AEC-77
Consumers today are expressing renewed interest in buying food directly from the farmer or grower. At one time, farmers’ markets flourished. Over the years, with improved transportation, improved storage facilities, and modern mass merchandising, local farmers’ markets slowly disappeared.
Increasing transportation costs and consumers’ new awareness of the importance of fresh vegetables and fruit in the diet are creating new opportunities for marketing local production to consumers through farmers’ markets. Furthermore, community leaders are realizing the economic opportunities and rewards of farmers’ markets in the realm of community (metro and non-metro) development.
What is a community farmers’ market? This form of direct marketing is located in or near a community and offers the market environment and market convenience where many sellers can sell their farm-origin products to many customers.
This publication is designed to help community leaders, policy-makers, consumers, and marketers establish and manage a community farmers’ market.
Five topics need to be considered when establishing a farmers’ market: market feasibility; sponsorship of a farmers’ market; creating a favorable environment; location and site considerations; and market facilities. The planning stages are critical to the success of the operation, especially when the farmers’ market is a new market outlet to the buyers and the sellers.
The following timetable proposes a calendar of actions and activities that should be followed to establish a community farmers’ market. Consider it a “things to do” list or checklist.
| January | Gather a group of interested people |
| Determine specific goals and tasks | |
| February | Explore the mechanics of direct marketing |
| Look for and settle on a location | |
| Gain community support and fund raising | |
| Check into legalities | |
| Begin publicity to farmers (continue through May) | |
| March | Promote the farmers' market concept |
| April | Market management and organization |
| May | Begin publicity to consumers (continue through September) |
| June | Open the farmers' market |
| July | Promote the farmers' market (peak season) |
| August | Sponsor a special activity |
| September | Organize and solidify farmer-consumer association |
| October | Extend the marketing season with fall crops |
| November | Solicit and evaluate suggestions from farmers and consumers |
| December | Close market |
A community farmers’ market has four concerns regarding consumer preferences: good quality; adequate quantities; reasonable prices; and conveniently located facilities. Nearby roadside stands and pick-your-own farms could reduce the demand for goods at the farmers’ market.
Research has shown that assuring an adequate number of producers as sellers at a farmers’ market is probably more important than evaluating consumer numbers in planning the market. Five to ten producers providing a variety of items over the entire local production season are all that are needed to start a farmers’ market.
To keep these producers selling, average daily sales exceeding $100 per producer are needed. With an average daily sale to each customer of $10, 100 buyers must be present each day to support a minimum market. About 25-30 farmers are needed for best results during peak sales periods, and these require more than 300 customers to support them at the $100 per day sales level.
Other factors to evaluate when considering market feasibility include:
Perhaps the major disadvantages of public ownership are political pressure to allow the use of the market facilities for non-related purposes, lack of control by market users, and potential removal of the market in order to provide other necessary public services.
Some groups (or individuals) who frequently should be involved or contacted when planning a farmers' market include:
| Who Should be Involved? | Why? |
| County or city officials | Site, funding, policing, staffing |
| County Extension staff | Technical information, leadership |
| Area development district staff | Funding applications, coordination |
| Planning, zoning, building code officials | Facilities development |
| Utility representatives | Water, electricity, sewer, garbage |
| Highway department or city street department officials | Entrances, traffic |
| Police representatives | Security, traffic |
| Fire marshall's office | Fire safety |
| FmHA office | Grants, loans |
| ASCS county manager | Federal ag program support |
| Soil Conservation Service | Site considerations |
| Civic clubs and churches | Support, funding |
| Banks | Operating loans, support |
| Agricultural organizations | Support, funding |
| Local farmer co-ops or other ag suppliers | Materials at reduced cost |
| Community Action Programs | Support through anti-poverty programs |
| Local health department | Health code considerations |
| Tennessee Valley Authority | Management support, funding |
| State Department of Agriculture | Promotion, regulations, facilities |
| Local produce dealers and supermarket representatives | Market coordination, goodwill, technical help |
| Local director of Manpower, Inc. or CETA programs | Labor |
| High school vocational agriculture teacher | Educational help |
| Private groups involved in local market development | Assistance, support, promotion |
An advantage of having the two activities in proximity is that it permits producers to contact wholesalers to sell excess supplies and enables wholesalers to buy some of their needs from farmers. Yet, the wholesale industry is characterized by big trucks, fast-moving materials handling equipment, stacks in vehicular areas, early hours, perspiring workers—all of which may prove distasteful or threatening to retail farmers’ market shoppers. Adequate, well-marked, well-lighted parking areas away from moving equipment gives the retail customer more security.
