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Farmers' market boom leads to some busts

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Saturday, September 01, 2007

FarmersMarket1.jpg The Market Economy

There’s been an explosion of farmers’ markets around the state, and with it a casualty list. Can there be too much of a good thing?

By Robin Doussard

The Saturday Portland Farmers’ Market at Portland State University long ago morphed from a nice vegetable stand to a food theme park (special attraction: attack of the locavores). During the peak months, the hordes hit early: 15,000 people sweep through the free-range eggplant and local blackberries like locusts in a cornfield. By mid-morning, it’s elbow to elbow at the 140 vendor stalls and if you haven’t already snagged your wild salmon, you’re probably out of luck. But with the fiddlers fiddling and the handmade artisan sausages grilling, who cares?

It’s a crowded, festive scene that plays out at farmers’ markets from Hood River to Grants Pass to Beaverton. Farmers markets in Oregon have grown from 10 in the early 1990s to at last count 86. The Portland metro area alone has 37. From June to September, about 120,000 Oregonians shop weekly at a farmers’ market, business worth $25 million in sales in 2006 to local farmers and purveyors. Nationally, there are 3,700 farmers’ markets, 2,000 of which have opened in the past decade.

Farmer’s markets have steadily grown in the past decade, fueled by a surge of interest in local agriculture and food production, often called “civic agriculture” because of the link between local food and a community’s social and economic development. But despite their popularity, markets are not simple enterprises and success is not a sure thing. They are a complicated mix of business, community and nonprofit purposes in a unique retail environment and they are highly susceptible to failure.

“Farmers’ markets are a weird combination of business-world things and community service things,” says Garry Stephenson, an Oregon State University small-farms expert.

Masked by the continued net growth in numbers, markets are more fragile than anyone knew. Stephenson and OSU colleagues Larry Lev and Linda Brewer have been studying farmers’ markets for a decade. They found that from 1998-2005, 62 new markets opened across the state, but 32 closed. The failed markets were young markets: 15 closed in their first year, and 30 had closed by their fourth year.

Every success story has its downside, and Oregon’s storied farmers’ markets are no exception.

THERE ARE NO REGULATIONS on what constitutes a farmers’ market in Oregon. Each market makes its own decision about what to sell, who can sell, how far away the food can come from and where to locate. In addition, Oregon’s markets are funded mostly by farmers’ fees and most budgets are minimal. In contrast, California requires that its more than 360 farmers’ markets be certified by the state and conform to a long list of requirements.

“People come into markets from an idealist standpoint. They aren’t as practical as they should be,” says Dianne Stefani-Ruff, the outgoing executive director of the Portland Farmers’ Market. “It is a business.”

The OSU research found that there were five common factors shared by failed markets: they were predominately small (under 30 vendors); they suffered from a poor variety of farm products, especially fruits and vegetables; there was not enough administrative revenue; and the market managers were generally inexperienced and either low-paid or volunteer, which led to high manager turnover.

Eamon Molloy, president of the Oregon Farmers’ Markets Association and manager of the Hillsdale Farmers’ Market, says markets need to be treated like a business, not a nonprofit, if they are going to survive the startup phase.

“The ones that are struggling are undercapitalized, marketing and advertising isn’t strong, and they don’t know who the customer is,” observes Molloy. “Markets have a hard time moving from a community event to a business.”

Stephenson points to the 15-year-old Portland Farmers’ Market as a prime example of a market run as a successful business. “They put together a business model for themselves that could attract talent and resources, and they had a growth strategy,” he says. “The more they attracted high-quality people to their board, the more business practices were evident. Now it’s a destination market. People make a day of it. The business community likes it, the political community likes it, and the community in general likes it.”

The New York-based nonprofit Project for Public Spaces says that cities are beginning to understand the local and regional economic benefits of farmers’ markets and their ability to spark downtown revitalization. Lev, Brewer and Stephenson found that markets in Oregon are strong magnets that draw people to downtowns. In Corvallis and Albany, for example, the markets were the overwhelming reason people were downtown on  weekends.

“In the 1980s and ’90s, markets were started by farmers’,” says Lev. “Now, most markets are started by communities, cities or business associations and then they recruit farmers.”

The 15-year-old Portland Farmers’ Market at Portland State Univeristy is one of the biggest markets, with 140 vendors and 15,000 marketgoers on an average day during peak summer months. Its business practices are considered ahead of many markets.

Photos by Leah Nash

THERE HAVE BEEN OTHER PERIODS of growth and decline, say the researchers, in the number of farmers’ markets that were driven by major events such as war, the economy or social upheaval. Markets grew during the Great Depression because of the “self help” programs and during the 1970s because of political activism, and during the 1990s through today, driven in part by a desire to use markets as a way to build community.

The researchers and some market managers don’t see this cycle ending anytime soon.

Dave and Lori Hoyle, co-owners of Creative Growers in Noti, just last year started selling at one farmers’ market, and already they’ve expanded to four in the Portland metro area.

Dave Hoyle sees the growth of farmers’ markets “as a relatively infinite expansion.” Last year his 20-acre organic farm expanded beyond its restaurant base and now he has a list of markets that would like him to sell at their venue.

“There’s an ever-increasing demand,” says Molloy.

But some growers don’t see that as a good thing.

Kevin McGovney, market manager of the Interstate Farmers’ Market in Portland, thinks the market is already saturated. He worries that the primary mission — to support the local farmer and bring fresh, local food to the community — could get corrupted because he thinks people are looking more for a festival event than a local-farm-driven market. And the absence of standards has made the markets a “free-for-all.”

Larry Thompson of Thompson Farms in Damascus has been in farmers’ markets for 20 years and puts a finer point on the downside of success. “There’s been a decrease of farmers at the farmers’ markets,” he says. For example, he says that many flower vendors are getting their stock at the Portland Flower Market.

“The competition has gotten so intense,” says Thompson, adding that he used to be in 11 markets and has dropped back to six in the Portland metro area. Thompson, a lifelong farmer, says that farmers’ markets are such an important economic driver for small farms, he just doesn’t want to see them lose out.

Stefani-Ruff has been with the Portland market for 10 years and remains bullish on the market for markets. She notes that four new ones opened in Portland just this year and the PSU market will stay open until December this year.

Two of the new markets were supported by health organizations: Kaiser Permanente helped revive the Lents neighborhood market in Portland last year with a three-year grant, and Oregon Health & Science University started a market. Stefani-Ruff says this is an important trend in farmers’ markets, also noting that Blue Cross Blue Shield of Oregon gave her market a $5,000 grant this year.

The Kaiser-supported farmers’ markets started in Oakland, Calif., in 2003 promoted by a Kaiser doctor as a “subtle form of preventative medicine.” Now there are more than two dozen markets supported by Kaiser in six states, including the Interstate farmers’ market in north Portland, which Kaiser four years ago seeded with a grant. North Portland had had two failed markets before Interstate opened.

With large corporations hopping on the farmers’ market bandwagon along with voracious consumers, this latest boom cycle in farmers’ markets might have more staying power, despite the inherent risks.

“We opened our market in April this year in the pouring rain,” says Stefani-Ruff, “and it was jammed!”


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