Rural Businesses Grow Faster Together

Rural businesses grow bigger and faster when they are closer together. In Vermont, a cluster of food-related businesses is thriving. The state needs to make sure this group of businesses has access to skilled workers.

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We all know about the farms and ranches in Iowa, California and Texas. But you don’t have to be in Vermont for too many days before realizing that this state has a substantial cluster of businesses that raise, process, package and sell local foods.

Though the second smallest state in population, Vermont stands head and shoulders above every other state based on its per capita concentrations of local farms, CSAs (community supported agriculture), organic farms, and farmers markets. This is important because groups of related businesses — clusters — are now thought to be essential for economic growth. 

Businesses are more efficient when they are clustered. Workers generally earn more. Related business clusters can feed off each other.

Clusters are perhaps even more valuable to the economy in rural America than in cities whose economies are more diversified.  The raw numbers in rural America may be smaller and clusters more difficult to identify, but the distinctive nature of rural economies can be tapped to generate wealth.

There are a number of food clusters across the nation. Oregon counted 2,030 nurseries and greenhouses employing 21,000 people in the Willamette Valley. An 11-county region in south central Minnesota accounts for 54% of all the pork produced in the state. Oregon farmers have been leaders in hop production since the 1800s, and that has helped spawn a local beer-brewing cluster that now includes 77 companies.

Regional Technology Strategies
In Vermont, different rural businesses sectors converge.

But nowhere is there a stronger group of businesses than the food and agriculture cluster in Vermont.

Although Vermont has its food giants, like Cabot and Ben & Jerry’s, overall its food businesses are small. And there are a lot of them. Vermont’s concentration of workers in food processing firms far exceeds the national average — especially in chocolates.

This concentration, or cluster, of food processing builds on itself. The employment gains in all of Vermont’s agricultural and food sectors have outpaced that of the nation. That shows the power of clusters. Concentrations of businesses are more competitive than businesses standing alone. This is true in rural and urban areas alike.

The most important advantage to a business of being in a cluster is having a large number of skilled, experienced workers nearby. That’s why the most important thing a state or county can do to support a rural business cluster is to make sure local colleges and high schools teach skills needed by these firms.

The educational system is the linchpin of a successful rural cluster. Period.

A Cluster With Deep Roots

Vermonters have a special relationship with food. The state has about 30 times the national average in organic farms per capita. The concentration of organic farms here is 50 percent above the next highest state. Organic farming in Vermont has the advantage of decades of support from the Northeast Organic Farming Association of Vermont, which was formed in 1971, long before organic food became a hot market item.

Food, the arts, apparel, energy production and other businesses get all mixed up in Vermont:

• Bread & Puppet Theater in Glover taps more than 1,000 trees, sells maple syrup, gardens, and bakes bread to help support its productions.  

• Butterworks Farm in Westfield uses a wind turbine to provide a significant share of electricity it uses to produce its organic yogurt.   

• At the Annual Vermont Sheep and Goat Association festival in the fall, knitters, spinners, weavers, and designers from across the state who produce yarns and clothing from Vermont sheep, Alpaca, and llamas demonstrate their wares and abilities.

The Vermont Council on Rural Development’s Creative Communities Programs supports a number of places where food and the arts intertwine.

Grand Isle County has proposed trails to local farms, for example. Richmond has started a “Harvest Festival” to celebrate local agriculture. The town of Hardwick, in its report to the state program, noted that “agricultural production builds a link to Vermont heritage while at the same time experimenting with new business models, such as marketing specialty cheeses or introducing new products like soy milk.”  

The Vermont Gardener blog writes:” The Burtts at Maple Glen Farm make a ride in the country a lasting memory.” 

Agriculture even influences the work the state’s writers, performers and craftsmen. The work of artists such as Mary Azarian and Chet Cole is heavily influenced by the agricultural environment. Writers whose work reflects the agrarian economy and landscape include poet Louise Gluck and authors Noel Perrin, David Mamet, and Don Bredes, whose latest mystery, “The Errand Boy,” is about conflict between family and factory-style farms.  Craft artisans and food artisans sell their products side by side at farmers markets and fairs.

Cross-Pollination

Agriculture is increasingly merging with other businesses in Vermont. For instance, there’s an emerging cluster that that melds agriculture with lifestyle and wellness.

Vermont produces medicinal herbs and nutriceuticals that are used by holistic and traditional health practitioners.  Zack Woods, Everlasting Herb Farm, Purple Cornflower, and Naturally Vermont Remedies are examples of farms that sell to health markets.  Even Vermont Peanut butter is marketed for its health benefits.

Tourism is perhaps the most obvious area of where agriculture has converged with other businesses.  The Vermont Sustainable Agriculture Council’s 2003 report recommended that “economic development and other public policies should recognize not just the value of ‘farm gate’ production but also the indirect value of agriculture to tourism.” The state is home to some two dozen food festivals. Tourists come to buy Vermont’s cheese and maple syrup or to visit Shelbourne Farms.

On-farm renewable energy is one of the most promising areas of crossover.  The Vermont Sustainable Jobs Fund is supporting a variety of biofuels projects across the state, with funding support provided by the U.S. Department of Energy.   The more than 20 recipients of grants include Ekolott Farm in Newbury, Gervais Family Farm in Bakersville, Clear Brook Farm in Shaftsbury, and Rainbow Valley Farm in Orwell.

Vermont has the greatest number of methane digesters in the U.S., with a number of additional units scheduled to come on-line in the next few years. These digesters are generating electricity that is sold to Vermont utilities such as Central Vermont Public Service’s Cow Power program. 

Design and fashion represent important if less obvious areas of development for rural areas.  The state’s farms and its resources influence styles, provide materials and traditions from which textiles and apparel are produced.  The outdoor giant Orvis now imports most of its products, but the company continues to sell goods designed and made in Vermont that are closely connected to the state’s natural resources.  Boysenberry, a firm making organic wool clothing, is a Vermont company using Vermont materials.

How to Grow a Cluster

Agriculture is no longer just crops and animals in Vermont.

Except for the largest dairy farms, economic survival and growth depend on rural families finding ways to supplement the incomes from the food they produce though other innovative market opportunities. They may offer weekend farm stays, start catering services, process their own foods, sell directly to local markets, create artisan products and brands, or produce renewable energy by selling biomass, wind power, or operating methane digesters. All of these activities require new and different skills. 

This puts new pressures on public education to expand the content of high school agricultural education and higher education. Up until now agricultural education has been in career and technical education within land grant universities. Programs related to agriculture, other than horticulture, have been rarities in America’s community colleges.

Vermont has the opportunity to become a new national model for supporting for a new form of agricultural economy by expanding the curriculum of high schools and community colleges to include the state’s new agricultural economy.

Stuart Rosenfeld is the founder of Regional Technology Strategies in Carrboro, North Carolina. He is one of the world’s authorities on business clusters. This story is based on a report commissioned by the Vermont Department of Education. 

 

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