processing (i.e.drying, canning, freezing, etc.), foods being processed (i.e. meat, vegetable/fruit, low-acid, etc.) and sales/distribution. While opportunities for local food processing may be limited due to costs and economies of scale, in some cases farm products can be processed on-site on a small scale.
  8. 8. MODULE 1 PART I – LEVEL 2 Changing the rules in on-farm processing and green demands  No use of dangerous pesticides in plant production, no use of antibiotics or growth promoters in animal husbandry, compliance with standards for environment and animal welfare  Phasing out subsidies for agro-industrial development-public support for farmers must be linked to strict respect of environmental and food safety laws  Specific support for organic and extensive farming, including the infrastructure for local processing (small slaughter and processing facilities)  Support for those fishing methods that cause the least environmental destruction, and use of the precautionary approach to prevent over-exploitation  Taxation policies supporting the use of healthy foods (e.g. fruits and vegetables)  Decreasing the use of unhealthy foods (e.g. those with high amounts of sugar, refined cereals or saturated fats)  Discourage intensive and factory farming, including fish farming through strict enforcement of environmental, animal welfare and food safety legislation ( the eco-conditional or cross compliance principle)  Specific support for non-market functions of agricultural practices like green and blue service  All farm-processors felt that the primary factors motivating consumers to buy their products were: - Taste - Confidence in the producer - Traditional and artisanal quality - Healthiness and safety of the products.
  9. 9. MODULE 1 PART I – LEVEL 2 Contribution of on-farm food processing to sustainability- environmental  Less use of energy - less transport, - less refrigeration due to immediate processing, - less packaging material  Less polution - more responible production of products to be processed - less pesticides, - less medicine and veterinary drugs/additives - side products mainly recycled on the farm - for fodder - for compost Contribution of on-farm food processing to sustainability-tradition and health  Use of raw milk - farm specific taste, - higher biological value of products  Little or no use ofchemical additives
  10. 10. MODULE 1 PART I – LEVEL 2 Contribution of on-farm food processing to sustainability- social and demografic  More employment in rural areas  Better inocome (better chance for small farms to resist)  Direct contact - producer - consumer  Influence on tourism development Main problems and obstacles in on-farm food processing  Marketing strategies and lititation on direct farm selling  Monitoring  Legislations and changing legislation  Conditions not adapted to small units  Insufficient knowledge on safe processing of animal products  Bad image of raw animal products and farm products in general  No clear definition of farm products  Big investments  All day work  Low prices of products in relation to labour input and investment
  11. 11. MODULE 1 PART I – LEVEL 2 What should be done to keep or even increase farm food processing?  Keep the food safety standards using traditional methods of food processing  Produce without chemical additives, pesticides and without environmentally harmful detergents  Keep traditional taste of food within the new super hygine concept of food safety  Understand the relation between benefits and potential dangers of consumption of food prepared by traditional processing methods Clearly define the traditional methods within the legislation, which aim to protect and distinguish farm processed products from the other modes of processing  Define the differences between farm processed products and industrial one by scientifically to reach fair prices. Define the biological value of farm processed products relation to industrial one (raw milk versus pasteurised, natural conservation methods versus chemical additives). Perform research on adaptation of facilities and technology to decrease the workload.  Better transfer of research results into practice for on-farm food processing
  12. 12. MODULE 1 PART I – LEVEL 2 Quality and safety aspects of on-farm processing and organic/low- input food processing ‘Quality low input food’ (QLIF) is a project coordinated by EU. It is a new new concept in on-farm food processing and organic and low-input food processing. On farm food processing and organic food-processing standards generally prohibit the use of synthetic chemicals, many preservatives and other food additives that are widely used in the processing of conventional foods. However, there are frequent discussions about the underlying rationales, principles and criteria used to allow some processing methods and additives but other ones not. Consumers of low-input and organic food have specific expectations regarding quality characteristics of processed food. Organic processed products should therefore be sustainable and fulfil consumers’ expectations as much as possible. The expanding market for these type of organic food, as defined in EU Regulation (EEC) 2092/91 (since 2009 replaced by EC Regulation 834/2007 and the implementation rules EC Regulation 889/2008), is characterized by an increasing demand for processed foods, including ready to eat food, possibly also with a longer shelf life. Compared with the conventional food sector, processors of organic food can only use a small number of additives and processing aids that are allowed by EU Regulation 2092/91 (since 2009 listed in EC Regulation 889/2008). This is mainly due to the fact that many consumers expect that organic food is ‘minimally processed’ and only uses very little additives, visible by their E-numbers.
  13. 13. MODULE 1 PART I – LEVEL 2 However, when looking at organic food processing standards, there is also a large diversity in underlying principles and rationales. As a result these standards may differ significantly between sector bodies, European countries and potential export markets overseas. In the overall development of standards and EU Regulation 2092/91, food processors were not involved to a great extent, although they are facing considerable challenges with all those restrictions. When reflecting upon the further development of standards for processed organic food, it is important that many of the key processors are involved and can express their opinion in the way processing issues should be considered in the future and at which regulatory level. Direct marketing and value-added processing of the raw farm products are two of the best management strategies for farmers to employ to improve their net profitability. Value-added products can open new markets, enhance the public’s appreciation for locally produced food and farms, and extend the marketing. Expanded permitted secondary uses in many counties and new, more defined on-farm processing regulations enacted by EU, have expanded producer’s options for on-farm processing to include meats, poultry, jams and jellies, baked goods, dairy products, beverages, dried products, sauces, seasonings, and other specialty food products.
  14. 14. MODULE 1 PART I – LEVEL 2 DIRECT SELLING Direct selling and farm marketing Direct marketing implies marketing strategies in which the farmer or producer sell their products directly to the consumer. No matter what form direct marketing activity takes, it is an effort to establish personal contact between the people who raise the food and the people who eat it and the ultimate result is a shortening of the chain that brings food to the marketplace. Consumer demand for fresh, local food products along with the potential for increased farm income have led to a dramatic increase in direct marketing of farm products. Direct marketing has become a highly effective way for small-to-medium sized farms to achieve economic sustainability. Direct sales are a marketing strategy that may allow farmers to contrast the adverse effects of productivism and the imbalance of power in the international agro-industrial food supply chain. The changes occurring in civil society, specifically with consumers, with greater awareness of nutrition and attention to health risks from food, are all elements that increase demand for products guaranteed for freshness, safety and limited processing. Direct contact between producers and consumers presents an instrument to gain information about the products origin and characteristics and control their quality and freshness.
  15. 15. MODULE 1 PART I – LEVEL 2 One is dissatisfaction with farm commodity prices. The farm price is often only a fraction of the retail food price. Prices for produce sold directly to consumers can be substantially higher than typical wholesale prices. Another reason is that producers value the relationships they form with the consumers, as well as the opportunity to receive immediate feedback on their products. Consumers value the fresh, quality products along with the opportunity to support local producers. As for farmers, direct selling can be interpreted as a diversification strategy that can lead to higher profits and better farm household incomes. There are essential pieces of information that all farm direct marketers should develop and use to help promote their businesses. They are:  business cards,  price lists,  product information sheets that list the varieties grown and provide some basic information about how the products are grown,  quantities and quality,  preparation tips and/or recipes,  website
  16. 16. MODULE 1 PART I – LEVEL 2 Any written information given to customers should also contain your business name, contact information and logo. This keeps your business identity foremost in the consumers’ minds. Selling direct to consumers is an opportunity perfect for small producers. It allows you to eliminate the ‘middle man’ and sell direct to customers, increasing the possibility of receiving a higher return. Direct selling is also a great way to sell specialised products or products with volumes too low to sell through conventional channels. It also provides an opportunity to obtain customer feedback or experiment with alternative products. Their most important common feature is that they shorten the distance and favour a face to face relationship between producers and consumers. In this respect they are a structure alternative to globalized supply chains distributing industrialized and undifferentiated products . You need to understand requirements if you plan to sell any of the following commodities direct to the consumer:  poultry - chicken or turkey,  eggs,  dairy products,  potatoes,  meats,  processed meats,  processed foods,  fish,  vegetables for processing,  honey,  non-regulated food products,  e.g. bakery products,  organic products.
