Ag producers head for new script, stage

Start rehearsing your lines, because you're going to be working from a new script in a different theater.

Simply growing lots and lots of world-class food and fiber no longer pays its way at agriculture's box office.

As a member of a new, nimble cast you'll emote across a global, dot-com stage to audiences of picky, well-heeled consumers.

That's an analogy, hopefully one not too strained, for the theme of a report entitled Producing a Competitive Advantage: Agri-Tech in the San Joaquin Valley just out from the Great Valley Center.

The Modesto-based GVC is a non-profit foundation established in 1997 to promote the economic, social, and environmental well-being of the eight valley counties from San Joaquin to Kern.

Actually the report is a product of New Valley Connexions, a partnership of the GVC and the California Trade and Commerce Agency.

While it doesn't deal with hot issues of land use, water supply, endangered species, or labor - not to mention California's energy woes - the report does offer thoughts for the mosaic of economic viability.

Five strategies Here are the document's five strategic recommendations with samples of how to achieve them:

1. Redefine production agriculture in terms of the "New Economy," a system of business relying on rapid, technology-intensive, worldwide, networking for advanced communication.

This involves producers and processors interacting with colleges and universities and trade agencies to perform actions ranging from precision agriculture and direct marketing to consumers to monitoring global economic trends.

2. Use technology to address major environmental challenges by focusing on air and water quality issues. Examples of action would be finding ways to address the costs of environmental regulations as well as supporting research and incentives to reduce air emissions from irrigation engines, farm vehicles, and processing plants.

3. Make the SJV a research and development center for new ag-based products. Beyond being a think-tank, this would entail research on niche products and food safety and support tax incentives to encourage product development.

4. Provide the SJV ag community with access to a broadband technology infrastructure. At the core of implementation would be increasing the use of technology, both business-to-business and business-to-consumer and requiring a telecommunications infrastructure.

5. Develop an SJV marketing identity, including brands. Steps would include increasing appreciation for the valley's agriculture, niche products, marketing of the valley's cultural diversity, and promotion of agri-tourism.

Leadership from higher education and state government agencies would be prominent in achieving all of the five recommendations, while agricultural and civic groups, local government, public utilities, industry, and business would ally on some.

Consultants preparing the report created a model identifying several forces in the new consumer- and technology-driven marketplace. One is mass market fragmentation. Niche markets are rapidly trending to one-to-one marketing. Opportunities for niche foods rest with appeals of health and nutrition, convenience, and origin from elsewhere in the world.

Other distribution changes are evident, as the report says, "as the food distribution chain and traditional distribution channels disappear in the name of reducing product and distribution costs.

"Fewer, but larger and more powerful, buyers and sellers emerge ... making it easier for suppliers and retailers to establish longer-term, one-to-one relationships."

In the shake-out of consolidation among producers, processors, and retailers, two categories will emerge: mega-players and niche-players.

The report takes note of evolving electronic trading. "This will require a new level of trust between business partners as we move to a system of farm-to-retailer partnerships - with supply and price conditions structured to build a category franchise responsive to consumer wants and needs."

Preferences of top shoppers, the 30 percent that generates 70 percent of sales, will drive most of the business. Mass marketing will shift to a customer-specific approach as consumer data reveal purchasing habits, understand customer profitability, and offer special deals to customer segments.

As the Internet supports the business-to-business linkage, it also provides opportunity for retailers and niche-players to reach directly to consumers. According to the report, many agree the Internet is important, but most have yet to explore it as an effective marketing tool.

"A growing number of producers," it says, "are finding profitable niches with Internet consumer-direct opportunities either themselves or by partnering with others in the distribution chain."

The report, according to GVC president Carol Whiteside, frames opportunities of agricultural technology and offers direction for the valley to remain a world leader.

"Agriculture, the foundation of the San Joaquin Valley economy," she says, "faces a transformation that will affect every commodity, trade organization, producer, and processor."

More information on the report is available at 209-522-5103 or

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