Value capture analysis of small organic growers and their distribution channels in California

Abstract

Value capture analysis of small organic growers and their distribution channels in California growers (USDA, 2012). In terms of sales volume, California represents 40% of all organic product sales in the US. It ranks first, with sales of $2.2 billion, followed by the state of Washington, with $515 million (CENSUS, 2014). The 2008 Organic Production Survey (OPS), administered by the National Agricultural Statistics Service, was a follow-up to the 2007 Census of Agriculture and was the first survey of organic agriculture in the United States (KLONSKY, 2010). According to this survey, California leads the nation in terms of the number of organic farms, the land used in organic production, and organic sales. Overall, California represents 19% of all organic farms and over one-third of all organic farmgate sales derived from California farms came from just 12% of the organic acres and 19% of the organic farms. These numbers suggest either a concentration in production among larger growers or a focus on high-value crops by some growers. Conversely, there appears to be a large number of small organic farms. By crop category, California produces more than two-thirds of organic fruits, vegetables, and nuts in the entire country. According to the 2012 Census of Agriculture (CENSUS, 2014) 63% of US organic farms reported selling products to wholesale markets. These sales accounted for 78% of U.S. organic farm sales. Wholesale markets, such as buyers for supermarkets, processors, distributors, packers, and cooperatives, served as the marketing channel of choice for U.S. organic farmers to provide organic agricultural products to customers (CENSUS, 2014). However, according to Forshungsinstitut für biologischen Landbau-International Foundation for Organic Agriculture-Fibl-Ifoam (2015), organic producers were much more likely to report direct-to-consumer sales than were conventional producers. Although 7% of all U.S. conventional farms sold agricultural products directly to consumers, 42% of organic farms reported such sales. The international literature on organic products indicates that the production and distribution characteristics of organic and conventional agriculture are relatively similar. However, organic agriculture has traditionally been especially important for small farmers and producers because it favors their entry into the global market and provides opportunities for enhancing income, despite the small scale (GONZÁLEZ; NIGH, 2005; VORLEY; FOX, 2004; ELDER; LISTER; DAUVERGNE, 2014). The decision regarding which channels to access, as well as the most appropriate governance structure for commercial transactions, is an extremely important issue for organic producers. As they strive to maximize profits they must consider the revenue implications of Recebido em março de 2019. Aceito em julho de 2019.