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Transcript of Carolina%Local%Dining:% …ie.unc.edu/files/2016/03/carolina_dining_capstone_repor… · ·...
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ENST 698—Environmental Capstone Fall 2012
Carolina Local Dining: Challenges and Opportunities in Local Food Sourcing for the UNC Dining Halls
Claire Brown Nina Bryce
Jonathan Colgan Suzanne Fleishman Michael Harvey
ENST Capstone Class, Fall 2012
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Table of Contents
Executive Summary…………………………………………………………………………………………………...3
Acknowledgements……………………………………………………………………………………………………6
Introduction ............................................................................................................................................7 Purpose of Project ...................................................................................................................................................... 7 Carolina Dining Services and Local Purchasing ............................................................................................ 8 Project Need and Guiding Research Questions ............................................................................................ 12
Research Methods .............................................................................................................................. 13 Information Gathering ......................................................................................................................... 13 Construction of Survey .......................................................................................................................... 13 Grower Interviews ................................................................................................................................. 14 Quantitative Data Analysis .................................................................................................................. 14 Qualitative Data Analysis ..................................................................................................................... 14 Results…………………………………………………………………………………………………………………….15 Key Informant Interviews………………………………………………………………………………...…………………15 Survey Analysis………. ............................................................................................................................................. 19 Grower Interviews .................................................................................................................................................. 25 Limitations of Project ............................................................................................................................................ 27 Farm to Fork Impressions…………………………………...………………………………………………………………27
Discussion ............................................................................................................................................. 29
Recommendations ............................................................................................................................. 32 Table of Recommendations ................................................................................................................................. 32 Conclusion .................................................................................................................................................................. 35
Appendices ........................................................................................................................................... 36 A. CDS Questionnaire ........................................................................................................................................... 36 B. Farmer Survey .................................................................................................................................................. 38 C. Farmer Interview Guide ................................................................................................................................ 42 D. Farm-‐to-‐Fork Agenda ..................................................................................................................................... 43 E. Farm-‐to-‐Fork Handout ................................................................................................................................... 44 F. Farmer Interview Codes ................................................................................................................................ 46 References ……………………………………………………………………………………………………….………...47
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Executive Summary For Entire Final Report Please Visit:
http://www.ie.unc.edu/for_students/courses/capstone.cfm
Carolina Local Dining: Challenges and Opportunities in Local Food Sourcing for the UNC Dining Halls ENST 698—Environmental Capstone Fall 2012 C. Brown, N. Bryce, J. Colgan, S. Fleishman, and M. Harvey Introduction and background
In the past few years, Carolina Dining Services (CDS) has become increasingly interested in purchasing local food due to factors such as university initiatives, student interest, and national trends in the food service industry. Proponents of local food cite its potential for improved economic and environmental sustainability. Despite interest in local sourcing by CDS, it has proven difficult to forge these local partnerships. This process of food sourcing at UNC is complex, and involves other key players, namely 1) a contracted food service provider, Aramark and 2) distributors, such as Sysco and Freshpoint. This capstone project was developed through conversations between students and CDS with the overarching goals of identifying key factors in the feasibility of business partnerships between local farms and CDS. We particularly sought to better understand the interest from NC farmers in selling to UNC as well as the obstacles farmers face to forging institutional partnerships.
Methods The first portion of our research involved conducting interviews with key informants:, CDS, food service professionals, researchers, and other local food experts. We then designed an online survey and conducted interviews with farmers to obtain information about their perspective. Our Guiding Research Questions were:
• What is the 'ideal farmer' for CDS? • What is the ‘ideal customer’ for local growers? • What obstacles exist to local food sourcing at UNC from the perspective of CDS
and producers? Is there alignments/overlap between these two sets of obstacles?
• Which of those obstacles can be overcome and which are inherent to the institutional buying model and/or the contract between CDS and Aramark?
• What factors does a local food producer consider when deciding whether or not to sell food to UNC?
• What is the role of distributors/conglomerates in this supply chain?
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After conducting our survey and interviews, we held a Farm-‐to-‐Fork Forum at UNC in order to hone our understanding of our findings and help facilitate information flow and partnership between the relevant stakeholders. At the forum, we presented our findings and engaged in discussion with UNC affiliates, CDS, Sysco, area farmers, and other stakeholders. Findings Interviews with CDS informed the identification of critical parameters for partnering with area farms, including: Good Agricultural Practices (GAP) food safety certification, proof of insurance, payment logistics, high volumes of product, delivery logistics, price point, and seasonality. GAP certification was highlighted as an area that is especially of concern due to the complexity and high cost to farmers of this relatively new certification process.
One key finding from our farmer surveys and interviews is the high interest in selling to CDS; however, small farms (<75 Acres) are the most interested of any size. This is problematic because in comparison to medium or large farms, these farms are not the best equipped to conform to the parameters for partnership set by CDS and Aramark. Small farms do not produce high volumes of consistent product, cannot meet CDS delivery specifications, and do not have a high gross farm income that allows for capital investments in GAP, insurance, or scaling up production.
Another key finding was that intermediaries such as distributors, co-‐ops, or conglomerates could be critical to increasing local food at CDS. Due to the combination of strong interest from and significant challenges presented by small farms, using intermediaries could be essential. These parties play a unique role by providing CDS with needed volumes, providing farmers with support and shared costs, and creating ease in delivery and tracking. We found that locally based conglomerates or distributors have an additional advantage over larger, national distributors because 1) their model is specific to the types of farms in this area who are interested in partnership with CDS and 2) they uphold values and practices that align with the local food movement.
A final key finding was the importance of specifications by CDS of the specific items they want to buy locally, and the volume and price point for those items. Before intermediaries or farmers invest in higher production, GAP certification, or insurance for the purposes of selling to CDS, they want to be sure that the market is there and have clear sense what they should produce, how much of it they should plan to sell, and what they will be paid for it.
Recommendations As a result of our findings, we made several key recommendations. For a full breakdown of recommendations, including specific action items, please access the Final Report online at http://www.ie.unc.edu/for_students/courses/capstone.cfm
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Short-‐Term Recommendations Responsible Stakeholders
Increase outreach to local farms FLO, CDS, Distributors Strengthen partnerships with local food organizations and individuals
FLO, CDS
Strengthen relationships with current or past local partner farms
CDS
Connect farmers to resources to ease GAP process FLO and CDS, Distributors, Extension, Farmers
Gage student interest and demand for local food FLO
Incorporate seasonality in menu and diversify local food offerings
CDS
Medium-‐Term Recommendations Responsible Stakeholders Use 1.5.0. and Carolina Catering as small scale pilot for local growers to transition to CDS
FLO, CDS
Cite Aramark's existing commitment to “increasing level of sustainable food offers served by at least 5% each year.” 1
Auxiliary Services
Utilize existing conglomerate organizations that can provide support, shared costs, address volume and delivery challenges
FLO, CDS
Increase formalized academic involvement Curriculum in Environment and Ecology, Business School, Office of Sustainability, School of Public Health
Clarify market for local food at CDS CDS
Long-‐Term Recommendations Responsible Stakeholders Look to other Aramark Higher Education institutional local purchasing models (Elon, UNCW)
FLO food, future academic projects, Student Food Groups Across the State
Expand storage facilities (such as freezers) to increase capacity for local food storage
Future Capstone Projects, Office of Sustainability
Modify contract with food service provider to facilitate local food purchasing
Auxiliary Services, Office of Sustainability
Utilize non-‐undergraduate university affiliates for research and furthering local food goals
Triangle University Food Studies, Office of Sustainability
Acknowledgments We would like to thank all of the individuals and organizations that made this process possible: Carolina Dining Services, Survey and Interview Respondents, Key Informants, The Odum Institute, and Dr. Elizabeth Shay and Brian Miller. 1 Aramark Corporate Social Responsibility in Practice, January 2010
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Acknowledgements
We would like to thank all of the individuals and organizations that made this process possible:
Carolina Dining Services
Survey and Interview Respondents Key Informants
The Odum Institute Dr. Elizabeth Shay and Brian Miller
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Introduction Purpose of the Project
There is a growing interest in local food as an environmentally, socially, and economically sustainable choice. The “local foods movement” is inextricably tied with other food “movements”, including organic food, non-‐GMO food, food that is produced responsibly in terms of animal welfare, farm workers’ rights, and other considerations. For the purposes of this project, we try to isolate local food as much as possible, exploring it as a promising area to focus on in an effort to promote sustainable food. Local food is a growing industry, and North Carolina is a particularly well positioned to support a strong local foods movement with an estimated 200 farmers’ markets and an estimated 100 Community-‐Supported Agriculture programs (CSAs) (Curtis, 2010). Local food is a viable movement in North Carolina because of the state’s diversified agriculture, adaptable workforce, receptive consumer base, proximity between rural and urban areas, and an abundance of supportive educational and corporate partners. Local food can help strengthen the North Carolina economy, decrease the carbon footprint of the food we eat, and support positive health outcomes through access to fresh, healthy food. These are just a few of the reasons that local food proponents cite for strengthening the local food movement in North Carolina. In shifting the practices of food procurement in North Carolina, institutional food buyers have a lot of leverage. Institutional buyers such as universities and hospitals not only buy enormous volumes of food, but also have influence over the eating habits and perspectives of their customers. Local purchasing at the institutional scale can, therefore, create both direct and indirect change in the local food industry. One example of success in shifting institutional food budgets toward more sustainable purchasing is the Real Food Challenge (RFC), a national campaign for sustainable food on college campuses. Since 2008, students involved in the RFC network have worked with their campus dining services to secure $48.5 million worth of pledges to purchase more local, fair, sustainable, and humane food. One way this was achieved was through universities signing the Real Food Commitment, a pledge to buy 20% “real food” (defined by RFC) by the year 2020. State universities such as the University of California at Santa Cruz and the University of Vermont have signed the commitment, as well as private colleges including Wesleyan and Macalester.2 Institutional purchasing of local food holds great possibility, but it is certainly not without its challenges. A comprehensive analysis of local purchasing at the institutional scale conducted by the C.S. Mott Group for Sustainable Food Systems at Michigan State University, the Food Bank Council of Michigan and the Michigan Food Policy Council identified key challenges, including: distribution, processing, grading and sizing, packaging, seasonality, and volume. The report acknowledges that “food procurement procedures and menu planning strategies have become streamlined to a point that they are no longer flexible or based on local, seasonal food availability” and that “new interest in stricter food safety standards is trickling down through our dominant global supply chain” (George, 2 http://www.realfoodchallenge.org/campaign-successes
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Matts, & Schmidt, 2010). A nationwide survey by the Community Food Security Coalition that sought to assess the reasons why college campuses undertake sustainable food initiatives, as well as what colleges envision as the benefits of such programs, found that “supporting local farmers, community and/or economy” was the most commonly cited benefit, followed closely by “higher quality food” and “lower environmental impacts” (George, Matts, & Schmidt, 2010). The challenges found by this study are not restricted to Michigan State University and are common among universities nationwide.