  17. 17. MODULE 1 PART I – LEVEL 2 Advantages of direct selling Direct saling is a distribution or commercial activity made by local farmers who utilise communication skills that make the purchasing experience of the consumers enjoyable and memorable. The key to direct sales is mutual advantage, in which both the producer and customer are winners. The local scale of direct marketing help farmers first of all to minimize transport costs. Selling direct to consumers is one opportunity for farmers to increase their share of the consumer price and to cut some mediators from the distribution chain for these products. Direct selling allows farmers/producers to avoid expensive overheads, reduce advertising costs and run producer’s businesses flexibly. Given the seasonal and territorial characteristics that distinguish direct sale, other cost savings may result from the reduced needs in terms of storage and packaging. In addition to decreasing production costs, direct sales allow farmers to bypass middleman in the distribution chain. The absence of intermediaries result in the above mentioned cost savings that, in turn, make high quality products moved by means of direct channels generally cheaper for consumers compared to those offered by traditional long food supply chains.
  18. 18. MODULE 1 PART I – LEVEL 2 The final decision in favour of direct purchasing is also affected by transaction costs that may offset the above mentioned savings. Farm direct marketing involves consistently supplying quality products in a clean and customer-friendly environment. Selling directly to consumers can be very advantageous to both small farms and fruit and vegetable producers. Direct sales allow farmers, to sell continuously at a premium; thus, leading to income gains. Furthermore, it is important for these farmers to improve consumer opinion of food producers by selling quality goods. Other advantages of direct farm selling are:  It augments farmers’ income and reduces claim for social benefits in rural areas,  It heightens the market share of rural areas in the food chain and in services,  Farm marketing assists local job creation,  It increases the value added of the products,  It differentiates and enlarges the supply of the products,  It helps farmers’ marketing orientation,  It improves farmers’ bargaining position,  It increases consumers’ trust and affects public opinion about food production and supply as a whole,  It respects environmental and animal welfare requirements,  It promotes the development of rural tourism,  It can reduce the need for and the costs of transportation,
  19. 19. MODULE 1 PART I – LEVEL 2 Finally, direct marketing of products to consumers is a form of diversification in which labour resources of the farm household are re-deployed into on farm activities different from traditional agricultural production. As for consumers, direct sales offer first of all the chance to purchase high quality food at reasonable prices. Customers also benefit from the convenience and personal attention they receive from direct salespeople. However, there are disadvantages to direct selling. Direct salespeople can find it hard to reach new customers and can spend a lot of time on customer interactions to make sales. Without the use of a retail outlet, you also need to carefully consider storage and delivery logistics. Many nations still prefer that rural economies in the future should remain in agriculture and sylviculture production, through continued processing, services, commerce and a better infrastructure. One of the possibilities to diversify one’s activities is to build up a direct sales system. The other possibility is to produce local specialities (product diversification) to increase value-added. The effects that these measures have on rural society and the economy confirm their integrative role. In any rural development programme there will be a clear need to coordinate the upgrading of rural markets at farm level with that of associated infrastructure and services if the maximum benefits to agricultural production are to be obtained. This may include upgrading extension services and the improvement of feeder and access roads as well. It should also be noted that directly serving direct marketing at farm’s levels may also be critical links in the transport system.
  20. 20. MODULE 1 PART I – LEVEL 2 Links between rural development and direct selling Direct selling provides a link between urban consumers and rural food producers. It also contributes to the rural economy by providing alternative marketing channels. Less and less of our population lives on or even visits a farm. By adding a recreational component to food consumption, many farm direct marketing enterprises draw urban people to farm communities where they experience a farm atmosphere and spend additional dollars on food, specialty items and other services. This supports sustainable communities. Diversification of farm activities contributes to the well-being of local people in rural areas. These activities contribute to increased employment and to the development of manufacturing and service activities of complementary/ outside worker jobs, in commerce, and tourism. Such activities may also foster cooperation among many other sectors of the economy.
  21. 21. MODULE 1 PART I – LEVEL 2 Types of farm direct selling General concept of direct sales: Direct selling is the action of marketing and selling products directly to the consumer in a non-retail environment (i.e. within a home or work location). These products may or may not be found within a typical retail location. There are many different direct selling tactics in marketing of all products, including sales made through one-on-one demonstrations, home parties, catalogs, internet, phone or door-to-door sales. General direct selling methods include: - person-to-person sales - arranging individual appointments with customers to make presentations, demonstrate new products or arrange product tests or fittings, - door-to-door sales - approaching homes and businesses by appointment or unannounced to leave catalogues and offer products or product demonstrations, - in-home presentations - arranging parties and at-home gatherings to present products (often called 'party plan'), - online shopping - using websites and email lists to build customer networks and offer online ordering facilities, - venue sales - setting up booths or kiosks at events to generate new leads and promote and sell products, - network marketing - recruiting other sellers into a network to 'duplicate' your product sales role, earning a percentage of their sales revenue.
  22. 22. MODULE 1 PART I – LEVEL 2 On farm direct marketing models include: On-farm activities:  Roadside/Farm Gate,  Farm Store/Market,  Pick-Your Own  Community-Supported Agriculture (On-Farm Pick-Up)  Run by groups of farmers or local traders Off-farm activities:  Farmers' Markets,  Co-operatives and farmer associations,  Municipal buying clubs,  Agri-tourism,  Gift baskets and mail-order, Annual events, such as local food festivals specialising in organic food or other products  e-commerce and internet sales,  Direct sales to restaurants,  Delivery to specialty shops and restaurants,  Internet - Online Direct Order,  e-commerce.