Not much data exist about the impact of non-produce sales activities in farmers’ markets, but flea markets or antique shows which operate regularly all year will likely swallow up a farmers’ market in the immediate vicinity. A farmers’ market located on the road towards a popular activity like a flea market might be very successful if flea market patrons stop to buy produce. However, it is likely that sharing buildings and parking will diminish the impact of the farmers’ market. Most customers will either refuse to visit the market because of parking and walking distances, or will divert their major attention (and dollars) to the non-produce activities.
Although it is possible that more customers would buy produce at the farmers’ market if they were attracted by a flea market, the danger is that producers will lose control and the facility will increasingly be operated for the benefit of the non-produce segment. The best stalls will be continuously occupied by non-produce sellers and soon all stalls will contain flea market sellers who sell each day, while produce sellers will be consigned to outside areas in the back of the parking lot on the days they share the market.
Farmers’ markets are characterized by considerable foot and vehicular traffic. Paved or well-graveled drives and walkways are required for continuous operation over five or six months. Sites which expose patrons to heavy commercial or industrial activities should be avoided. It is beneficial to have a site with well-drained, fast drying soil.
Steep slopes make it difficult to enter and exit stalls; they also create a hazard from parked autos; and they make it much more difficult to display, load, and unload produce. In addition, building construction is harder on steep slopes.
Publicly-sponsored farmers’ markets placed in the path of urban renewal projects or urban sprawl are likely to be lost due to political pressure to use the land for a higher-valued use. Obtaining a long-term commitment from a government body may be difficult in such cases.
Markets which remain accessible at night may become littered or vandalized. Some means of locking-up the site, such as a chain across the drive, is desirable. However, this means the manager will need to arrive at the site very early each morning to admit sellers.
Some customers of farmers’ markets associate the market with rural openness. If so, then the market would benefit from a relatively large site where only farm-type produce is seen, that is as free as possible from encroachment by other activities. This large site would be especially beneficial for parking and roadways.
Sites such as church or shopping center parking lots are suitable temporary location options. However, the usual lack of shade and the high temperatures radiating from paved or asphalt lots will cause produce quality to deteriorate rapidly; customer and seller discomfort may also be experienced.
Sites served by utilities such as water, sewers, and electricity would allow installation of restrooms and produce washing facilities at minimum cost.
Before committing the farmers’ market organization to a site, regulatory agencies involved in controlling land use and access need to be involved. Such agencies as zoning and land use planning boards, the highway department, the building inspection office, the fire marshall’s office, and the police and utility departments may shed light on the suitability of a site.
Among its responsibilities, the Board of Directors should:
An on-site manager is needed to:
All of these factors lead to strong demands by resident producers for regulating who may sell on the market. This leads to a considerable managerial problem. The Board has several policy options:
The size of the market and the availability of an adequate range of quality produce from local farmers may affect the decision. Whatever the decision, the Board needs to impartially enforce the ruling until, after careful review and evaluation, the Board chooses to change it.
Besides the political debate, experiences indicate that allowing resellers and other non-producers to operate in the market may cause the market to come under closer surveillance by sales tax collection authorities, weights-and-measure regulatory agencies, and labor law enforcers. Suddenly, all laws applying to retail sales become applicable.
If a membership fee is charged, only members have any right to sell on the market. This may permit a little more control since eligibility to belong to the group can be established more carefully. It also may exclude casual sellers who only have produce items to sell infrequently, or for a short period of the season. For these sellers, the membership fee may be uneconomical or the membership application procedure troublesome.
Stall rental fees (by the day, week, month or season) do permit anyone to use the market, but the better sites are usually rented and occupied for the season by first-come, first-served marketers. Commissions on gross sales are hard to document because sales are usually cash and records are frequently sketchy. Commissions are usually used when market employees sell produce for the grower.
Consider the local situation when deciding days of operation. Is there a day when other activities in town generate a large crowd, such as the livestock auction? Is there a day when customers have money and are thus more prone to shop?