This capstone project was developed through conversations between students and Carolina Dining Services (CDS) at the University of North Carolina (UNC) with the overarching goal of helping CDS and local farmers to establish successful business partnerships and to identify key factors that make it feasible or not feasible for them to do so. In short, we sought to first illuminate the key obstacles to institutional purchasing of local food, and then to articulate strategies for overcoming some of these obstacles. In doing so, we hoped to identify untapped opportunities and present research-‐based recommendations for local food buyers and sellers to utilize in business practices. Carolina Dining Services and Local Purchasing What is CDS?
Carolina Dining Services is in charge of residential dining, retail dining, convenience stores, athletic dining, and Carolina Catering (Treakle, 2008). UNC has contracted Aramark to manage all food related affairs on UNC’s campus, including employee hiring and purchasing. For this reason, all CDS affiliates except Scott Myers (the director of food and vending) are Aramark employees. CDS can be thought of as the on-‐site Aramark operation for UNC, with one non-‐Aramark Director.
Within terms circumscribed by Aramark’s contract with UNC (Aramark Educational Services, LLC, 2012), CDS makes purchasing decisions regarding the food served on campus based on budgetary constraints and pricing, food safety, nutrition, and other factors. Ultimately, CDS is accountable to their customers (i.e. students), and this accountability is formalized through their relationship with the UNC student dining board. The student dining board serves as a liaison between the student body and the university dining services, and consists of ten students and five university administrators. Their responsibilities “range from reviewing Carolina Dining's annual plan, which includes budgets, operating hours, and staffing needs, to assisting in the evaluation and selection of dining service contractors.” 3 CDS explained that student dining board menu decisions are largely “historically based,” meaning past demand and past sales of given items are used to predict future demand.
CDS primarily purchases produce and meat indirectly through distributors who help control for factors such as safety, volume, tracking, and storage. The primary distributor for CDS is Sysco, and their closest warehouse is in Selma, NC. Another distributor that CDS often uses is Freshpoint, whose closest warehouse is in Charlotte, NC. Only on occasion does CDS source meat or produce directly from farmers.
3 http://www.dining.unc.edu/StudentDiningBoard
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Food Safety and Liability Food safety and liability are vital considerations when sourcing local food. The food
supply at CDS includes large volumes and feeds thousands of students, and must be closely regulated. This involves protecting the producer-‐to-‐consumer pathway from tampering or bioterrorism, eliminating microbes and food-‐borne illnesses, and other considerations. Aramark is a food service provider that is very much aware of the strict liability that food purveyors face in cases of food-‐borne illness (Wrest, 2009, p. 104). Aramark’s typical supplier contract contains several specific processes and protocols that suppliers are required to follow in the course of producing and delivering food to Aramark (Aramark Educational Services, LLC, 2012). This degree of precaution is understandable in light of both the meaning of “strict liability” and the recent history of food injury lawsuits (Raloff, 2007).
One implication of Aramark’s risk-‐averse contractual terms is the prohibitively high cost of compliance that prospective suppliers face. For example, one important food safety measure required by CDS is that suppliers must be certified in Good Agricultural Practices (GAP).4 The GAP certification is viewed as proof of specific practices that help to ensure food safety (Moses, 2009, p. 1). The certification is slowly becoming a standard for large-‐scale purchasing and is required by most schools and governmental institutions (Moses, 2009, p. 1). This certification can be highly involved for farmers, especially if their enterprise is small or diverse. The GAP certification is complex and can include up to four levels of certification (Estrin, 2010, pp. 4-‐5) (Tocco, p. 2). Due to its centrality to the topic of food safety and liability at CDS, we provide a more detailed description of GAP below. Good Agricultural Practices In 1998, with growing concerns over food safety in the fresh produce sector,5 the USDA published a list of Good Agricultural Practices (GAP) aimed at minimizing microbial contamination on the farm level (Estrin, 2010, p. 4). These concerns were not trivial. According to the University of Kentucky Cooperative Extension service, “the number of outbreaks of foodborne diseases resulting from contaminated fresh produce . . . have doubled in the U.S. since 1987” (New Crop Opportunities Center, 2010, p. 1). Now, within the last decade, as a consequence of both this increase in incidences and the nature of product liability in the US (Wrest, 2009, p. 2), insurance companies have “begun paying out huge settlements to victims and their families.” (Raloff, 2007, p. 1) One question to ask is: has farming undergone any major change since 1987 that explains this increase of incidences? One report by the Midwest Organic and Sustainable Education Service suggests a correlation between this increase in incidences and increases in industrialization and centralization of the US food system over the same period (Moses, 2009, p. 1). This implies both that small, unindustrialized farmers—whose production role has remained relatively unchanged—have had little to no culpability for the increase in incidences and, hence, that the USDA’s issuance of GAP was hardly directed toward them. The downside to this 5 Food safety concerns and corresponding regulations had already been common for other food sectors for years—meat, seafood, dairy. This was the first time in US history that concerns over fresh produce safety gave rise to such a step toward standardization (Estrin, 2010, p. 4).
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implication is that, indeed, GAP as a certification is an ill-‐designed program for small farmers. Small farmers bear more cost for both the audit and ongoing compliance relative to larger farm operations (Woods & Thornsbury, 2005, p. 16).6 That is the first point to note.
The second point to mention about Good Agricultural Practices (GAP) is that there are, in a sense, two classes of GAP-‐adherent farmers, those certified and those not. This point is important to understand at the onset of any conversation about GAP, because the danger of not beginning here is that consumers could potentially conceive of GAP certification as a necessary prerequisite to the production of safe food; but the certification merely serves to confirm a farmer’s compliance with a set of best-‐practices that are largely based on common sense (Tocco, p. 1). Certainly, for a consumer concerned about food safety, the degree of deliberate care that GAP insists on at the farm level gives consumers good reason for optimism; but this optimism is warranted of any GAP-‐adherent farm’s produce, whether certified or not. We will expound upon this shortly, but for now, keep in mind that, because GAP-‐certified produce is not inherently safer, non-‐GAP-‐certified produce is not inherently less safe. Farmers are free to follow GAP whether they intend to become GAP-‐certified or not, and in likening the majority of GAP to common sense (Tocco, p. 1), the implication is that many farmers probably already operate pursuant to GAP. The third point regards the details of cost. What does it mean to say that GAP certification is expensive? For starters, here are some numbers: GAP auditors charge ninety-‐one dollars per hour for their time spent travelling to and auditing a farm, and auditors conduct at least two audits per year—once in the off-‐season and once during harvest (Moses, 2009, p. 2); because of the minuteness of detail GAP requires in record-‐keeping and the additional safety processes GAP may impose (i.e., safety training for all employees) (Tocco, pp. 1-‐2), the majority of the cost is ongoing rather than in the initial investment or in the audit cost (Estrin, 2010, p. 5). Further, GAP certification only requires an audit score of 80% or better to pass (Estrin, 2010, p. 6). So, farmers are free to take inventory of the various combinations of improvements that would yield a passing score and to then select the least expensive combination. For example, there is an almost proverbial story floating around conversations about GAP that recounts the plight of a farmer who failed his GAP audit when his dog jumped out of his truck and ran through a field of crops before the auditor’s eyes; the farmer, so the story goes, failed the audit immediately. To an audience unaware of the wiggle room that a passing score allows, this would portray GAP in an almost impossibly rigid light. However, taking what we know into account, we could only assume that if the dog-‐incident did in fact lead to a failed audit, then the farmer must have already accumulated enough point deductions to have been on the cusp of a failing score, and that the dog-‐incident was just one more deduction. So, passing a GAP audit is not impossible. Farmers are free to choose the best combination of compliance for their given resources. The last point to make about GAP regards its voluntary nature. No farmer is compelled by law to comply with GAP (Tocco, p. 1). However, buyers of farmers’ produce are free to impose it as a prerequisite to doing business with a given farmer. In other 6 Again, this is relative cost. Large farmer pay more absolute cost (Woods & Thornsbury, 2005, p. 10).
