North Carolina Tobacco Trust Fund

Support for the Transition to
Value-Added Agribusiness
The Creating Business Opportunities Initiative

Gary Bullen has a couple of college degrees. “But my real education,” he allows, “came from my grandfather. Most of the stuff I learned that really made sense was from my grandfather. Then I went to school.”

Bullen’s grandfather was a farmer and a businessman. “Once in a while,” Bullen says, “there’s somebody who just understands things. He taught me to always be looking for opportunities. And he also taught me that you should never follow people.”

Bullen is today doing his granddad proud: The project he’s heading up is about taking initiatives and creating opportunities. The result is something called, appropriately enough, the “Creating Business Opportunities” initiative.

Bullen recognized a need. In fact, it was similar to a need that NC State University Chancellor James Oblinger and NCSU’s College of Agriculture and Life Sciences Dean Johnny Wynne had also identified. That is: a need to bring into conversation Cooperative Extension Service agents, the NC Department of Agriculture & Consumer Services (NCDA&CS), representatives from our colleges and universities, nongovernmental organizations and small businesses to discuss how to help tobacco farmers and buyout recipients develop successful new business models.

Bullen’s idea was to create regional groups that would build networks to help in identifying and researching business opportunities. A North Carolina Tobacco Trust Fund Commission grant for a project called “Support for the Transition to Value-Added Agribusiness” has helped make that ambition a reality.

A mind merge

As stated in the project’s report to the TTFC, “Identification and investigation of new market opportunities are often cited as critical considerations in the future financial success of an activity.” Assistance from colleges and universities has generally focused on efforts to improve agricultural production and efficiency, often at the expense of training in skills necessary to develop and sustain a successful business – financial planning and marketing, for example. The expertise of Extension agents lies in agricultural production; few have had experience in the development of a new enterprise. This project sought to fill the gaps, provide the training and, most especially, establish effective networks.

“This has been a long-time idea of mine,” Bullen says. “I’ve worked with the Extension Service for 20-something years now, and have worked in the area of business development and farm management, and those two have kind of merged in my mind.

“I always have wanted to be able to take this [idea] to other Extension agents, and when the opportunity came up for me to work on this project, I jumped at it.”

Bullen says that he wanted to be able to help Extension agents develop enough expertise, such that when farmers walk into their offices asking for help in starting an enterprise, the agents would know the right questions to ask, where to find the right resources and where to direct them.

“That,” he says, “was my motivation. I knew that the world has changed around the Extension Service, and that we now need to be thinking not only about how to help folks grow things, but to help them consider things like, ‘Will this make money?’ and ‘Is there a place I can market this?’

“So my goal was to see if we could help start that process of getting people equipped to deal with what all’s going on today.”

Based on reports from the field, that goal is today being realized.

Says Madison County-based Extension agent David Kendall: “Basically what the CBO did was it gave cooperative Extension agents the tools to really help farmers make the transition to other businesses – meaning to other crops, to agritourism businesses or other things – so they can stay on their farms and hopefully earn a living there.”

One such farmer that Kendall has assisted is Sarah Beasley of Elk Knob Farm and Gardens in Madison County. Having worked in the retail food industry in many different capacities ranging from sandwich shops to catering to gourmet food shops to the prep kitchen of a four-star restaurant, Sarah had her fill of working for others and wants to branch out on her own. She and her husband, Andrew, lease the small farm in return for maintenance of the farm area.

Sarah and Andrew are in the first year of growing for restaurants. They’re now familiarizing themselves with their market, learning about growing vegetables, experimenting with vegetables and learning the art of starting and managing a small business. Sarah has grandparents on both sides who grew tobacco in Virginia and Tennessee.

Ron Fish, who heads the NCDA&CS’s Agribusiness Development office, says: “As farmers explore business opportunities beyond the marketing of raw commodities, traditional business planning becomes more critical.

“The CBO program has provided valuable business-planning skills for agricultural service providers and networking opportunities that resulted in closer working relationships with other service providers.

“The result is a more efficient support system for the agribusiness community, including start-ups and expanding agribusinesses.”

“It’s really helping us to rebuild the infrastructure that’s necessary for small farmers to compete by moving to alternatives to tobacco,” Kendall adds.

Building sturdy bridges

The specific goals of the Support for the Transition to Value-added Agribusiness were: (1) to develop a reference book for extension agents to be used to advise farmers on new value-added enterprises; (2) to support practicum as part of a CBO initiative; and (3) to develop a food value-added workshop to supplement this CBO initiative.