  23. 23. MODULE 1 PART I – LEVEL 2 Regulations for direct selling EU and national food and hygiene regulations apply to food businesses throughout the supply chain and include farmers and growers for direct selling. The regulations and requirements that farmers must follow if they want to sell agriculture and food products directly to consumers are important issues for direct selling. They include:  food regulations,  production and marketing legislations,  inspection,  grading and labelling  business licenses and permits,  environmental requirements,  labour requirements
  24. 24. MODULE 1 PART I – LEVEL 2 Direct selling of pecific products requires additional requlations and legislations  Labeling of unprocessed foods,  Labeling of processed foods,  Organic certification,  Eco-labels,  Kosher,  Halal
  25. 25. MODULE 1 PART I – LEVEL 2 The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART I – LEVEL 2 of the module. Which can be an on-farm processed food? a)Jam b)Butter c)Cheese d)UHT milk What is not basic characteristics of farm food processing? a) Products mainly processed according to traditional methods b) Mainly farm family labour c) Processed food in food factory d) Mainly direct sale Question 1 Question 2
  26. 26. MODULE 1 PART I – LEVEL 2 The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART I – LEVEL 2 of the module. Which one is not the consumer expectations for food processing? a)Prices b)Food safety c)Nutritious d)Convenient What is not a contribution of on-farm food processing to sustainability- social and demografic? a)Better inocome (better chance for small farms to resist) b)Less pollution c)More employment in rural areas d)Direct contact Question 3 Question 4
  27. 27. MODULE 1 PART I – LEVEL 2 The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART I – LEVEL 2 of the module. What is on farm direct selling? a)Selling processed foods directly to the consumers on markets b) It is a type of suuply chain management c)Distribution of processed foods to the markets d)It is a marketing strategy in which the farmer or producer sell their products directly to the consumer. What is the advantages of direct selling from farm? a)It is hard to reach new customers and can spend a lot of time on customer interactions to make sales. b)Farm marketing assists local job creation c)It increases the value added of the products d)It improves farmers’ bargaining position, Question 5 Question 6
  28. 28. MODULE 1 PART I – LEVEL 2 The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART I – LEVEL 2 of the module. Which is not an on-farm direct selling activity? a)e- commerce b)Roadside/Farm Gate c)Farm Store/Market d)Pick-Your Own Which is off-farm direct selling activity? a)Roadside/Farm Gate b)Pick-Your Own c)Gift baskets and mail-order d)Farmers' Markets, Question 7 Question 8
  29. 29. MODULE 1 PART I – LEVEL 2 The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART I – LEVEL 2 of the module. Which one is not the regulation and requirement that farmers must follow if they want to sell agriculture and food products directly to consumers? a)Food regulations b)Logistic strategy c)Inspection d)Environmental requirements Which one doesn’t require additional requlations and legislations on farm direct selling? a)Labeling b)Organic certification, c)Eco-labels, d)Halal, e)Cooking Question 9 Question 10
  30. 30. MODULE 1 PART I – LEVEL 2 SOLUTIONS 1)d 2)c 3)a 4)b 5)d 6)a 7)a 8)c 9)b 10)e
  31. 31. MODULE 1 PART II – LEVEL 3 ON-FARM FOOD PROCESSING Europe today is marked by a strong and creative tension. It is a tension between what is global and what is local. On the one hand, we see a Europe which is moving uneasily towards stronger political unity; which already operates as a single Common Market, with freedom of trade and of labour; and in which major global, European or national companies compete for a share of trade within that massive Market. On the other hand, we see a Europe of nations, regions and localities, highly diversified in history, culture, language and resources; in which people take pride in this diversity and in what makes their own locality special; and which contains a multiplicity of local economies and millions of small enterprises. Many value-added food businesses are involved in some aspect of food processing. This may be the simple processing required to make foods available for direct marketing to consumers. Or it may involve a complex, large-scale food processing and manufacturing business. Owning or controlling in some fashion the processing function allows farmers to move up the food supply chain. Processing is the first step in creating a farmer-controlled and integrated food supply chain. On-farm food processing represents an opportunity for farmers that can :  improve farm viability,  build the farm's agriculture economy,  create jobs,  give consumers access to healthy, fresh, local foods.
  32. 32. MODULE 1 PART II – LEVEL 3 Value-added agriculture and on-farm processing Value-added agriculture refers most generally to manufacturing processes that increase the value of primary agricultural commodities. Value-added agriculture may also refer to increasing the economic value of a commodity through particular production processes, e.g., organic produce, or through regionally- branded products that increase consumer appeal and willingness to pay a premium over similar but undifferentiated products. This concept has gained currency in the small farm policy debate, in response to the concern that the farm value of the consumer food dollar continues to decrease. Value added agriculture might be a means for farmers to capture a larger share of the consumer food Euro. This concept includes direct marketing; farmer ownership of processing facilities; and producing farm products with a higher intrinsic value (such as identity preserved grains, organic produce, hormone-free beef, free-range chickens; etc.), for which buyers are willing to pay a higher price than for more traditional bulk commodities. Value-added agriculture is regarded by some as a significant rural development strategy. Small-scale, organic food processing, non-traditional crop production, agri-tourism, and bio-fuels development are examples of various value-added projects that have created new jobs in some rural areas.
  33. 33. MODULE 1 PART II – LEVEL 3 What is food processing? Most of the foods produced in farm such as fruit, vegetables and other animal products can be directly sold to the consumers and other markets. Product safety is the main issue of food processing and on- farm processing. It is this notion of shared responsibility both in the processing and in the preparation of food that is fundamental to ensuring that food is both nutritious and free of the contaminants that cause foodborne diseases. Safe food can give the consumer maximum satisfaction. On-farm processing Almost all food must be processed in some way before it can be eaten. Even fresh vegetables from the garden must be cleaned and trimmed. There are various levels of food processing: 1. Preliminary steps  Harvesting crops, slaughtering livestock or catching and killing game or fish  Cutting, cleaning, packaging and refrigeration of these raw foods make them practical to use for the consumer while preserving moisture content, and preventing (or retarding the growth of) microbes.
  34. 34. MODULE 1 PART II – LEVEL 3 2. Secondary processing: Secondary processing goes a step further in creating a whole array of food products from canned and frozen vegetables to fully prepared dinners, baked breads, cheeses, milk, chocolate bars, biscuits, convenience meats and a variety of other products. The main methods of secondary food processing include:  Heating: Pasteurisation involves heating to temperatures of at least 72°C for 15 seconds to kill most foodborne pathogens and then quickly cooling to 5°C. However, food is not totally sterilised; refrigeration is required and shelf life is limited.  Sterilisation involves heating to temperatures of at least 120°C or more for a couple of seconds, which kills most microbes and inactivates enzymes; the heating process is followed by rapid cooling. Sterilisation significantly increases shelf life and reduces the need for refrigeration as long as the package remains unopened.  Cooling: Refrigeration and freezing maintain food at controlled, low temperatures to keep enzymes inactive and inhibit the growth of microbes. To remain effective, cooling and freezing must be maintained consistently through transport, retail sale and storage at home until shortly before preparation and consumption. The fact that food might spoil at ambient temperatures makes temperature control critical.
  35. 35. MODULE 1 PART II – LEVEL 3  Drying: This produces stable foods by reducing their water content, which, in turn, denies microbes the environment needed for reproduction. Food products where this technique is used are: powdered milk and soups, pasta, meat, fish, potato flakes, cereals, etc. On farm, farmers can use different drying methods to naturaly dry fruits and vegetables by using sun and shadows.  Smoking: This method both dries the food and adds extra flavour. This method is mostly use for meat products and fish.  Fermentation:The process by which microbes produce alcohol or acid, which act as preserving agents. Yoghurt, beer, wine, cheese, salami and some dairy drinks are typical examples.  Food additives. Food additives also play a key role in food processing. Saline is well known natural food additives to prevent vegetables or meat and fisheries products. However, some artificial additives make food acid and thereby protect against spoilage; anti-oxidants prevent fats and oils from becoming rancid; emulsifiers and stabilisers help produce stable mixtures of ingredients which, like oil and water, would otherwise separate.
  36. 36. MODULE 1 PART II – LEVEL 3 Advantages of on-farm food processing “Food processing” is the treatment of a food substance to change its properties with the intention of preserving it, improving its quality, or making it functionally more useful. “On-farm food processing” is food processing done on the farm with food produced on the farm. On-farm food processing is an important market opportunity and have many advantages because it:  Increases the farmer’s share of food Euros by eliminating middlemen  Enhances farm profitability and viability  Expands consumer access to fresh, whole, foods  Builds the local agriculture economy  Creates jobs  Contributes to community culture and cuisine  Conributes to quality of life and tax revenues  Reducing food miles and conserves energy The regulatory environment for on-farm food processing is complex, confusing, and time consuming. But consumers have a right to expect safe food. The regulatory environment for on-farm food processing is complex, confusing, and time consuming. But consumers have a right to expect safe food.
