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New food hub formation gets discussed

By JANE PRIMERANO
AFP Correspondent

HARDYSTON TOWNSHIP — (Feb. 1, 2016) — Is northwest New Jersey in need of a food hub or small farm incubator?
The answer to that is still up in the air, but the Foodshed Alliance is sponsoring information sessions in an effort to determine if there are enough farmers to support the effort.
Jim Thaller is the senior agri-business developer at the World Bank and has set up ventures in Africa, Central Asia, South America and the Caribbean.
He introduced the concept of food hubs and food incubators to a crowd of about 50 people at Crystal Springs Lodge.
Noting that northwest Jersey is historically an agricultural community, Thaller said, now the challenge is to keep small scale farmers healthy, to keep them competitive in the marketplace.
Regardless of where they are, Thaller pointed out, all small-scale farmers struggle. They need access to markets, sources of fertilizer and other products and, often, access to value added products that boost their sales. Many farmers have the technical skills required for their farms, but lack knowledge about the industry in general.
Thaller explained the difference between a food hub and an incubator.
A food hub is a collective of farmers to assist them in distributing their products. It provides them with needed skills, but it doesn’t deal with value-added products. A food incubator is a more elaborate model providing more opportunities for farmers to come together and succeed.
Thaller said it must be based on a profit model. Rutgers University has a food incubator but those that are run by universities are less effective because universities do it as a service to farmers, rather than a profit center, which is essential for the farmers.
The United Nations has more than 1,700 incubators in its network.
Through this network, Thaller has learned they must be profit-driven, they can’t be funded through a university or a non-governmental organization.
In order to start a food incubator in Northwest Jersey, Thaller said, farmers must figure out what it is they need and how an incubator can provide those services.
Among the services are assistance with sales, marketing, branding, production, warehousing, management, financial management, networking and technical training.
“The first thing farmers ask for is money,” Thaller said, “but they don’t need money to grow, they need sales expertise.”
He noted there are a number of options to create revenue for those who start the incubator.
His favorite is the royalty option because the sponsors receive their money based on a percentage of the growth of the farmers.
The investors may also take equity in the farms, or take a fee from the farmers or set up a combination of these models.
It takes about two years to get a food incubator started.
The first step is a feasibility study which is what the Foodshed Alliance is doing now.
The Crystal Springs meeting is the first in what will be a number of information sessions, Foodshed Alliance Executive Director Kendrya Close said.
After an initial study of the area, Thaller said, comes the “deep dive.” “We need to find out everything before we can go for broke,” he added.
“I don’t like giving out money,” he joked, but farming has a fluctuating profit margin so farmers need cash up front.
“The value of a food incubator is that by bringing farmers together for sourcing materials and selling products the risk to farmers is minimized.
“One of the impediments to starting a food incubator is the demographics of the farming community. “It’s a young, hungry model,” Thaller told a room full of largely middle-aged farmers.
On the way out, Roman Osadca, a garlic farmer and beekeeper from Johnsonburg who is a retired chemist, noted once he put his age on the questionnaire “they aren’t interested in me.”
Thaller also isn’t sure the sheer numbers of farmers in Northwest Jersey would allow for a food incubator, but more information sessions would show how many farmers are interested.
Kenesha Reynolds-Allie, Warren County agricultural agent, expressed the same views about numbers of farmers.
“A lot of details need to be addressed,” she said. “I know New Jersey, we have very small farms, it’s different than most other places. What will tell is volume. It will take a lot of farmers.”
Close said another information session will be scheduled in the near future.