One of the initial steps was to ensure that the process would be inclusive. Bullen sought out folks already involved in business-development efforts.

“I wanted to make sure we cooperated where we could and found ways we could complement each other’s work.” He spent time visiting small-business centers, community colleges, with the NCDA&CS and with nonprofits.

“I would ask them, ‘If I sent someone to see you, what kind of resources would you help them with?’”

The second step was to identify an effective training program. Again, Bullen went out and researched what was available, but found nothing that seemed to quite fit the project’s objectives.

“So through our advisory group, we ended up developing our own training and workshop materials,” augmenting those with information on resources available outside the classroom.

Value-added reference books for Extension agents have now been developed and are available on CD-ROM. Direct-marketing and enterprise-budget materials are also provided with the reference books. The notebook and CD–ROM of business resources was distributed to CBO participants and mailed to all 100 Extension offices in North Carolina and is also available online at the program’s new website (www.ces.ncsu.edu/cbo). The website will serve as a business-development resource for Extension agents and other business-development professionals. As part of the value-added reference notebook, five business tools and case studies were developed.

CBO participants were organized into 11 teams based on geographic location and organization. The teams were asked to take some of what they learned from the CBO training and develop a business practicum as part of the CBO training. The business practicum workshop purpose is to strengthen the capacity built by the CBO training.

Guilford County agent Wick Wickliffe worked with a group of individuals who helped develop a business plan for a shiitake mushroom operation. The group analyzed market potential, who buyers were and where they might be most likely to buy. They came up with a strategy to sell the mushrooms at farmers markets, from a roadside stand and to targeted groups.

Wickliffe had studied business in addition to agriculture in college and thus had some foundation in such matters. Nonetheless, he says, “It enlightened me. You continue to learn. The main thing was having the resource readily available – the reference book, and just having things that I can hand out as a starting point.”

Trying it out

CBO teams have developed and conducted six business-development workshops; over 350 people have attended. The workshops received strong positive evaluation marks from the participants as well as a few testimonials from clients assisted by the newly trained CBO teams:

“I’ve been farming nearly 30 years,” says John Rulyea of Walstonburg, “and with tobacco a continuing uncertainty, I was looking for something new to diversify my operation. I attended two Extension meetings on freshwater prawn over the winter and learned a lot about how to produce and market them.

“After hearing what the experts said at the last meeting, I decided to try it out. I’m now raising two ponds of prawns and already have customers eager to buy nearly all my crop. If things go well, I’ll expand next year.”

Four value-added food business workshops were conducted with 138 attendees. The workshops combine business planning with the technical side of starting a new food business. A workbook with necessary business contact and business start-up information was developed to complement the training.

“I didn’t want to be just going through the training and say, ‘That’s it; you’re trained.’ We put together a practicum, and that’s where the Tobacco Trust Fund really helped out. We wanted them to do hands-on business-development kind of work, where they had to take a real business and develop, as a team, a plan for that business.

“We’d talked – and now they had to do.”

Several of the workshop attendees have gone on to start up value-added food businesses as a result of the workshops.

Number-one success

The number-one success, Bullen says, was bringing together people with diverse backgrounds and interests and having them very effectively work together.

“And following up on that, these folks now are working on programs together, developing programs, meeting with people. So I think overall that’s probably the biggest success.

“I wasn’t just thinking of Extension agents as the audience for this; I was looking at NCDA, the community colleges and others – because I really wanted folks to work together. That to me is the real success, that these groups do actually talk to each other.

“Instead of having individual [agendas], saying, ‘We’re going to do this and this and you’re going to do that,’ they all worked together on these programs, and I think it really strengthened what they all were doing. That was a big success.”

Gateways

What would Bullen like to see as the ultimate outcome of this project? “I’m still contemplating that,” he laughs and says.

“But I’m thinking that what I would most like to see is these [CBOs] as a viable gateway to business development. Not the end place; but a gateway that will help people with business development and that can direct their questions. That’s what I’d like to see come of this.”

David Kendall points out that while there are other entities that can provide business planning tools, “They don’t have the knowledge of agriculture per se, and they also can’t relate to farmers very well. And that’s critical.”

Of the importance of the TTFC grant, Bullen says, “Oh, gosh; it made all the difference in the world. This is something I’ve wanted to do for a long time. And [the grant] allowed me to be able to bring in this group of people; it allowed me to get the resources for them and develop those resources, and also to follow up.

“And the Trust Fund grant made possible the practicum – which is where they really had to do something.”