  37. 37. MODULE 1 PART II – LEVEL 3 Buying directly from a farm should not be a compromise in food safety. It’s the farmer’s responsibility to know and comply with regulations. At the same time, government has a responsibility to protect the food supply by developing innovative, cost-effective food safety systems, technology, and services, and by supporting a diverse marketplace. Food safety mistakes can become tragedies all too easily. Farmers must strengthen their regional food system by increasing opportunities for —and mitigate barriers to — farm-direct sales. This includes greater transparency of regulatory requirements at all levels of jurisdiction. Neither political boundaries nor complex regulatory requirements should create obstacles for farmers or consumers. O On-farm food processing policy and regulations should be designed to foster rural entrepreneurship and build rural economies. These policies and regulations should encourage diversity and competition in the food processing market without compromising public safety. Whether it is livestock, dairy, or 30 produce, small batch food processing is vital to agriculture and to a distinctive local cuisine. We recognize that regulations will still set the final perimeters for safe food processing. Market access should not depend upon how or where food is processed, only that it is safely processed.
  38. 38. MODULE 1 PART II – LEVEL 3 Types of on-farm processing systems A number of processing options have strong applicability to sustainable community scale processors. These include:  "ready made" (i.e. ready-to-cook or ready-to-eat) processed foods,  Canning and bottling, a  Custom-packing meat processing. Ready-made processed foods are well suited to local markets, typically involve less capital equipment to produce than other processed foods, and command premium prices. There is good potential to can and/or bottle high acid foods although the best opportunities appear to be for ready-made canned or bottled goods such as soups, stews, and sauces. On-farm or off-farm custom processing of small quantities of chickens also has strong potential. In general, the profitability of industrial food processing firms increases in a linear fashion with firm size. This is why there is a high degree of consolidation and vertical integration in the food processing sector. Nonetheless, there is evidence that small quantity, on-farm processing can be economically viable because the processors are able to keep their costs low by using farm family labor and on-farm kitchen facilities. However, small scale processors that wish to increase their sales of value added products face unexpected difficulties. This is because they are too large to use hand processed, low overhead production methods but not large enough to capture economies of scale.
  39. 39. MODULE 1 PART II – LEVEL 3 The primary exception to this is processors of "ready-made" food products, which can be quite profitable at a medium scale. Farmer controlled processing  Traditionally, farmers receive their lowest returns from the commodity processing market. This is because processors need to acquire their farm inputs for as low a price as possible to compete in the very low margin processed food market.  One strategy to address this is farmer controlled processing. A growing number of on-farm farmers in Europe have established successful grower owned, processing cooperatives to obtain secure markets and better prices. Some of these processing cooperatives are very large. Other farmers have resorted to small scale on-farm processing. In some cases, individual farmers have joined together to jointly purchase processing equipment and storage, washing, and grading facilities. Potential for diverse processing facilities The need for more meat and poultry processing facilities on a variety of scales, the potential for portable processing facilities, a growing demand for organic processing, and mixed-use shared kitchens are increasing. Extensive evaluations of these types have been done in Europe.
  40. 40. MODULE 1 PART II – LEVEL 3 Organic processing laws EU regulation states that the following operations must be legally certified as organic:  The growing or productio ln of primary agricultural products to be marketed as organic  Packing or labelling of unprocessed agricultural products which are to be marketed as organic  Processing, packing or labelling of organic products intended for human consumption and composed essentially of one or more ingredients of agricultural origin  Importation of organic products from outside the EU which are intended for human consumption (whether they be unprocessed agricultural products or products composed of one or more ingredient of agricultural origin). Examples of activities this covers: Traders, retailers, wholesalers, distributors and packers (and animal feed mills, seed production) who break down, pack, repack, relabel or otherwise process bulk materials of organic origin out of sight of the final customer.  Grain traders, merchants and wholesalers of bulk organic products which are removed from their containers and stored on the premises of the title holder/bulk storage facilities for organic products.  Producers who carry out small-scale on-farm packing, or processing of organic products on their farm.  Multi-collection milk hauliers.  Brand holders who supply ingredients to their contractors to process on their behalf .  Packers and prepackers of organic fruit, vegetables and other foods.
  41. 41. MODULE 1 PART II – LEVEL 3 Ensuring quality and safety in processing Food processors rely on modern quality management systems to ensure the quality and safety of the products they produce. The three key systems in use are:  Good Manufacturing Practices (GAP): These entail the processing conditions and procedures that have been proven to deliver consistent quality and safety based on long experience.  Hazard Analysis Critical Control Points (HACCP): While traditional quality assurance programmes focused on the quality of the finished product, HACCP, a recent proactive technique used in the food industry, focuses on preventing defects in the production process itself, rather than identifying them.  Quality Assurance Standards. Adherence to standards established by the International Standards Organisation (ISO 9000) and the European Standard (ES 29000) ensures that food processing, catering and other food-related industries conform to prescribed and well-documented procedures. The effectiveness of these programmes is regularly assessed by independent experts, in order to sustain consumer confidence in the producer's quality assurance procedures.  Environmental quality: In addition to ensuring quality and safety, food processors constantly strive to minimise the environmental impact of their processing and products. This includes continual efforts to reduce air, water and solid waste emissions and to reduce the environmental impact of packaging by using recycled and recyclable materials and reducing the weight of packaging.
  42. 42. MODULE 1 PART II – LEVEL 3  Before and after processing: The quality of food products is dependent on the quality of raw materials and on the quality of transport, storage and sale to the consumer. Therefore, quality management systems of food processors (e.g. ISO 9000 systems) also involve working with the suppliers (individual farmers and raw material wholesalers), transporters, product wholesalers and retailers to ensure quality assurance procedures at each level. On a regular basis, processors brief suppliers on the specific requirements for raw materials and provide technical assistance to help ensure raw material production meets specifications. In addition, quality audits and inspections of raw materials at the point of delivery help ensure that specifications are met. Processors also provide technical assistance to, and conduct audits of, transporters, wholesalers and retailers to ensure that specifications for temperature, moisture and other conditions are met and that sell-by dates are observed. Product quality also depends upon implementation of acceptable protocols for harvesting, storage, and where appropriate, processing of farm products. Harvesting must conform to regulations relating to pre- harvest intervals for agrochemicals and withholding periods for veterinary medicines. Food produce should be stored under appropriate conditions of temperature and humidity in space designed and reserved for that purpose. Operations involving animals, such as shearing and slaughter, must adhere to animal health and welfare standards. Good practices related to harvest and on-farm processing and storage will include those that harvest food products following relevant pre-harvest intervals and withholding periods; provide for clean and safe handling for on-farm processing of products. For washing, use recommended detergents and clean water; store food products under hygienic and appropriate environmental conditions; pack food produce for transport from the farm in clean and appropriate containers; and use methods of pre-slaughter handling and slaughter that are humane and appropriate for each species, with attention to supervision, training of staff and proper maintenance of equipment.
  43. 43. MODULE 1 PART II – LEVEL 3 Harvest, on-farm processing and storage Product quality also depends upon implementation of acceptable protocols for:  harvesting,  storage,  and where appropriate, processing of farm products. Harvesting must conform to regulations relating to pre-harvest intervals for agrochemicals and withholding periods for veterinary medicines. Food produce should be stored under appropriate conditions of temperature and humidity in space designed and reserved for that purpose. Operations involving animals, such as shearing and slaughter, must adhere to animal health and welfare standards. Good practices related to harvest and on-farm processing and storage will include those that harvest food products following relevant pre-harvest intervals and withholding periods; provide for clean and safe handling for on-farm processing of products. For washing, use recommended detergents and clean water; store food products under hygienic and appropriate environmental conditions; pack food produce for transport from the farm in clean and appropriate containers; and use methods of pre-slaughter handling and slaughter that are humane and appropriate for each species, with attention to supervision, training of staff and proper maintenance of equipment.
