I am re-posting this newsletter from Local Harvest because I agree with the information 100%. I really enjoy getting these newsletters they always inspire me.
LocalHarvest.org is the newslatter that comes from an Intentional Eco Community in Ashville, NC called Earth Haven.
LocalHarvest Newsletter, July 31, 2016
People Over Profits
Welcome back to the LocalHarvest newsletter.
You may have read that the venture-capital (VC) funded company Farmigo recently announced that it was terminating their online ‘farmers market’ and going back to just focusing on their software services.
Farmigo’s food distribution service was not Community Supported Agriculture by any stretch of the imagination. Although they did buy from some small farmers, they also bought from a lot of larger farmers whose products you can find in grocery stores across the country. It looked a lot more like the Amazon of food rather than a local farmers market.
As more and more of these heavily funded food distribution companies come online (Farmigo, Good Eggs, Instacart, Amazon Fresh, etc), spending millions of dollars to acquire customers and advertise, they pull many would-be CSA customers or farmers market shoppers into their schemes. What are the impacts on the actual local farmers in those regions? Certainly hundreds of farmers benefit from being able to wholesale their products to these companies, at however smaller margins than selling direct-to-consumer. Yet many of the companies go out of business a few years later and the farmer is once again left scrambling trying to find a buyer. A couple farmers and multi-farm CSAs recently shared with us that they had to fold or change their sales model due to competition from fake CSAs like Farmigo and others, only to witness those ventures close just a few years later. “The offering of ‘local’ food with the click of a mouse, delivered fast and fresh to your front door is not something most of us can compete with,” said Marie Tedei of Edens Organic Garden in Texas. Several long-standing CSAs have told us that unlike years ago when they had waiting lists, they are now struggling to sell all their memberships.
LocalHarvest has several multi-farm CSAs, Food Hubs, or small distribution companies that we support with our software. We have no problems with ethically-ran, privately or cooperatively owned food distribution companies that accurately represent what they are doing. However, we do take issue with companies posing as CSAs or pretending that their mission is to assist farmers or help consumers gain access to the freshest, most sustainable foods when their actual mission is to gain the largest returns for their investors. Even the New York Times has noticed this issue, just penning an article about the rise in fake CSAs and how that impacts actual CSA farmers.
The Times article brings up an important truth that CSAs and Farmers Markets only serve a very small slice of the American population. If we want more diversified family farmers and if we want Americans eating a fresher, more localized diet, there has to be equally diverse efforts to create more options for consumers to get access to that food. We support varied efforts to scale up and scale out sustainable foods with a commitment to quality, transparency, economic equity, and environmental responsibility. Unfortunately, the investor-owned and funded efforts tend to try to get too big too quickly in order to maximize investor returns. They are, by design, an unsustainable model. The profits go to the investors, not back to the farmers, nor up the supply chain towards lowering prices for consumers. A venture capitalist expects to make a significant return, on the order of six times their original investment. This means, for example, that the staggering $26 million dollars that have poured into Farmigo needs to generate $156 million for those same investors. Maybe I lack imagination, but I just don’t see how that could happen from CSA management software or building a food distribution business.
LocalHarvest runs our business differently. We are a very small, privately owned business. We allow farmers, farmers markets, and others to list their businesses for free in order to link them to consumers searching for good food. To support that free service, we have built software for CSA farmers and food hubs that generates a modest but sustainable revenue stream that in turn supports our amazing little team of dedicated employees. Despite repeated attempts by VC investors to purchase a slice of our company, we have resisted because we understand how that would change the nature of our work for the worse.
So keep directing your dollars as closely as you can to the actual people who grew your food, grow some of our own, and resist the hype of these new techno-fancy, multi-million dollar funded models that may look pretty on the outside but usually lack the ethical core that we need to create a truly sustainable food system.
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