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words, the more buyers that require GAP certification of their farmers and the more share of purchasing power those buyers wield, the more the market will effectively mandate that farmers be GAP-‐certified. In a recent survey appearing in the journal Progressive Grocer, food safety is “the third most important challenge facing the retail industry. In fact, buyers ranked food safety as more important than attracting shoppers to produce or the quality of the product being sold” (Woods & Thornsbury, 2005, p. 3). So, many buyers already require food safety certifications like GAP, and CDS is one example of a buyer who mandates GAP in order for farmers to sell to it. A further point to mention is that the historical trend of government oversight of food safety suggests that the government could very well mandate GAP certification (Estrin, 2010, p. 4). In that case, farmers who are already GAP-‐certified would be ahead of the competition in terms of staying in business, much as farmers who are currently GAP-‐certified are ahead of non-‐GAP-‐certified competition in gaining access to GAP-‐mandating markets. Thus, for even the most frugal-‐minded farmer who has no intention of accessing these GAP-‐mandating markets, GAP certification is an investment to seriously consider.
Why Is CDS Interested in Local Food?
Local purchasing by CDS has increased over the past few years and reflects statewide trends (Curtis, 2010, p. 7). CDS adopts the definition of local purchasing as “purchasing within a 150-‐mile radius of campus.” (Shea, 2011, p. 20) In 2011, their purchases were 33% local, a 12% increase from the previous year (Shea, 2011). This number includes new contracts with local growers and products chosen from distributors, primarily Freshpoint. Government officials in North Carolina cite job development, greater food security, and reduction of carbon emissions as key reasons for supporting the movement to build a local food economy (North Carolina Department of Agriculture & Consumer Services, 2012).
The increase in local food purchasing by CDS is a response to administrative and student demand (Shea, 2011). Initial attention to sourcing locally began with UNC’s mission statement, particularly with its “component of sustainability.” In keeping with this component, the UNC Business and Finance office, at the behest the Office of Sustainability, asked CDS to buy food locally whenever possible. In practice, “whenever possible” can be interpreted as whenever the price of a local food is not significantly larger than its nonlocal counterpart.
Increase in local food on UNC’s campus has also been driven by student demand, which is only expected to increase in coming years. A student group called Fair Local Organic (FLO) Food formed in 2008 to focus on and promote sustainable food. One of their main goals is to shift the purchasing of food by CDS towards more fair, local, and organic products (Treakle, 2008). The pursuit of this objective has manifested itself in many ways, including student education and direct involvement with CDS through bi-‐weekly meetings and academic projects. Through various methods, FLO has been instrumental in gathering information on CDS’s behalf. FLO has also been the source of ideas for many of the local food initiatives that CDS has implemented. In the past few years, however, CDS has been increasingly taking charge of local sourcing independent of FLO.
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Project Need and Guiding Research Questions Despite increased interest in local partnership from CDS and student groups, more information was needed regarding the level of interest from NC farmers in such partnerships, and the obstacles to forging them. This information is central to effectively and efficiently establishing these potentially mutually beneficial relationships. In order to facilitate these partnerships, we identified the need for enhanced understanding of the demographics of potential local food sources and farmers’ current needs, priorities, and existing markets. We designed and implemented interviews and a survey in order to identify potential obstacles to local purchasing by CDS, gauge interest from growers, and assess the characteristics of NC farms that are relevant to establishing successful partnerships with CDS. The final component of the project was a Farm-‐to-‐Fork Forum at UNC to help facilitate information flow and partnership between the relevant stakeholders. At the forum, we presented findings of this report and our recommendations to UNC affiliates, CDS, and area farmers. We also held a free-‐form discussion where we fielded questions from attendees. Guiding Research Questions
Throughout the course of our project our research was guided by the following research questions:
• What obstacles exist to local food sourcing at UNC (on the buyer side and the seller side)? Is there alignments/overlap between these two sets of obstacles?
• Why do these obstacles exist? • Which of those obstacles can be overcome and which are inherent to the
institutional buying model and/or the contract between CDS and Aramark? • What factors does a local food producer consider when deciding whether or not
to sell food to UNC? • What is the 'ideal farmer' for CDS? • What is the “ideal customer” for local growers? • What is the role of distributors/conglomerates in this supply chain?
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Research Methods
Our project included several phases: information gathering (including literature review and key informant interviews), survey construction and distribution, grower interviews, and data analysis. Prior to the study, we completed an online Collaborative Institutional Training Initiative (CITI) program and obtained approval from the UNC Institutional Review Board (IRB). This board independently reviews research to be conducted on human subjects, including surveys and interviews. Information Gathering: Key Informant Interviews
The first phase of this project included gathering background information on obstacles to increasing the volume of local food in the dining hall, existing local foods programs at other institutions in North Carolina, and successful local foods programs through Aramark. After an initial meeting with CDS, we examined the Aramark Buyer Contract in order to identify specific requirements that may prove problematic. The results of this research informed the construction of a more in-‐depth semi-‐structured interview with CDS (Appendix A). The purpose of this interview was to gain a more specific understanding of the insurance and certification requirements for farmers interested in selling to the dining hall.
We also conducted key informant interviews with representatives from farming conglomerates, fellow researchers, extension services, and food distributors. These informants were selected based on their work in local sourcing and GAP certification as well as their roles in the food industry. These informal discussions probed for farmer perspectives on obstacles to selling to institutions and identified some of the work already being done on this issue. Construction of Survey
The survey was designed to gather information from a variety of farmers across the state regarding their attitudes towards selling to institutions and large distributors. It was also intended to identify the distribution and prevalence of farms that were good candidates for institutional purchasing. Lastly, the survey served as an outreach tool; growers were asked to provide their contact information if they wished to establish a connection with CDS. The questions for the survey were based on background research and the results of key informant interviews. An expert from the Odum Institute for Research in Social Science at UNC provided advice regarding survey design, including question order, wording, and format. Team advisors, Sysco representatives, a researcher at North Carolina State University (NCSU), and CDS representatives provided feedback on the appropriateness and relevance of the survey instrument.
The survey included multiple choice, short answer, and Likert scale questions (Appendix B). Many of the questions pertaining to demographics were borrowed with permission from a similar agricultural survey conducted by NCSU. The survey was designed to take less than fifteen minutes to complete. We implemented the survey in Qualtrics, and we distributed the survey via email through North Carolina extension agents. We decided to use extension agents because no inclusive database of North Carolina
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farmers could be identified. Because each county in North Carolina has one agricultural extension office, we determined that these offices would have the most complete information regarding farmer contact lists and therefore would be best positioned to forward our survey. The email format was used because the time sensitive nature of the project excluded the possibility of mailing the surveys and because the method of using extension agents as intermediary distributors would not be feasible with mail. Grower Interviews
Team members conducted semi-‐structured interviews with North Carolina growers and farming conglomerates in order to gather more in-‐depth information on the grower perspective. The process of identifying potential interviewees included contacting FreshPoint for a list of current growers, using the USDA web page to find growers with GAP certification, contacting current and former growers who sell directly to CDS, attending the Carrboro Farmers Market, and looking at web pages for the Durham and Raleigh (statewide) farmers markets. This process was meant to include respondents that varied widely in size, location within the state of North Carolina, product, certification status, and attitudes towards large distributors. The team identified 30 possible contacts for interviews, with an anticipated response rate of 66%.
Interviews were conducted in pairs on the phone and in person. The farmer interview guide included the questions from the farmer survey that were rephrased to be more open-‐ended (Appendix C). The format of the interviews allowed researchers to follow new lines of inquiry and probe for greater detail, and also enabled respondents to elaborate and speak candidly about their opinions. During each interview, one interviewer was responsible for asking questions and following up while the other interviewer was responsible for taking notes.