  44. 44. MODULE 1 PART II – LEVEL 3 Protecting food through packaging Food packaging is an important part of food preservation and safety. It ensures that food reaches the consumer in peak condition. Packaging is not just a simple box; it is in fact a system for preserving the safety and quality of food products in transport, wholesale warehouses, retail stores and in the home. It does this by:  maximising shelf life by acting as a barrier against water vapour, air, and microbes. Similarly, packaging also retains moisture and gases, which preserve product freshness and safety,  carrying important information on the label (brand name, use-by dates, ingredients, refrigeration or cooking requirements, recipes, etc.) to help the consumer store products safely at home,  providing evidence that the product is intact and has not been tampered with,  preventing loss of aroma and protecting against odours from external sources,  bar codes on packaging identifying the date and the location of manufacture which enables processors, transporters and retailers to keep track of products for both inventory control and identification of potential hazards.
  45. 45. MODULE 1 PART II – LEVEL 3 Long term‐ recommendations for on-farm food processing To increase opportunities for on-farm processing focus on changes in the culture of the food safety industry, and changes that need to be made at farm and Europe level:  Support diversity in food processing methods and scale of operations  Diversify food safety regulations to accommodate the diversity in producers, products, production methods, and production facilities  Increase access to inspectors with mobile inspectors for on-farm processing, mobile processing units, seasonal operations, and very small operations  Foster innovation in super small scale, super high tech solutions for food safety technology  Design portable food safety systems for on-farm and farmers market environments  Green food safety  Reduce the ecological footprint of food safety  Develop organic food safety standards  Design zero pollution food safety systems  Require food safety systems to protect top soil and reduce erosion  Require food safety systems to conserve energy
  46. 46. MODULE 1 PART II – LEVEL 3 DIRECT SELLING Today, most food moves from the farm gate to the consumer through a highly efficient system that takes advantage of economies of scale and specialization to keep processing and distribution costs low. The basis of farm direct marketing is the trust relationship that develops between producers and consumers. Farm direct marketing allows the producer to assume the accountability and rewards of delivering quality agri-food products directly to the consumer through a variety of marketing channels such as farmers’ markets and farm gate sales. Direct farm marketing requires being much more involved in the marketing and sale of a product to the end user - the consumer - than conventional primary production agriculture. Unlike traditional methods of selling products, such as wholesale into the marketplace, direct farm marketing allows for greater control by the producer into the production and selling of a product, including the ability to be a price maker - not a price taker. Most producers devote their time to what they know best, planting, growing and harvesting food, leaving the processing and marketing to agri-business. However, selling directly to consumers is growing in popularity with some producers. Farm direct marketing provides a link between urban consumers and rural food producers. It also contributes to the rural economy by providing alternative marketing channels. Less and less of our population lives on or even visits a farm. Several reasons account for the increased interest in farm direct marketing: - One is dissatisfaction with farm commodity prices. - The farm price is often only a fraction of the retail food price. - Prices for produce sold directly to consumers can be substantially higher than typical wholesale prices. - Another reason is that producers value the relationships they form with the consumers, as well as the
  47. 47. MODULE 1 PART II – LEVEL 3 Consumer trends affecting farm direct selling Consumer preferences and market trends are changing day by day because of changing demands for natural and organic products. Consumers want to know where their food comes from, how it is grown and the people who produce it. A growing number of health-conscious consumers are willing to search out and pay extra for foods they believe to be fresh, nutritious and wholesome. Others are interested in eating regional cuisine – local food that is picked and prepared at its freshest. This trend is reflected in foodservice as an increased demand for old-fashioned, comfort foods with a gourmet twist. These consumer demands are driving farm direct marketing. Consumers are concerned about:  convenience – great tasting foods to be consumed on the go  family – they want family friendly activities in which everyone can participate  community – they support local business  balance – they want balance between work and family  authenticity – they look for the simpler things in life  security – they want to deal with people they know and trust
  48. 48. MODULE 1 PART II – LEVEL 3 As consumers look for convenience, health, flavour and fun, we see the emergence of new markets:  baby boomers  individuals  blended families  health correction, e.g. weight loss  ethnic, e.g. Asian, Italian  organic  students  vacation home owners/fun seekers Present tendencies show that most customers stick to these traditional, nondirect methods of trade. Although convenience is key, in recent years trends have shown that some factors have decreased consumer trust in mass-produced goods. Reasons for this distrust include the lack of transparency in the food supply chain, the growing number of food scandals (dangerous spices, paprika case of toxin, dioxin-polluted poultry, BSE), and new technologies alarming consumers. In response, today’s consumers are searching for food that:  is safe to consume and aren’t harmful to one’s health,  is of proven origin, and their producer is authentic,  the consumption of which is delightful,  and the production of which suits the growing aspects of the environment and animal welfare. Both inland and international trends show that consumers increasingly associate these preferences with regional (traditional and country-character) and organic (bio-) products.
  49. 49. MODULE 1 PART II – LEVEL 3 Participating in these activities requires having a marketing mindset and being committed to building strong relationships with consumers who want to buy directly from a farmer. The first step is to understand the marketplace and the business skills required for starting and maintaining a direct farm market operation. Start by answering the following questions:  Do I or could I produce products that the consumer is interested in buying through a direct farm marketing channel?  Are my family and/or employees interested in having direct contact with the consumer on the farm property?  Is my farm property located near a population base or market large enough to support the direct farm marketing operation?  Do I understand the type of consumer to target for my direct farm marketing business?  What are the local bylaws, rules or regulations that apply once the farm moves beyond production agriculture into direct farm marketing?  What customer service strategies can I use to build customer loyalty?  Do I have interest and skills in the area of retail marketing and/or displays and storefront exhibits?  How will I create curb appeal and deal with parking and other infrastructure needs such as public washrooms?  How will I create an image through displays, signs, product mix and landscaping? What do I want that image to be?  What is my risk management plan and incident reporting plan to deal with the unexpected, such as injury, fire or product damage and/or theft?  Do I understand the importance of developing a comprehensive business plan to ensure I have considered: finances, human resources, social responsibility, production/operations, marketing ?
