Looking for growth in Maine’s agricultural economy

By Stephanie Welcomer, Special to the BDN
Posted Sept. 23, 2011, at 5:45 p.m.

Maine’s agricultural sector has played a prominent role in the state’s economy, culture and environment for more than a century. Of Maine’s approximately 20 million acres, about 1.35 million are devoted to some aspect of farming. Figures from the 2007 United States Department of Agriculture Census indicate Maine’s 8,100 farms produce a wide variety of crops — about 80 — on farms that range in size from less than an acre to several thousand acres.

The state’s contribution to U.S. agriculture is notable. Maine ranks eighth in the nation for potatoes, according to a 2003 study by Planning Decisions Inc., and 12th for fruit exports, according to the USDA. Economically Maine’s farms produce about $617.2 million in agricultural yield, placing it second to Vermont in New England and accounting for about 25 percent of New England’s total production, according to USDA data.

But farmers today face a changing landscape. Culturally, the buy-and-eat local food movement is growing, as individuals are paying increasing attention to how and where their food is grown. Meanwhile, health concerns are increasing, with record numbers of U.S. residents classified as obese and facing health risks from heart disease and diabetes.

The percentage that food purchases take from household budgets has increased due to stagnant income levels, higher fuel prices and resulting higher food prices. Environmentally, freshwater access across the globe is diminishing as human populations and corresponding irrigation systems rise. Finally, increasing volatility in weather patterns has increased farming’s unpredictability.

Fortunately, Maine’s agriculture can be competitively positioned to capitalize on opportunities emerging from these shifts. Unlike other areas in the country, it has abundant access to freshwater. USDA figures from 2010 show that relative to other states in New England, Maine has a large undeveloped land base with farm real estate that is the least expensive in New England and the mid-Atlantic.

Maine also has an established diversified farming sector with a knowledge base that helps existing growers as well as new start-ups. Finally, the market potential of 60 million people within a day’s drive of the state is an exciting prospect for Maine agriculture.

These factors give the state’s growers very rich possibilities, but farming in Maine faces several serious problems. To gain insight into the state of farming in Maine and how growers view their future, a team of University of Maine faculty, funded by the University of Maine System Board of Trustees, interviewed farmers about threats, opportunities and their needs for the future. Led by John Jemison, Jane Haskell, Damon Hall and I interviewed about 180 farmers, including dairy, potato, beef, apple, blueberry and vegetable farmers. We also interviewed organic farmers, ornamental producers, several mixed groups of farmers and a group of crop consultants.

Across all farming sectors, farmers are optimistic about the positive effect of the local food movement on markets. Consumer interest in local food has boosted both direct markets such as community-supported agriculture groups (where individuals pay a fixed amount before the growing season in exchange for a portion of the farm’s produce over the season) and farmers markets. Maine has doubled its farmers markets in the last five years to about 100 today, and all indications are this growth will continue.

But to expand beyond these important but relatively small direct markets, improvements in Maine’s limited distribution system and processing facilities are required. Growers who wish to transport products from rural places throughout the state are not close to rail systems or major highways. Transportation costs are driven up by time and the use of smaller conveyance systems to move products. Facilities for large-scale animal processing often are located out of state or in the southern third of the state, driving up product costs.

Other issues farmers discussed are the substantial barriers farmers face to enter the field of agriculture. Farming requires huge capital investment in land, equipment and inputs, both at start-up and subsequently in necessary farm improvements to stay competitive. Despite the work by Maine Farmland Trust, access to affordable land is an increasingly serious problem.

Managing the large debt burden is a major concern to farmers. Both new and veteran farmers need affordable health care for themselves and their families. Farmers perform very physical work in sometimes harsh conditions. They often can afford only catastrophic health care plans and speak of the very real risks of not being able to pay for more routine health care needs.

Expanding and developing Maine’s agriculture ensures that the state extends its commitment to producing goods on working landscapes, helps ensure food security for the state’s residents and supports an industry that helps rural communities stay vibrant and self-sustaining. Our research suggests that we can take actions to enhance agriculture in Maine.

Public policy and public-private partnerships supporting improvements in transportation and processing infrastructure, as well as incentive mechanisms to preserve farmland, would help anchor and grow farming. Affordable health care also would promote long-term viability. A food-secure future is dependent on a strong Maine agriculture. This includes greater support for our local farmers today, the state making infrastructure investments to create market opportunities and Maine institutions purchasing greater amounts of Maine-grown food.

Perhaps most importantly, we need to invest in the next generation of farmers and underwrite educating them in the science, business, communication and marketing skills necessary for farming success.

Stephanie Welcomer, Ph.D., is interim associate dean of the University of Maine’s Maine Business School and an associate professor of management. She teaches strategic management and organizational behavior and conducts research in sustainable business.

http://bangordailynews.com/2011/09/23/business/biz-beat/looking-for-growth-in-maine%e2%80%99s-agricultural-economy/ printed on October 1, 2014