Discussions with other stakeholders (as described in the “Information Gathering” section) were distinct from the farmer interviews in that they were customized to the interviewee and generally covered a different range of topics related to the respondent’s line of work. For instance, members of the team visited Sysco’s Raleigh headquarters in Selma to gather information on Sysco’s process for communicating with farmers, distributing and storing food, and commitment to local food. Quantitative Data Analysis
We collected and analyzed survey data through the data management program Qualtrics. We interpreted results from questions of the survey in the context of background information in order to understand their significance. We cross-‐tabulated results from the survey and generated visuals using Microsoft Excel. Qualitative Data Analysis
We used an inductive method of analysis in order to identify common themes among farmer interviews. Three researchers independently read and coded each interview and then compared the results. The identification of similar threads among farmer narratives gave rise to a discussion of key issues faced by numerous interviewees. This information was then used to interpret the results of the quantitative survey data analysis, and informed the recommendations.
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Results Key Informant Interviews 1. Carolina Dining Services – Parameters and Obstacles to Local Purchasing The following parameters were identified by CDS as their own requirements for farmers to comply with for partnership. Each parameter creates its own obstacle for CDS partnership with local farms.
1. Good Agricultural Practices (GAP) certification: GAP is one of the requirements for local producers. The high cost of compliance with Aramark’s terms related to food safety and liability prevent many small suppliers from consideration as a local food source for CDS. Using Sysco as food provider relieves some of the food safety burden from CDS due to Sysco’s strong existing infrastructure for food safety and recall.
2. Proof of insurance: Farms are required by Aramark to have proof of insurance up to a certain level (examples ranged from $2 to 5 million) (Aramark Educational Services, LLC, 2012). Insurance can be extremely expensive, sometimes prohibitively so for small to medium-‐sized farmers.
3. Payment logistics: Many of the practices in the supply chain have been streamlined and standardized in ways that are not conducive to working directly with small farmers. Aramark pays Sysco seven days from the invoice date. The payment terms are agreed upon based on accounting periods. The Aramark office in Philadelphia is responsible for paying Sysco. Other suppliers get paid forty-‐five days from invoice (this is the industry standard, according to CDS). Aramark in Philadelphia cuts all checks to suppliers. Current source contracts are typically month-‐to-‐month contracts that may be terminated within thirty days (see sample CDS supplier contract). CDS requires distributor to buy back spoiled or otherwise unsatisfactory products; this is an industry standard.
4. Volume: CDS serves upwards of 10,000 meals a day in the cafeterias on campus. In order to make enough dishes from local product, the volume of individual products delivered must be sufficient. Small farms often cannot produce enough of one product to feasibly supply dining services on their own. CDS stated that examples of large-‐volume items that could make a significant difference in terms of local sourcing include mozzarella, canned tomatoes, and french fries. These value-‐added products are more difficult to trace than fresh produce as the products are often shipped from one state to another for processing. They also stated that proteins are the category of food that they buy the most of. 5. Delivery/physical logistics: CDS does not have the structure or storage to handle several small deliveries per day, as would be required with several contracts with several individual farmers. An 18-‐wheeler backs down the (very small) Lenoir dock.
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So, there are physical vehicle constraints. Additionally, given the relatively small size of CDS’s Lenoir offices, there are storage constraints. Currently, CDS is not set up to receive deliveries straight to the dock on campus. Because of the tight space, it is much easier to buy from Sysco, Freshpoint, and other distributors so that regular trucks can bring full orders. Although CDS does contract with a few individual farms (such as Cane Creek) and distributors (such as Mae’s Meats), their preference is to work with farmers through Sysco. Sysco currently delivers to CDS four days out of every week. CDS enjoys the convenience of online ordering capabilities offered by Sysco and electronic tracking of invoices. Also, orders for next-‐day delivery may be placed by 3:00 pm and add-‐ons are permitted until 5:00 pm. Much of this technological convenience—and, given the actual physical constraints CDS faces, even beyond convenience, the accommodation—has historically been lost when CDS has worked with smaller independent suppliers.
6. Price point: CDS prefers to buy a product locally as long as the price is equal to or not significantly higher than the price they currently pay. Local products are often cheaper in season: “You guys need to go to school during summer because of cheap produce.” Indeed, it is generally cheaper for Sysco (or seemingly any other buyer) to buy locally when produce is in season.7 CDS suggests that farmers utilize the state’s agricultural extension “best price consultation” service, which clues farmers in on the range of prices they might expect to get for their food products—a service possibly also available from NC Goodness Grows. CDS’s preferred process for determining the prices it will pay for a given farmer’s goods is for her/him to submit a bid sheet with the best prices the farmer is willing and able to offer CDS. 7. Seasonality: The best growing seasons in North Carolina are late spring through early fall. Unfortunately, the students who purchase from CDS are not present on campus in high numbers during peak growing season. Freshpoint has a growing chart that indicates the seasonal availabilities of various local food products. North Carolina agriculture specializes in a few items including tomatoes, sweet potatoes, and peanuts. CDS currently buys many local sweet potatoes. Though sweet potato fries are not as popular as regular french fries, they have grown in popularity since FLO suggested them as a possible outlet for increasing volume of local produce. Sweet potato fries tend to be featured on the menu more during “green theme meals” and other local events.
2. Audrey Kreske Dr. Audrey Kreske is a food safety researcher/expert at North Carolina State University. She is in the process of guiding twelve produce farms through the process of obtaining GAP certification. All of these farms are less than thirty acres. The purpose of meeting with Dr. Kreske was to gather information and to make sure that our survey would not merely replicate her existing work. Her expertise as a food scientist and her experience
7 Ibid.
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working with small-‐scale local growers meant that she was highly qualified to inform this project.
Dr. Kreske spoke to us about her experience with helping farmers obtain GAP, emphasizing that there is a large gray area between the USDA’s published manual on the certification and the actual auditing process. Furthermore, there are four separate levels of GAP certification that all lead to the same certificate.
Dr. Kreske cited disinterest and perceived lack of ability and funding as main barriers for small farmers. Currently, farmers are able to sell to many restaurants and farmers markets without obtaining the certification. The $91/hour fee, including driving time, required for auditors was also an issue for farmers.
She also mentioned that CSAs and wholesalers are beginning to require GAP certification for their members. Currently, Pilot Mountain Pride, Eastern Carolina Organics, and New River Organics all require evidence of transition towards GAP certification. 3. Center for Environmental Farming Systems
We spoke with someone who works with the Center for Environmental Farming Systems (CEFS) on their 10% Campaign, which encourages consumers to commit 10% of their existing food dollars to promote local food. This informant has extensive experience promoting local food purchasing in North Carolina.
When asked about institutional purchasing, our informant said that many businesses have been very supportive of the 10% Campaign. Other universities in the area, including NCSU and UNC-‐Wilmington, have joined the campaign. UNCW currently contracts with Aramark. The respondent also mentioned that Sysco was very excited at the beginning of the campaign and that Freshpoint has been supportive.
In order to facilitate GAP certification, CEFS is providing 40 farmers with the necessary funding. Their organization sees GAP as one of the biggest issues for small farmers in North Carolina because without GAP certification the market is increasingly restrictive.
Our informant recommended that dining services join the 10% Campaign so that their data could be included in CEFS’ research. This collaboration could facilitate connections between CDS and farmers. CEFS is “trying to be the glue that sticks it all together,” meaning they see themselves as being the facilitators in the burgeoning local foods movement in North Carolina. 4. Eastern Carolina Organics
We spoke with a senior staff member at Eastern Carolina Organics on October 2, 2012. Eastern Carolina Organics is a distributor for 50-‐60 farms in North Carolina. ECO was formed in 2004 to help transition tobacco farmers to organic produce. Their main markets include specialty grocery stores and universities. Our informant at ECO echoed Kreske’s concerns about farmers being skeptical towards GAP. The respondent recently attended an interest meeting with Lowe’s Foods and much of the presentation regarded GAP certification. This individual mentioned that GAP is especially challenging for smaller farms. ECO does not intend to require all of its producers to become GAP-‐certified. They are in the process of educating themselves about the
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process, but they currently cater largely to direct markets that do not require the certification. The respondent acknowledged that buying directly from the farmer is difficult for large-‐scale buyers who require large volume and reliability. This individual compared ECO with US Food Services, saying that because ECO represents smaller and fewer farms they are necessarily less consistent than large distributors. 5. Sysco
A few capstone team members, capstone advisors and CDS visited the Sysco warehouse in Selma, NC on November 6, 2012. The purpose of the trip was to learn more about how Sysco functions and what avenues there may be to work with them to increase local sourcing. The trip included a presentation by Sysco, tour of the warehouse, presentations by local farmers, and time for discussion. The Sysco presentation contained information on procurement, produce contracts, the Sysco brand, value-‐added strategy, food safety information (recall preparedness and traceability), GAP programs, and efforts to connect with local producers. The parameters of food safety assurance, volume control, distribution, and storage are especially appealing to CDS. Food safety removes liability issues. Sysco often picks up and delivers so it creates logistical ease; their storage conditions remove the logistical hurdles CDS faces as well. Another reason Sysco is appealing to CDS is that they have in the past held GAP workshops as well as helped to finance GAP certification for certain growers. Sysco also recognizes that GAP certification is a significant obstacle to increasing local purchasing by institutions. Someone at Sysco who works in sourcing expressed how that they had seen more demand from buyers for local product and more contact from local growers about availability. Despite witnessing these trends the respondent expressed that she needed to have a sure commitment from the buyer before putting efforts into connecting to a local source. CDS asked what this commitment would need to look like, but a clear answer was not given. The respondent also expressed desire to be connected with any possible local growers that would want to partner with them. A general impression expressed by CDS members was the surprise at how quickly Sysco has changed their approach to local purchasing, suggesting a significant market push. Our Sysco informant even stated that the conversations taking place about local sourcing and Sysco’s desire to source local product would not have taken place a few years ago. The local sourcing system is very new to Sysco and has not been well established, but the general sentiment of the visit was that their purchasing will increase – as long as CDS commits to buying it.