  50. 50. MODULE 1 PART II – LEVEL 3 Types of direct farm selling Traditional direct selling is an effective way to grow a flexible, low-cost business. Direct selling involves an independent salesperson selling products or services directly to customers, often at a customer's home or workplace. Traditional direct selling methods include door-to-door sales, party plans and network marketing. In many countries farmers sell their products directly, with many of these countries having their own regulations and practices concerning direct sales. Farmers have many options in developing a direct sales form. They may sell the product in their own shop, through a catalogue, and/or deliver to restaurants and shops. Direct sales channels, beyond those already mentioned include: on-farm sales, wayside stands, and in local markets where they sell their own products of the given season. In recent years, more and more organic markets play an important role in the direct sales market segment. Direct sales to customers is most widely found in fruit production. This type of operation is commonly known as “u-pick,” where it is the customers who pick and transport the fruit. Another version of direct sales is when farmers use “mobile shops” to sell their products, so producers transport products to the customers in the city. Producers taking the direct farm marketing route have the opportunity to choose the type of operation they wish to pursue based on their product mix, skills and market access. The most popular types of direct farm marketing include:  on-farm activities such as roadside stands, farm markets/shops, pick-your-own operations and community-supported agriculture.  off-farm activities such as being a vendor at one or several farmers' markets, selling through the Internet using mail order and direct delivery to specialty shops and restaurants
  51. 51. MODULE 1 PART II – LEVEL 3 Direct selling strategies can vary immensely. The right channel(s) will depend on the wants, needs and characteristics of the market. It is important to research market and try a number of different channels before determining the best approach. Using multiple selling channels can reduce risk, increase earnings and make use of hard-to-sell produce. As the interest in purchasing locally produced food continues to increase, direct selling will become a valuable strategy. Types of direct selling on farm and from farm operations include: 1. Farmers Markets: A farmers' market is a gathering of several producers on a regular basis to sell a variety of locally produced fruits, vegetables and other value-added farm products directly to consumers. Farmers' markets are commonly held on weekends throughout the metropolitan area and in many towns, which may require travel. Markets provide a suitable environment for farmers and food producers to sell direct to customers products of farm-origin and associated value-added or processed artisan food. Be it organic, bio-dynamic or conventional production systems, the fresh produce available at farmers’ markets continues to attract a loyal and enthusiastic following. A regular stall at a farmers' market requires very little capital investment. It will require a table, shelter, packaging and signage to identify your business name, products and their price.
  52. 52. MODULE 1 PART II – LEVEL 3 Costs may include stall fees, equipment, packaging, public liability insurance, sales labour, transportation and storage. Advertising costs are commonly low as it is done en-masse by the farmers' market you are participating in and is usually included in your stall fees. Keep moving by sprucing up here or re-stacking there. People are attracted to activity  Consider offering samples of your delicious product for customers to try  Good signage is essential. Clearly label crops, prices, and product information  Pictures and information about the farm, farmers, and family are of interest to many customers.
  53. 53. MODULE 1 PART II – LEVEL 3 2. Co-operatives and farmer’s aasociations : Co-operatives and associations are organisations owned and operated by a group of people with similar needs. A co-operative may be established by a group of people producing the same products as a way to market their products together at an overall lower price. It may also mean that with increased volume, co-operatives can enter markets that they were unable to penetrate on their own. A co-operative may also pack, store and ship a product. 3. Farm shops/ farm markets: The types of farm store/markets range from seasonal to a full-functioning, year-round country store, offering consumers an alternative to the supermarket. Success often depends on good research into the local market, products and ways to develop customer loyalty. To be considered a farm shop, you should aim to sell fresh produce and/or local foods that are normally grown, picked, reared or produced on your farm or on land close to where the shop is located. 4. On-farm stands: There are several different ways to operate an on-farm stand, ranging from simple, self-serve stands to elaborate roadside attractions. Self-serve stands require very simple and clearly written directions for the customer to follow, and a slot-drop box, preferably locking, for payment. Some key elements for success in marketing with this method are: refrigeration (keeps your product fresh); clearly written, eye-catching directional signage with dates and times of operation; convenient access from a main road, and ample parking. 5. Roadside/farm gate: An entry-level approach to direct farm marketing involving little capital investment, roadside/farm gate sales can be as simple as a wagon or as elaborate as a small shed located at the end of your driveway.
  54. 54. MODULE 1 PART II – LEVEL 3 6. Pick-your-own/ U-Pick marketing: These were very popular in the 1970s; those remaining have become unique and different. Many have added "edutainment" or "agritourism" targeting school groups and families or have expanded into special interest markets such as corporate picnics, film companies, etc. As well as a farm shop, you can consider allowing consumers to pick their own produce by operating as a pick-your-own farm. Farm shops and pick-your-own farms bring customer to the door, saving labour and transportation costs, and cut out the middleman. A number of factors will determine the viability of a pick-your-own, including:  Location  access and parking facilities  local competition  suitable buildings  a steady supply of seasonal and marketable local produce You should check with your local planning authority to make sure a farm shop complies with regulations. Planning permission may be required for a new building or a change of use on an existing building to provide premises for a farm shop. Crops that are best suited for U-pick marketing are those that harvest easily and where ripeness is easily determined. Small fruits, vegetables, pumpkins, and Christmas trees are the most common U-pick crops. U-pick is a good method for reducing harvesting expenses, but a great deal of time may be required to manage the public effectively – from sales transactions and harvesting instruction to field management for
  55. 55. MODULE 1 PART II – LEVEL 3 7. Community-supported agriculture (On-Farm Pick-Up): Community Supported Agriculture is a marketing system where customers buy “shares” in a farm’s harvest. They pay a sum at the beginning of the season, providing the farm with up-front capital. In return, each customer receives a weekly allotment of produce. Produce is either delivered to the customer’s door or a drop-off site or picked up at the farm. Only a well-experienced farmer who has a good understanding of production schedules should employ this type of marketing. In theory, the “shareholder” and grower share the risks of production throughout the season. In practice, however, the farmer must deliver a steady supply of product if the wish to retain customers for the following season. In basic terms, community-supported agriculture consists of a community of individuals who pledge support to a farm operation so that the farmland becomes, either legally or spiritually, the community's farm, with the growers and consumers providing mutual support and sharing the risks and benefits of food production. Members or shareholders of the farm or garden pledge in advance to cover the anticipated costs of the farm operation and the farmer's salary. In return, they receive shares in the farm's bounty throughout the growing season, as well as satisfaction gained from reconnecting to the land. Members also share in risks, including poor harvest due to unfavourable weather or pests.
  56. 56. MODULE 1 PART II – LEVEL 3 8. Farm-to-restaurants, cafeteria and retail stores : This approach takes research and commitment but allows producers to highlight their products. It also promotes domestic and local products in such places as grocery stores, restaurants, local events and attractions. Restaurants seeking distinction in a competitive business are capitalizing on an increased consumer interest in local and organic foods. Selling product to institutional cafeterias, such as schools, senior congregate meal sites, hospitals, and correctional facilities, can be a good market for farms. Public awareness of childhood and adult obesity rates has drawn attention to environmental solutions such as bringing more healthy foods into school and worksite cafeterias. Local farms have an advantage in supplying fresh and flavorful foods, which have been shown to increase consumption of fresh fruits and vegetables. Farm-to-Cafeteria programs in schools often include agriculture and nutrition education into curriculum or student activities, such as growing a school garden. Sales to retail stores and restaurants are accomplished through wholesale distributors, but an organized farmer with a consistent supply of seasonal produce can form direct working relationships with these customers.
  57. 57. MODULE 1 PART II – LEVEL 3 9. e-commerce- internet - online direct order (mail-order): The use of the Internet and online direct ordering is increasing. It requires background research and development. It can build customer loyalty for products and is not limited to time, space or geography. The more recent development of internet tools has facilitated the launch of electronic means of direct sales, called “internet marketing.” This form of marketing provides a new opportunity to develop direct sales patterns. It is also important to mention the new direct-from-farm on-line food sale networks, that are already running in many EU countries. Mail order marketing through catalogs and/or the Internet is a good way to reach a broad-based audience. Websites are great for providing information about your farm and facilitating sales once your customer is already familiar with your products. Mail order marketing is best used for products that have a long shelf life and are easily packaged for shipping. However, there is opportunity for selling live plants, fresh flowers, meats, and produce. This method of marketing requires paying attention to effective organization, maintaining a database of customers and catalog recipients, and receiving, filling, packing, and sending orders. Selling through an established catalog or Internet company may save organizational time and effort, but the price you receive for your product will be less, and your name may not accompany your product.
