Value-added Strategies in the Specialty Crop Industry: Exploring Farmers’ Drivers and Strategies at the Farm Level

Orlando F. Rodríguez Izaba, Purdue University

Abstract

Value-added (VA) technologies can help farmers in the specialty crop industry generate new products, increase off-season income sources, expand market access, and improve overall profitability. These technologies can support the development of rural economies through the generation of new businesses and job creation. The USDA defines VA products as those 1) changed physical, 2) produced in a manner that enhances their value, and 3) physically segregated in a manner that results in enhancement of their value. Drawing from this definition, this study investigated VA technologies such as drying, cutting into customer-ready portions, washing and labeling specialty crops. The objectives of this study are threefold. First, we analyze how market access and diversification drive specialty crop farmers to adopt VA technologies. Second, we address the potential endogeneity between the adoption of VA technologies (vertical diversification) and the number of crops (horizontal diversification). Lastly, we investigate how market access drives farmers to utilize food labels for VA products. Data for this study came from a 2019 web-based survey of specialty crop farmers. A total of 766 farmers completed the survey, with a response rate of 21.5%. The questionnaire included questions related to farmer’s demographics (i.e., educational attainment, gender, farming experience), farm characteristics (i.e., crops, markets, and growing technologies), and farmers’ beliefs regarding their farm system. Results suggest that market access is a significant driver of VA technology adoption. Also, the size of the farm, networks, farmer’s perceptions, and employment growth influence adopting VA technologies. The results also show us that farmers adopting VA technologies tend to experience economic growth.

Degree

M.Sc.

Subject Area

Agriculture|Entrepreneurship

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