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Survey Data
Upon the closing of the survey on December 9th, 2012, 70 farmers had participated in the survey. Farms surveyed were from all over North Carolina, but counties with the highest response rates included Orange (n=10), Person (6), Buncombe (4), Guilford (4), Alamance (4), and Rutherford (4). The size of the farms played a significant role in determining responses as farms smaller than 75 acres comprised the vast majority of respondents (76%). Due to this skewing of the results towards small farms, many of the results were analyzed with normalization for very small farms (<5 acres), small farms (5-‐74 acres), medium farms (75-‐199), and large farms (200+ acres). Level of Interest in Partnership
Figure 1: Farm Size and Interest in Contact from CDS
Overall, interest in selling to CDS was very high, with 80% of respondents sharing
their business contact information with CDS (Figure 1). The large response from small farms to the survey meant that of those interested in selling to CDS, most comprised small (45%) or very small farms (29%). There was also strong interest from medium and large farms in sharing information, however far fewer of them chose to fill out information and share their information with CDS.
Not Interested 20%
Very Small 29%
Small 45%
Medium 6%
Large 15%
Interested 80%
Level of Farm Interest in Being Contacted for Partnership (by Size)
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Conglomerates
Figure 2: Farms participating in conglomerates broken down by size
Although many of the farms surveyed were small in size a vast majority (75%
overall) also do not identify as participating in a conglomerate of growers to sell their products. Of the small farms (5-‐74 acres), 50% participated in conglomerates (Figure 2). In contrast to this, there was far less participation in conglomerates among very small farms (26%) or medium farms (0%). Although all largefarms that answered this question (2) identified as selling through conglomerates, the small sample size does not allow for generalization.
0 1
0
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5
5
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1
14
6
6
0
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10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Less than 5 Acres
5-‐74 Acres
75-‐200 Acres
More than 200 Acres
Num
ber of Farms
Farms Participating in Conglomerates
No Conglomeration
Conglomeration with Growers of Different Product
Conglomeration with Growers of Same Product
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GAP Certification
Figure 3: GAP participation and participation in conglomerates
Of the farms surveyed, very few are GAP Certified or in transition to being GAP
certified (22%) (Figure 3). Furthermore, these farms were more likely to sell through a conglomerate (38%) than the total farms surveyed (25%). Of these farms with certification or transitioning, nearly all had an interest in selling to CDS (88%).
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of Farms
Farm Characteristics: GAP Certi_ication
Not GAP Certiuied
Transition to GAP
GAP Certiuied
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Market Choice
Figure 4: Market choice and reasons for choice
The market most chosen for primary or secondary sales was the farmers market
(Figure 4). Wholesale to distributors was also indicated as a significant market, while wholesale directly to groceries was least common. Profit was the reason most often indicated for choosing these markets for small and medium farms. Logistics were also considered by many of this farm size to be an important factor in market choice. However, with large farms, volume considerations were equally chosen as a primary reason for market choice. This indicates an increased focus on the scale of a potential market, rather than the profit it provides, for larger farms.
15 30
4 7 5 5 0
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Num
ber of Farms
Markets Farms Sold Through
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Primary Market
14 3 4
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2 5 1 1
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
5-‐74 Acres
75-‐200 Acres
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Primary Reason For Choosing Market
Other
Logistical Convenience
Volume
Transportation
Highest Prouit
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Seasonality
Figure 5: Variability of product available over the year
Farms that primarily produced meat, dairy, or value added products had product
consistently throughout the year; however farms that primarily vend produce have a significantly larger amount of product available for sale during the months from May to November (Figure 5). During the months of December to April, less than 80% of the farms surveyed have produce available for sale. The month of February has the lowest amount of farms with produce for sale, with only 30% of surveyed produce farms having product available.
0 5 10 15 20 25 30 35
Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Num
ber of Farms Surveyed
Months Farm has Product Available
Monthly Availability of Product
Produce Value Added Products
Meat Dairy
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Insurance Policy
. Figure 6: Amount of insurance policy, if held
Of the farmers surveyed, 31% have no insurance policy at all (Figure 6). Of those
that disclosed an insurance policy, more farmers (26%) held policies of $1 million than any other amount. The highest insurance policy value of $5 million was held by only three respondents (4% of those who disclosed value).
No Policy 31%
Yes, Value not Disclosed 21%
$300,000 2%
$500,000 1%
$1 Million 26%
$2 Million 9%
$4 Million 6%
$5 Million 4%
Yes 69%
Yes, Value Disclosed 48%
Farmers with Insurance Policy
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Grower Interviews
Through the process of coding our notes from farmer interviews (Appendix F), we have identified key themes that recurred and played central roles in the conversations. Largely, these interviews revealed a strong interest among farmers in scaling up and selling to an institutional buyer like CDS. Yet they also revealed key barriers, primarily regarding food safety requirements, uncertainty, and payment regularity. The most prevalent barrier discussed was food safety requirements, both GAP certification and liability, and insurance. Many informants were also deterred by a sense of uncertainty, feeling that the process of acquiring the necessary certifications and insurance to sell to CDS was ambiguous and contains within it many other unclear processes, including GAP certification but also uncertainty regarding volume of produce and mode of distribution. Another key barrier was payment regularity concerns. We found that 54% of farmers surveyed collect less than $50,000 in profit each year. The payment at CDS is often a 30-‐45 day delay from the time they receive the food until the farmer receives the check. For small-‐scale producers who depend on regular payments for monthly bills, this delay can cause significant financial strain. As the volume and price of an order increases, its significance relative to the farmer’s monthly income increases as well, which can cause significant financial strain for smaller farmers. Related to the issue of cash flow is the topic of seasonality; farmers’ yields are highest in summer, when CDS demand is lowest, and they are concerned about lost profit during that time. The stringent food safety requirements, uncertainty and risk in the process of CDS partnerships, and concerns about cash flow return from large institutional buyers are deterrents to farmers selling their products to CDS. The “ideal customer” described by multiple informants is one who is dependable, has the ability to pay farmers quickly, and communicates consistently with producers. Key concepts from interviews are enumerated below in further detail.
I. The liability risk/legal responsibility risk is daunting and insurance is expensive. • Due to Aramark’s stringent food safety requirements, farmers feel that
they would take on a significant legal risk/accountability. • Growers generally feel that that these requirements are absolutely
understandable considering the scale, but the requirements still pose significant financial barriers.
II. When other large buyers (e.g., Lowe’s Foods) ask for evidence of transition to GAP (rather than requiring GAP), it provides a more feasible way to start selling to them before the process is complete and incentivizes to finish the process.
• GAP is cumbersome and expensive, and not worthwhile worth it unless the market that requires it is reliable and attractive.
• Having a buyer invested in completion of GAP helps provide support during the process, which can lack uniformity or logic.
III. Producers have a strong interest in scaling up, identifying new markets, and expanding, but need assurance that the market is there.
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• Due to the shelf life of most farm products and the nature of the business, it’s vital to know a market is there before ramping up production.
• Many interviewees expressed a desire for an estimate of scale/quantity.
IV. There is a need for clear communication of requirements, expectations, and timeline at the outset.
• In order to plan ahead, financially and in terms of time allocated, it would be helpful for farmers to have a clear outline of the process of becoming a local seller to CDS.
V. High turnover in institutional buyer staff can present challenges for local farmers who want a long-‐term business relationship with CDS; there is a feeling of uncertainty regarding business communications.
• It can be confusing to know who to contact at CDS; a contract can be arranged with one person and then another person can take it on, or communication can come from multiple sources.
• Some interviewees felt that this perceived inconsistency contributes to slow-‐moving interactions and communications.
VI. Many farmers have an impression that when selling to CDS, things will move slowly. • There is often a feeling that the CDS staff members in Chapel Hill are part
of a much larger machine with many moving parts. • Some producers have experienced delays with Aramark. • Expected delays and time spent while waiting for Aramark responses
decreases the attractiveness of the market.