  58. 58. MODULE 1 PART II – LEVEL 3 10. Gift baskets: This method of marketing can be a sideline to a farm store or operate on its own. Since both gift basket and mail order sales are built on repeat business, it may take years to build a substantial income. Start slowly by offering gift basket or mail order sales in addition to existing market outlets. Gift baskets work best with products that can be attractively displayed. Often price isn’t as important as quality and uniqueness. Mail order items are usually non-perishable products that can be easily packaged and shipped. Both options require high quality products, packaging and customer service. 11. Agri-tourism: Also known as “entertainment farming”, agri- tourism is becoming a popular way to attract customers and bring more income to the farm. Tourists today are considered “knowledge seekers” and many are visiting places closer to home. They are seeking authentic experiences of farm life. Cultural heritage and eco- tourism are the fastest growing sectors of the tourism industry. All these trends lend themselves to the success of agri-tourism activities. There are several ways to incorporate tourist activities on your farm, including U-pick crops; horseback riding; bed & breakfast; demonstrating farm equipment or techniques; and regional harvest festivals. Surprisingly, people are willing to pay for activities that would have seemed ridiculous years ago, such as milking a cow, or weeding the dahlia patch.
  59. 59. MODULE 1 PART II – LEVEL 3 General rules and legislations for direct farm selling Direct farm marketing moves beyond primary production and wholesale marketing and is often referred to as value-added agriculture. Before investing in a direct farm marketing venture, be aware of what best management practices, applicable rules and regulations you will have to learn and adhere to. Key considerations that may affect a direct farm marketing venture include: Certification: The criteria used to assess what a farmers’ market is and to award certification require that to be eligible for sale at a market, fresh produce must be from the area defined as ‘local’ to that market. Labeling: All processed foods sold direct to wholesale or retail must bear labels on their packaging. This includes processed foods sold at farmers markets, on the Internet, to restaurants, or grocery stores. This includes prepackaged, chopped, canned, baked, and frozen foods. Organic certification: “Organic Agriculture” is defined as an ecological production management system that promotes and enhances bio-diversity, biological cycles, and soil biological activity. It is based on minimal use of off-farm inputs and on management practices that restore, maintain, and enhance ecological harmony. . Eco-labels: In addition to “Certified Organic,” numerous other eco-labels are available for promoting farm products. An eco-label is a seal or logo that makes a specific claim about a product. There are primarily two types of eco-labels. Production-based labels reflect that a product meets various ecologically significant production requirements. Place-based labels indicate a product was grown within a specific geographical region. Eco-labels do not always ensure a higher price premium for products, but they can
  60. 60. MODULE 1 PART II – LEVEL 3 Kosher: The word kosher is an adaptation of the Hebrew word meaning “fit or proper.” A product is certified as kosher when it is produced in accordance with Jewish Law. Kosher certification is applicable to food, drinks, and utensils. Foods that are certified Kosher must be certified by local or national kosher certification boards, and must display the logo of their certifying board on the product's label. Some of the dietary laws applied to Kosher food include:  No shellfish,  Limited to animals with cloven hoof that chew their cud,  No mixing of meat and dairy products,  Equipment used for a dairy or meat product must be appropriately cleaned before being used for any other product,  Animals and fowl must be ritually slaughtered,  Only fish that have both fins and scales are kosher,  Food production must be verified through inspection by a kosher monitoring agency or an Orthodox Jewish rabbi. Inspections are generally repeated on a monthly basis. .
  61. 61. MODULE 1 PART II – LEVEL 3 Halal : Halal is an Arabic word meaning “lawful or permitted”. It is the dietary standard used by Muslims. Food that is shipped to Muslim countries or is intended for Muslim should obtain Halal certification. Fees for this service will vary depending on a number of factors, including type of product and marketing information about the products being certified. All foods are considered Halal except the following:  Swine/pork and its by-products,  Animals improperly slaughtered or dead before slaughtering,  Animals killed in the name of anyone other than God,  Alcohol and intoxicants,  Carnivorous animals, birds of prey and land animals (i.e. snakes and lizards),  Blood and blood by-products,  Foods contaminated with any of the above,  Foods containing ingredients such as gelatin, enzymes, emulsifiers, etc. may or may not qualify as Halal.
  62. 62. MODULE 1 PART II – LEVEL 3 Food safety, service and processing, EU food hygiene regulations: Food safety regulations will apply to your operation if food service or food processing - such as on-farm snack areas or selling baked goods and/or preserves - is done on your farm. Different sectors may have different regulatory requirements. If you intend to serve or process raw food, you will need basic food hygiene training and a certificate. Supervisors will require a higher level of training and an intermediate certificate. All staff involved with processing food will also need a Hazard Analysis and Critical Control Points (HACCP). This is a preventative approach to food safety based on due diligence and good record keeping. EU food hygiene regulations apply to food businesses throughout the supply chain and include farmers and growers. Your duties under the regulations will depend on the size and type of your business, but most food businesses must register all of their premises with their local authority. The premises of businesses producing meat and meat products, eggs, milk and dairy products, and/or fish and fish products need to be approved by their local authority. Specific hygiene requirements for milk and egg production still exist, but in general farmers and growers must follow good hygiene practice and management procedures to control food safety hazards. Primary producers are not required to have a HACCP system.
  63. 63. MODULE 1 PART II – LEVEL 3 Legal regulation of direct sales: In EC regulations 852/2004/EC and 853/2004/EC, the hygienic conditions of producing and distributing foods are presented. These regulations provide members states with the opportunity to create their own regulations concerning directly and locally distributed food, according to the EU-principle of tradition and flexibility. Regulation (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs1 entered into force on 3 January 2013. Article 55 states that the Commission shall present ‘a report to the European Parliament and to the Council on the case for a new local farming and direct sales labelling scheme to assist producers in marketing their produce locally’ by 4 January 2014. This report ‘shall focus on the ability of the farmer to add value to his produce through the new label, and should take into account other criteria, such as the possibilities for reducing carbon emissions and waste through short production and distribution chains’. Finally, the report ‘shall, if necessary, be accompanied by appropriate legislative proposals on the creation of a local farming and direct sales labelling scheme.’ This report will examine the socio-economic and environmental implications of local farming and direct sales and discuss possibilities for introducing an EU-level labelling tool. Other related issues for direct selling take into consideration are:  Registering patents, trademarks, copyright,  Human resources,  Marketing regulations,  Taxation,  Zoning/Bylaws,  Signage,  Public health
  64. 64. MODULE 1 PART II – LEVEL 3 Guiding principles for farmers working with farm-direct sales regulation  Know the food safety regulations for the food you sell  Establish relationships with food safety agencies and inspectors  Stay abreast of food safety news and changes in food safety policy  Learn who has jurisdiction over food safety in each and every market where you sell food  Be proactive in complying with food safety regulations  Develop food safety regimes for your farm and food processing  Teach food safety practices to your family, employees, and customers  Promote food safety at the markets where you sell food  Keep good records of your food safety licenses, permits, and certifications  Be prepared for a food safety inspection at any time.
  65. 65. MODULE 1 PART II – LEVEL 3 TEST The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART II – LEVEL 3 of the module. Which is not an advantage of on-farm food processing? a)Improve farm viability b)Build the farm's agriculture economy, c)Increase imigration d)Create jobs, What is the main methods of secondary food processing? a) Heating b) Drying c) Fermentatipon d) All Question 1 Question 2
  66. 66. MODULE 1 PART II – LEVEL 3 TEST The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART II – LEVEL 3 of the module. What is not the EU regulation for having certified as organic? a)The growing or productio in of primary agricultural products can be marketed as organic b)Packing or labelling of unprocessed agricultural products which can be marketed as organic c)Processing GMO products, packaging or labelleing can be called as organic d)Processing, packing or labelling of organic products intended for human consumption and composed essentially of one or more ingredients of agricultural origin Which is not directly affect product quality in on-farm processing? a)Harvesting b)Cooking c)Storage Question 3 Question 4
  67. 67. MODULE 1 PART II – LEVEL 3 TEST The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART II – LEVEL 3 of the module. What is not a reason for the increased interest in farm direct marketing? a) One is dissatisfaction with farm commodity prices. b) The farm price is often only a fraction of the retail food price. c) Increase in population d) Opportunity to receive immediate feedback on their products. Which products are most widely found in direct selling operations? a) Chicken meat b) Vegetables c) Fruit d) Honey Question 5 Question 6
  68. 68. MODULE 1 PART II – LEVEL 3 TEST The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART II – LEVEL 3 of the module. What is not true for a successful farmers markets? a) They should located in city center b) Good integrity (e.g. sell only locally produced food) c) Cleanliness in appearance of the product and the seller d) Engage the customer with a friendly demeanor. Make eye contact and smile Which is an on farm direct selling method? a)Farm shops, b)Pick-your-own c)Roadside marketing d)The mall Question 7 Question 8
  69. 69. MODULE 1 PART II – LEVEL 3 TEST The following test has ten questions, each one including four answers with only one correct, based on the information presented in PART II – LEVEL 3 of the module. Which is not a key consideration that affect a direct farm marketing? a)Certification b)Logistic c)Labelling d)Eco-lab Which one is Halal food? a)Swine/pork and its by-products, b)Meat of animals dead before slaughtering, c)Lamb meat killed in the name of God d)Blood and blood by-products, Question 9 Question 10
  70. 70. MODULE 1 PART II – LEVEL 3 TEST SOLUTIONS 1)d 2)c 3)a 4)b 5)d 6)a 7)a 8)c 9)b 10)e
  71. 71. MODULE 1 GLOSSARY Advertising cost: A category included in financial accounting to represent expenses associated with promoting an industry, entity, brand, product name, or specific products or services in order to stimulate a desire to buy the entity's products or services. Agri/agro tourism: It is defined most broadly, involves any agriculturallybased operation or activity that brings visitors to a farm or ranch Direct selling: The sale of a consumer product or service, person-to-person, away from a fixed retail location, marketed through independent sales representatives who are sometimes also referred to as consultants, distributors or other titles Entertainment farming: A highly consumer-focused type of agriculture, which may offer additional options for diversification and add stability to farm incomes E-commerce: Trading in products or services using computer networks, such as the Internet Eco labels: Labeling systems for food and consumer products Farm marketing: A physical retail market featuring foods sold directly by farmers to consumers. GAP: Good agricultural practices Gift baskets: Typically a gift delivered to the recipient at their home or workplace
  72. 72. MODULE 1 GLOSSARY HACCP: Hazard Analysis And Critical Control Points Systems. Halal: Any object or an action which is permissible to use or engage in, according to Islamic law. Kosher: Products that conform to the regulations of kashrut (Jewish dietary law). Food labelling legislations: The packaging and labelling of food is subject to regulation in most jurisdictions, both to prevent false advertising and to promote food safety. Network marketing: A business model in which a distributor network is needed to build the business On-farm processing: The practice of taking the crops you grow or livestock you raise and processing them into a new and different product. Organic certification: A certification process for producers of organic food and other organic agricultural products. Pick- your own/U-pick: Farm operations are a type of farm gate direct marketing (farm-to-table) strategy where the emphasis is on consumers doing the harvesting themselves. Product safety: The ability of a product to be safe for intended use, as determined when evaluated against a set of established rules. QLIF: Quality low input food Value-added agriculture: Manufacturing processes that increase the value of primary agricultural commodities.
  73. 73. MODULE 1 USEFUL LINKS Useful Links Anonim, 2006. The handbook of regulations for direct farm marketing “ the gren book”. Fifth edition, Washington State Department og Agriculture small farm & direct marketing program. Anonim, 2008. Green Food Policy for Europe. Strengthening European food culture (As adopted at the EGP Council, Montreuil, Paris, 9th-12 October 2008) Anonim, 2013. Food safety at farmers markets. 2013 Market Season Information & Guidelines, Oregon Department of Agriculture. Anonim, 2013. Report on the case for a local farming and direct sales labelling scheme from The Commission to the European Parliament and The council. Brussels, 6.12.2013. Aguglia, L., Santis, F.D., and Salvoni, C., 2010. Direct Selling: a Marketing Strategy to Shorten Distances between Production and Consumption. Paper prepared for presentation at the 113th EAAE Seminar “A resilient European food industry and food chain in a challenging world”, Chania, Crete, Greece. Born, H. and Fanatico, A., 2009. A Guide to On-Farm Processing for Organic Producers. An Overview and Four Example Enterprises: ATTRA—The National Sustainable Agriculture Information Service. Hanf, J.H., 2014. Processor driven integration of small-scale farmers into value chains in Eastern Europe and Central Asia: A synthesis paper. Food and Agricultural Organization of United Nations. Moya, K., 2013. Short Food Supply Chains and Local Food Systems in the EU. A State of Play of their Socio-Economic Characteristics. European Commission Report EUR 25911. Myers, G.S., 2009 .Making on-farm processing available economic option in Maryland. Developing Policy and Technical Support Systems to Accommodate Small-Scale Food Processing in Maryland, University of Maryland Extension Western Maryland Research and Education Center. Pugh, C.J., 2003. Liability Concerns for Farmers Involved in Direct Marketing of Farm Products. Agricultural Law Research and Education Center Pennsylvania State University, Dickinson School of Law. Tome, B., 2014. Report on the case for a local farming and direct sales labelling scheme Advisory group on beekeeping. Brussels, 25 February 2014 . Zurnacı, N., 2012. Kırsal turizmde; girişimcilik ve örgütlenme. KMÜ Sosyal ve Ekonomik Araştırmalaṙ Dergisi 14 (23): 65-70̇
  74. 74. MODULE 1 USEFUL LINKS http://www.nofa.org/policy/regulations.php http://www.agriculture.ny.gov/FS/industry/sanitary.html https://www.gov.uk/farm-shops-and-farmers-markets http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex3482 https://www.agric.wa.gov.au/market-development-access/direct-selling-channels-small-producers https://www.business.qld.gov.au/business/running/marketing/direct-marketing/direct-selling http://www.omafra.gov.on.ca/english/busdev/facts/11-011.htm#directfarm http://en.wikipedia.org/wiki/Value-added_agriculture http://ftp.cordis.europa.eu/pub/food/docs/oresnik.pdf http://www.agmrc.org/business_development/operating_a_business/operations/food-processing/ http://www.fao.org/prods/gap/home/principles_8_en.htm http://www.macaulay.ac.uk/livestocksystems/nafplio/proceedings/revellpaper.htm http://www.soilassociation.org/farmersgrowers/technicalinformation/onfarmprocessing https://www.extension.umd.edu/newfarmer/beginning-farmer-topics/farm-food-processing http://www.eufic.org/article/en/food-safety-quality/farm-to-fork/rid/farm-to-fork-food-processing/ http://www.uvm.edu/farmtransfer/LegalGuideIX.pdf http://www.uvm.edu/farmtransfer/LegalGuideIX.pdf http://www.macaulay.ac.uk/livestocksystems/nafplio/proceedings/revellpaper.htm http://ucanr.org/sites/Grown_in_Marin/files/83624.pdf www.intechopen.com
  75. 75. MODULE 1 LEVEL 3 CERTIFICATE

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