VII. There is a strong interest in using an aggregate/conglomerate and a perception that this might help expedite the process
• Farms that may not have the volume for CDS alone would appreciate the support of an intermediary that sells their product along with others in their region
• Many farmers indicated that they do not know of any conglomerates in there area but would be interested in forming/participating in one
VIII. Cash flow delay is a major concern when selling to a large buyer; farmers have a strong need for consistent payment
• Large orders are great for farmers, but often go hand-‐in-‐hand with delayed payment, which is especially challenging after assuming the costs associated with a large order
• Many farmers depend on rapid turnaround time and cannot accommodate the payment schedules of an institutional buyer
• Concern that payment time frame may not be negotiable if it is set at a corporate level
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IX. Farmers have challenges with seasonality • When NC produce is most abundant, CDS is serving less food; the market
shrinks during the summer and farmers must find alternative markets just for summer season.
• This can present a challenge to farmers who depend on a contract with CDS that involves large volumes.
Limitations of the Data The exploratory nature of this study has several limitations. First, our convenience sampling method is likely to have disproportionately selected for respondents who are interested in institutional partnerships. Moreover, this method excluded farmers who do not regularly use email. This means that the findings from this study cannot be generalized to the entire farming population of North Carolina, but only to those who are on particular email lists and chose to fill out the survey. Ideally this survey would have enabled a generalization of the data to the entire population of North Carolina to gain a comprehensive understanding of the market for institutional purchasing of locally produced food and an accurate estimate of how many growers are interested in selling to Carolina Dining Services. However, the parameters of the project and possibilities for farm contact limit comprehensive surveying.
Another limitation of the sampling is the focus on North Carolina farmers. According to the CDS definition of local, farms within 150 miles that lie in Virginia would be candidates for partnership as well. The relatively close proximity of the Virginia border means that farmers in southern portions of Virginia may actually be closer to Chapel Hill than farmers in the far southwest or southeast of North Carolina. This exclusion may have prevented contact with several possible candidates that would fit the qualifications for local partnership by CDS.
A final significant limitation of the study was the lack of investigation of how farms found the markets they currently sell to. If one of the main goals of the project was to help connect local farms to the market provided by CDS, it is important to understand how farmers find venues for their product. By understanding the mechanisms through which local growers find most of their markets, CDS would be able to reach out to these growers best. Inclusion of this topic in the survey or farmer interviews would have greatly helped to influence specific recommendations on farm outreach. Farm to Fork Impressions
On December 4th, we hosted a Farm to Fork Forum at Ram’s Head Dining Hall at UNC (Appendix D). We had between 35 and 40 attendees, comprised of local growers, distributors/conglomerates (including ECO and Sysco), university faculty, student representatives (including FLO Food and Student Dining Board members), interested community members, and CDS personnel. We presented our initial findings, offered information on GAP (Appendix E), and held a question-‐and-‐answer session and a
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discussion, which informed our recommendations and next steps. Key themes from the conversation at Farm to Fork were:
• There is a need for quantifiable evidence of student interest in local and/or sustainable food. CDS makes purchasing decisions based on the Aramark contract and on student demand. Data regarding the student demand would help drive change in local purchasing.
• Local food producers want to know what the market is (i.e., what percentage of the CDS budget is spent on local and what that amount is). CDS has multiple sources of these numbers, some more conservative than others.
• Farmers would like CDS to communicate which items they source locally on a
regular basis.
• Farmers feel that there is no “red phone” means of communication and that there is a chasm between producers and buyers at CDS
• There is interest in whether CDS can purchase food that comes from a GAP-‐certified
handler or whether all the individual growers must be GAP-‐certified as well. CDS said they would find out. This could make ECO a very promising source for local foods.
• One farmer in attendance was GAP-‐certified. She expressed that the level of GAP
certification depends on the buyer, and that it’s not uniform.
• Bon Appetit/Duke was brought up, and there is an ongoing question about how they deal with food safety risk. Are they just assuming more of the cost?
• Sysco did not publicize the resources they could offer (financial, trainings, etc.) to
support farmers through the GAP process, but it was clear from farmers that these resources would be helpful. How can this be facilitated? How could we explore other sources of support and/or funding (perhaps grants) for farmers seeking GAP certification?
• We discussed the turnover in both CSD personnel and in students as an impediment
to clear communication with local food producers.
• There was discussion of increasing seasonality in the menu at CDS, which might require a shift in student tastes (but this kind of shift was successful with sweet potatoes).
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Discussion As a result of our investigation, we were able to confirm that there is currently interest from both CDS and local food producers in increasing the amount of local food in the dining hall. However, issues of scale, financial risks, and clear communication hinder this mutual interest. CDS, farmers, and distributors share many of these obstacles. This discussion will trace the most prevalent obstacles that arose from the survey results and the interviews, and deconstruct these themes in order to explore ways to overcome them. One key issue that influences several other obstacles is that the type of farms interested in partnership often are not well equipped to fit the parameters set by Aramark or CDS. Due to the structure of the survey as an opportunity sample, having a large number of small farm and very small farm respondents suggests that there is an increased interest from this size of farm in comparison to larger farms. Furthermore, farms of this size expressed the highest interest in sharing their information with CDS. The survey and interview results showed that small-‐scale producers are often the most enthusiastic about the possibility of partnership, especially since this can mean scaling up. Due to the high interest from this size farm, much of our discussion deals specifically with obstacles to small farms.
The most obvious concerns with partnership between small farms and CDS are those of scale. Independent of a small farm having the ability to deliver directly, CDS needs high-‐volume, consistent product in as few shipments as possible. The survey confirmed that the season-‐dependent availability of produce in North Carolina exacerbates these volume concerns since product is even less available while classes are in session. Furthermore, the interviews brought to attention how, on the farmer side of this issue, there is the need for a summer market to make up for product CDS cannot purchase during this time. This means that in order for small farms to partner, there must be a manner to aggregate their product through a distributor or conglomerate to provide for volume, logistical, or seasonal controls.
Reasons for market choice and financial risk are other major obstacles in terms of small farm partnership. The survey indicates that many small producers are choosing to sell at farmers markets due to the increased profits they provide. This suggests that these farms would change markets as long as CDS will pay for it. However, price is a large factor for CDS as well. Because the meal plan is optional for students, the price of a meal plan must remain reasonable in order to maintain sales and retain customers one semester to the next. This means that CDS cannot pay much extra for local food; local produce can only be purchased in large volumes if it is priced competitively with non-‐local produce.
In contrast to the idea that farmers markets are a desired choice, a key informant hypothesized that the prevalence of roadside stands and farmers markets in North Carolina is a result of lack of access to broader markets for small-‐scale producers. Further supporting evidence of this idea is that the farmers we interviewed expressed an interest in scaling up and that those who had been in talks with CDS were accepting of their proposed prices. The implications of these two key findings are that although increasing the price CDS is willing to pay may help in incorporating more food, there are larger financial risks preventing farmers from partnership that, if overcome, can create an alternative option that does not require an infeasible price point.
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The financial risk to farmers in trying out markets like CDS primarily regards GAP certification, insurance, and increasing production. Of the small farms surveyed, very few held GAP certifications or adequate insurance. Interview conversations provided insight into how much of the financial risk in partnership is placed upon the producer. Small-‐scale producers are often not in a position to commit to increasing labor and capital input without knowing they can sell the product. However, many buyers require GAP certification and insurance before purchase. This puts the small farmer in a high-‐risk situation: (s)he must invest in GAP certification and insurance the year before (s)he sells to a large buyer, so (s)he must take on the cost of the certification, insurance, and scaling up far in advance of when the income from the new market comes through. One model for mitigating this issue is used by Lowe’s Foods; they ask that farmers prove that they are transitioning to GAP while also guaranteeing a market for increased volume.
Many of our findings from interviews, surveys, and conversations point to the critical role of intermediaries between CDS and farms in terms of finding and aggregating farms, delivery and tracking, and decreasing financial risks. Carolina Dining Services does not have the time or resources for finding a high number of individual farms for CDS to partner with. Sysco is interested in increasing local purchases and is aware of the increase in demand. CDS receives a weekly list of local options from Freshpoint, a subsidiary of Sysco. However, turnover in Sysco personnel, loyalty to existing business relationships with producers, and the fact that outreach to local producers is not explicitly required in any job description means that Sysco is not in contact with all potential North Carolina producers who are willing to work with a large distributor. Furthermore, Sysco must cater to the preferences of customers who may have very specific expectations about the color, shape, and flavor of certain products. This means that selling North Carolina lettuce is more difficult than selling California lettuce because many consumers are used to the appearance and taste of California lettuce. Sysco can only consistently buy product that can consistently be sold. Conversations with Sysco revealed that large-‐scale distributors may be able to help with volume and delivery concerns, but they require farmers to clean their own vegetables and have strict standards concerning vegetable size and shape, which is problematic for farms with few employees.
Another model is the formation of local farming conglomerates that help facilitate sales and amass volume from a variety of small farms. The emergence of conglomerations such as Pilot Mountain Pride and Eastern Carolina Organics is helping to bridge the gap. The locality and small scale of these organizations allows them to specialize in working with small-‐scale farms like those interested in selling to CDS. Furthermore, this quality allows for consistency with the ideals of buying from local farms by purchasing through a local intermediary. Furthermore, the specification of these organizations allows for particular attention to the obstacles small farms face. For example, Pilot Mountain Pride partners with a nearby university to acquire grant money for GAP certification, thus mitigating some of the financial strains on small-‐scale farmers. Farmhand Foods, a meat distributor, is helping to create a market for sustainable meat in the area and therefore many farmers are able to increase their production of free-‐range meat because of the guaranteed sale. These conglomerations are in a unique position to act as intermediaries between large-‐scale buyers and small-‐scale farmers because they can collect product from a wide variety of farms, store the product, and distribute it. Small-‐scale interviewees expressed interest in joining conglomerates of this type, but these conglomerations often
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form based on location and do not yet encompass the entire state. Conglomerates do not resolve all barriers by any means, but they are certainly an attractive model for small or mid-‐sized farmers, and our interviews indicated a need for more conglomerates throughout North Carolina. Although many of the enumerated obstacles are not specific to small farms, survey data included few (24%) respondents from medium (75-‐199 acres) or large (greater than 200 acres) farms. In comparison to agricultural census data, it is evident that there are a large number of farms of this size in North Carolina, so this cannot be the reason for the lack of response.8 There are many possible explanations for this disconnect; perhaps producers of this size have already found sufficient markets for their product or were left out of the convenience sample. This in itself presents an obstacle, because medium-‐scale producers have less obstacles to overcome in selling to CDS or Sysco. Their size allows for higher volume sales that can meet the needs of CDS. Furthermore, decreased interest in choosing a market due to profit coupled with a higher gross farm income mean that farms of this scale are much more likely to be able to handle the financial risks involved in certifications and insurance. Many of the large-‐scale farmers interviewed sold their product to a wide variety of distributors and buyers across the nation. When asked about increasing local sales, most large-‐scale farmers expressed interest. Selling in North Carolina is beneficial for farmers; interview respondents expressed that they believe that it minimizes food safety risk (due to a shorter distance between producer and consumer), has lower transportation costs, and supports the local economy. Product can be delivered quickly, lengthening the shelf life of any given delivery. However, many sales decisions are based on long-‐standing relationships with buyers, and large-‐scale farmers are not willing to terminate relationships with loyal buyers in the interest of increasing local sales.
Beyond the obstacles specific to farm size, there is one significant concern independent of farm size or role as intermediary. This concern is exactly what market CDS is offering in terms of volume and type of product. Both a large-‐scale distributor and a small-‐scale distributor vocalized a need to know exactly how much local food CDS is buying and what their long-‐term commitment to local purchasing is. Like farmers, these intermediaries are hesitant to explore this new market and scale up without more information on its security. Furthermore, both intermediaries and farmers expressed the need for a clear communication and a streamlined process in order to establish trust in a business partnership. Clear communication and intent to purchase will be necessary for partnerships to be comfortably established.
8 http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/County_Profiles/North_Carolina/cp99037.pdf
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Recommendations
Based on our findings, we have developed recommendations for ways to improve the feasibility and ease of sourcing local foods to the UNC dining halls. Our recommendations are divided into short-‐term, medium-‐term, and long-‐term solutions. These recommendations are also associated with specific action items that are grouped by which stakeholder would implement the recommended action. The stakeholders include CDS, Sysco, Aramark, FLO Food, farmers, farmer conglomerates, future capstone students, and interns.
Short-‐Term Recommendations
Action Items Responsible Stakeholders
Increase outreach to local farms
Host local foods "round table" events and future forums
FLO
Create partnership resource guide for farmers to access online and clarify specific GAP requirements such as level and role of certifiable handlers
CDS
Pressure Sysco, Freshpoint, and other distributors to incorporate more local farms
CDS
Strengthen partnerships with local food organizations and individuals
Incorporate local foods experts and advocates into FLO-‐CDS meetings
FLO
Create point of contact with the 10% Campaign, Local Foods Supply Chain Project
FLO and CDS
Strengthen relationships with current or past local partner farms
Make points of contact clear regarding business transactions
CDS
Set up explicit payment timelines and tracking
CDS
Connect farmers to resources to ease GAP process
Connect interested parties or Farmers with Audrey Kreske or Extension Agents
FLO and CDS
Hold trainings regarding GAP process Distributors, Extension Utilize existing resources for GAP certification
Farmers
Look at other GAP requirement models (such as Lowe's Food's evidence of transition model)
Sysco or Freshpoint
Gauge student interest and demand for local food
Create and send out student survey FLO
Incorporate seasonality in menu and diversify local food offerings
Use green theme meals as an opportunity to gauge student tastes for unfamiliar local foods
CDS
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Medium-‐Term Recommendations
Action Items Responsible Stakeholders
Use 1.5.0. and Carolina Catering as small-‐scale pilot for local growers to transition to CDS
Work with chef of 1.5.0. and Carolina Catering
FLO
Publicize to farmers other models for selling to CDS
CDS
Cite Aramark's existing commitment to “increasing level of sustainable food offers served by at least 5% each year” (Aramark, 2010).
Communicate to corporate Aramark the need for streamlined way to facilitate these local partnerships
Auxiliary Services
Utilize existing conglomerate organizations that can provide support, shared costs, address volume and delivery challenges
Keep tabs on existing conglomerates and propose new options as they arrive
FLO
Increase communication with ECO, Farmhand Foods, and Pilot Mountain Pride
CDS
Increase formalized academic involvement
Increase number of internships and independent studies
Curriculum for Environment and Ecology , Business School, Office of Sustainability, School of Public Health
Clarify market for local food at CDS
Include specific food items, budget, and volume desired by CDS
CDS
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Long-‐Term Recommendations
Action Items Responsible Stakeholders
Look to other Aramark Higher Education institutional local purchasing models (Elon, UNCW)
Coordinate visits and meetings with CDS and student food groups at other universities
FLO food, future academic projects
Coordinate NC Aramark Dining Services Forum
Student Food Groups Across the State
Expand storage facilities (such as freezers) to increase capacity for local food storage
Research possibilities for construction, budget, and other considerations
Future Capstone Projects, Office of Sustainability
Modify contract with food service provider to facilitate local food purchasing
Create higher percentage of local food purchasing requirements
Auxiliary Services, Office of Sustainability
Make processes better suited for local, small, or medium food producers
Auxiliary Services
Utilize non-‐undergraduate university affiliates for research and furthering local food goals
Increase graduate student involvement Triangle University Food Studies
Increase long-‐term office of sustainability involvement
Office of Sustainability
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Conclusions In the course of our research, we used key informant interviews, a farmer survey, and farmer interviews to construct a cohesive account of obstacles and parameters of partnership between Carolina Dining Services and North Carolina farms. We also explored the vital roles of stakeholders, including students, Sysco, locally based distributors and intermediaries, Aramark Corporate, and others. We found that all parties have a high interest in partnership, however there are several obstacles to forming partnerships. Many of the obstacles faced by CDS are parallel to the obstacles faced by local food producers. This leads us to believe that there is fertile ground for collaboration and cooperation between the two parties to overcome these issues. We highly recommend that future efforts consider the integral role of intermediaries, the importance of collaboration with other local food initiatives, and the need for clear communication of projected demand for local products.
The effectiveness of this project will be measured by efforts to reduce ambiguities surrounding these obstacles and opportunities to local sourcing at UNC. The best indicator for which we can hope is to see CDS continue to increase its local food purchases year-‐to-‐year and for the process to be streamlined. We acknowledge that there is still much to be done in this vein of research on behalf of CDS and local food producers, more nuance to uncover, and greater depths to illuminate. But the subject of this research matters greatly to us. So, we invite future researchers to carry the torch, and to use our efforts as the spark for new questions and further research.
With the conclusion of this semester’s research project, we hope to see conversation continued by entities like FLO and the UNC Sustainability Office, to see our recommendations carefully considered by CDS in particular, and to see further research picking up where we stopped. Possibilities for future research include 1) gathering data to reflect student demand, 2) clarifying the GAP process for farmers and connecting them with grants, training resources, and supportive buyers to make GAP certification feasible for them, and 3) providing a thorough exploration of other university institutional buyers who use the Aramark contract and source locally. We hope to see CDS and potential local suppliers capitalize on the opportunities we have articulated in order to transact mutually profitable arrangements on a local scale.
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Appendices Appendix A. CDS Questionnaire
Purpose: The purpose of this questionnaire is to gather information with which a formal local source survey may be written. Hence, conduction this CDS questionnaire is essential before the local food capstone team can proceed to writing the local source survey.
Format: This questionnaire asks questions designed to inform the local food capstone team of which questions to ask in the local source survey. In other words, it will ensure that all the information that CDS deems necessary to know is collected. This section’s subsidiary parts regard what CDS currently buys from its sources, how CDS logistically facilitates those purchase decisions, and why CDS makes the decisions it makes. The second section (“The Opportunity”) asks questions designed to define CDS’s motivations, anticipated benefits, and potential obstacles for sourcing more of its food locally, information probably necessary to consider both in conducting the local farmer survey and proceeding with the project generally. “The Opportunity” section follows the model of a SWOT analysis (strengths, weaknesses, opportunities, and threats), a model with which most businesses and business managers are familiar. The local food capstone team considers its partnership with CDS to be based on its role in researching one particular SWOT opportunity: sourcing more local food. This section’s subsidiary parts are intended to define the opportunity, state anticipated impacts for CDS if the opportunity were satisfactorily realized, and highlight potential obstacles to the opportunity. With CDS’s answers to these questions in hand, the local food capstone team would feel confident in drafting a local farmer survey that sufficiently serves CDS’s interests.
[Section 1] “CDS Today”
1. Current Source Purchases a. What goods/products is CDS currently purchasing (i.e. list of particular
products)? b. What goods is CDS currently purchasing locally? c. What are CDS’s top ten most commonly purchased goods? d. What is the volume of each given good/product CDS currently purchases
(How many pounds, crates, etc.)? Does that vary seasonally, and if so, to what extent?
e. What is your price point for each good/product (i.e. just a list of prices and products)? Does that price point vary relative to market conditions?
f. We are interested in being able to contrast the size of CDS’s current source purchase area against the size of a targeted local source purchase area. With
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this in mind, what approximately—in miles, states, or countries—is the radial size of your current source purchase area)?
2. Logistics of Current Source Purchases a. How does CDS prefer to take deliveries (a short narrative tracking food from
distributor to CDS kitchen would be instructive)? b. Is there a preferred frequency or schedule based on different goods (i.e. leafy
greens vs. beef)? Preferred time of day? c. What payment options are available? Which do you currently use? d. Duration of current source contracts? e. Does CDS require distributor to buy back spoiled or otherwise unsatisfactory
products? 3. Factors Explaining Current Source Purchases
a. What factors determine the “Current Source” situation (specifically, the particular arrangements CDS has)?
b. What factors determine the “Logistics of Current” situation (specifically, the particular arrangements CDS has)?
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Appendix B. Farmer Survey Instrument
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Appendix C. Farmer Interview Guide
The purpose of this research is to gather information on the general climate for partnership between farms in North Carolina and Carolina Dining Services as well as to identify Farms or conglomerates for possible partnership. This interview will take approximately 15-‐30 minutes to complete. Your participation is completely voluntary, and the information you provide will be kept confidential. Results will be reported only in aggregate form; your contact information will only be disclosed if you indicate on the form. Do you consent to participate in this research? 1) What is your current market (where, how, and to whom you sell your products) and
why? a) If necessary, probe for the relevance of the following factors: price; convenience;
consistency b) Which of these factors is of greatest importance to you?
2) How do you set your price points? 3) Do you sell locally, regionally, or nationally?
a) What is your experience with or impression of these different scales? 4) What certifications do you have?
a) Why did you pursue each of those certifications? 5) What barriers are there to pursuing other certifications? 6) How do you get information about certifications? 7) Do you have GAP certification?
a) If you have it, which level/type do you have? Why did you pursue it? If you do not, why not? What is your impression of GAP certification?
8) Have you ever sold your product to an institution? a) Why or why not?
9) Would you be interested in selling to an institution like UNC? a) Why or why not?
10) What is your impression of large-‐scale distributors? 11) Would you consider selling to a distributor like Sysco?
a) Why or why not? 12) Are you involved in any conglomerates of farmers that sell their products together?
a) If not, are you interested in becoming part of a one? b) How do you view conglomerates compared to distributors?
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Appendix D. Farm to Fork Agenda
Farm to Fork Forum: UNC Capstone Project Presentation
Tuesday, December 4, 2012, 4:00pm
The End Zone at Rams Head Dining Hall, Chapel Hill, NC
A project by UNC-Chapel Hill undergraduates with support from Carolina Dining Services
Welcome and Introduction to Capstone - Brian Miller Introductions Carolina Dining Services - Suzanne Fleishman Guests - Nina Bryce Presentation - Capstone Team Q&A session and General Discussion - Claire Brown Breakout Discussions and Networking
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Appendix E. Farm-‐to-‐Fork GAP Handout
UNC Farm-‐to-‐Fork Fall 2012
Facts for Farmers Curious about GAP: • GAP is a voluntary certification, however . . .
o Certain markets effectively mandate it. o Future legislation could still mandate it.
• There is no single GAP certification. o Different retailers require different ones. o So, it is important to ask what your retailer requires.
• GAP standards cover 4 areas of the farm-‐level supply chain. o Soil à animals and manure. o Hands à personnel hygiene and proper facilities. o Water à potable water OR pathogen-‐free water. o Surfaces à processing areas and related equipment.
• Official aim: to prevent microbial contamination. o Preventative rather than curative (recall Ben Franklin). o Process-‐driven standards rather than outcome-‐driven
• A good place to begin: write a GAP manual. o It is free to do so, and the process is self-‐educational. o Tool to use: http://intranet.primuslabs.com/igap/
• Educate yourself about GAP’s application on your farm. o Utilize your local extension agent. o Offer your farm for a university research case study.
• How much does GAP cost? o Auditors charge $91 per hour. o Bulk of cost is with record-‐keeping and compliance. o Initial capital investment and ongoing operating cost. o Makes sense to annualize estimates over a decade.
[See backside for two GAP cost estimates, one low and one high.]
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Source: Estrin, H. (2010). Here Comes GAP Certification!: The inside story of a Vermont farmer going for USDA GAP certification. Burlington, VT: UVM Extension.
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Appendix F: Interview Codes
Ø need diversified markets
Ø percentage quota for local
Ø large volumes
Ø cash flow delay
Ø ideal customer would call and ask what we have in stock and then buy it
Ø high turnover in institutional buyer staff (CDS) is confusing
Ø lots of hoops to jump through for big buyers
Ø evidence of transition to GAP
Ø cumbersome and expensive (GAP)
Ø can’t raise crop w/o guaranteed sale
Ø lack of uniformity to GAP process
Ø interest in selling to institution, but would need to know the demand
Ø ideal customer: dependable, not picky, pay you quickly,
Ø risk
Ø liability
Ø seasonality
Ø communication
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References Aramark. (2010). Corporate Social Responsibility in Practice. Aramark. Aramark Educational Services, LLC. (2012). Supplier Agreement. 377960(3). Philadelphia. Chibnik, M. (2011). Risk, Uncertainty, and Decision Making. In M. Chibnik, Anthropology,
Economics, and Choice. Austin: University of Texas Press. Curtis, J. (2010). From Farm to Fork: A Guide to Building North Carolina’s Sustainable Local
Food Economy. Raleigh, NC: Center for Environmental Farming Systems. Estrin, H. (2010). Here Comes GAP Certification!: The inside story of a Vermont farmer going
for USDA GAP certification. Burlington, VT: UVM Extension. George, V., Matts, C., & Schmidt, S. (2010). Institutional Food Purchasing: Michigan Good
Food Work Group Report No. 3 of 5. East Lansing, Michigan: C.S. Mott Group for Sustainable Food Systems at Michigan State University.
Moses. (2009, June). GAPs: Bringing Good Agricultural Practices to Your Farm. Spring Valley, WI: Midwest Organic and Sustainable Education Service (MOSES).
New Crop Opportunities Center. (2010). Good Agricultural Practices (GAP). Lexington, KY: University of Kentucky College of Agriculture Cooperative Extension Service.
North Carolina Department of Agriculture & Consumer Services. (2012, November 1). North Carolina Sustainable Local Food Advisory Council. Retrieved from http://www.ncagr.gov/localfood/
Raloff, J. (2007). Lettuce Liability. Science News, 172(12/01/2007). Shea, C. (2011). 2011 Campus Sustainability Report. Chapel Hill, NC: UNC Sustainability
Office. South Carolina Food Policy Council. (2011). Farm to School and Beyond. Columbia, SC: State
of South Carolina Department of Agriculture. Tocco, P. (n.d.). GAPs on Your Farm. Lansing, MI: MSU. Treakle, J. (2008). FLO Guide to CDS. Chapel Hill: FLO. USDA. (2007). 2007 Census of Agriculture. Washington, D.C.: USDA. Wilkins, J. L. (2005). Eating right here: Moving from consumer to food citizen. Agriculture
and Human Values, 22, 269-‐273. Woods, M., & Thornsbury, S. (2005). Costs of Adopting Good Agricultural Practices (GAPs)
to Ensure Food Safety in Fresh Strawberries. Agricultural Economics Report, 1-‐20. Wrest, A. D. (2009). Buyer Beware: The Liability Gap Created by Tribal Farming. San
Joaquin Agricultural Law Review, 103-‐126. Please direct all follow-up questions and inquiries to: [email protected] The final report will be available at: http://www.ie.unc.edu/for_students/courses/capstone.cfm