Probably the most troublesome issue for a farmers’ market is the hours of operation. Producers typically like to arrive early (7 am), get the better sales stalls, sell their produce before it is affected by rising daytime temperatures, go home early (2 pm) to do farm work or chores, and then prepare another day’s produce for sale at this market or another farmers’ market.
Consumers typically do not shop early, and some consumers prefer two periods for sales: 7 to 10 am and 3 to 6 pm; some may want noon hour sales if the market is within walking distance of their employment site. With these hours for the market, customers can purchase early when there is a wide selection of the freshest produce, and also get produce for the evening meal on their way home.
The days and general hours of operation, as well as the months the market is open, should be widely advertised so consumers can be assured of finding produce when they come to the market.
Where wholesale market price quotes are available by telephone, such as the Cincinnati market, a good plan might be to add 10 to 15% to the wholesale price to establish the selling price. Prices may also be less of an obstacle if smaller-sized packages are available. If food stamps are accepted, the level of prices will have less effect on sales. Will credit cards be accepted?
Sellers at a farmers’ market should be especially careful not to engage in price wars with each other, or consumers will expect it and wait. Establish a fair price and stick with it. The price cutter may sell out (at little or no profit) and go home; regardless, fairly priced quality produce will always sell.
A typical comparison of supermarket and farmers’ market prices in the Lexington vicinity during June to September indicates:
| Item | Farmers' Market Price as % of Supermarket's |
| Tomatoes | 68 |
| Summer Squash | 62 |
| Onions | 63 |
| Potatoes | 76 |
| Sweet Corn | 68 |
| Bell Peppers | 73 |
| Cucumbers | 88 |
| Beans | 82 |
Only good produce should be offered for sale at a farmers’ market, but clearly, it is unnecessary to offer only U.S. #1 grade as may be required with wholesale or institutional markets. It is better for the seller to take any picked-over residual “junk” home than try to move it at a bargain basement price; let the “undertaker” buy it as a last resort. Price cutting games are won by the consumers, not by the producers.
Attractive displays with readable information are great helps in selling. In addition, follow these pointers:
Thoughts to Consider
Success is not selling out quickly, but rather having enough produce to permit steady selling all day. Much is lost by sellers who lose patience and leave the market quickly. The most fruitful selling is done after the impatient sellers leave.
Friendliness with customers will open opportunities to suggest new uses for produce, thereby encouraging more sales. Recipes, free samples, proper handling guidelines, storage suggestions, and utilization procedures all show that the seller cares about the customer. After all, it is the seller’s produce, and there should be some pride and sense of accomplishment in delivering a quality product to the market.
A clientele of sellers can be developed by: fairness in dealing with each seller; making it convenient to sell in the market in terms of layout, times of operation, good facilities, and parking; and, developing a faithful, growing customer group. Catering to low volume sellers may be appropriate since most sellers produce on only a few acres.
Studies from Tennessee, Virginia, and Pennsylvania indicate that customers give these reasons for shopping at farmers’ markets:
| Why Customers Shop at Farmers' Markets | Percent |
| Want fresher, better quality produce | 46 |
| Want cheaper price | 14 |
| Want larger quantities | 13 |
| Enjoy the market | 10 |
| More variety | 9 |
| Know the farmer | 5 |
| Other reasons | 3 |
Having each seller sign a form agreeing to release the market organization from any liability—although a good idea—will not completely bar liability claims in some cases. Signs saying “Not Responsible for Accidents” may cause patrons to be more careful, but these signs will not usually reduce the liability either. All farmers’ market employees, members of the Board of Directors, and the on-site manager need to be covered by liability insurance.
Sellers may be asked to provide proof of “product liability” insurance. Product liability insurance is necessary because customers may have an allergic reaction or illness due to some chemical residue, product-acidity, food spoilage, or other food-safety related issue.
Money handling (fees, taxes, sales) procedures to ensure accountability should be established. Thought should be given to bonding employees of the market if large sums are handled. A good accounting system will help eliminate any mishandling of funds, as well as provide management insights for the Board of Directors. Payment of all market bills by check is highly recommended.
Farmers’ markets are a viable, direct marketing activity that provide ample variety, fresh quality, and reasonably priced farm-raised commodities to consumers of all ethnic and economic backgrounds. Shopping at a farmers’ market is a delight for the senses—the medley of smells, tastes, textures, and colors creates a memorable experience that consumers enjoy returning to. However, if the market is to be used profitably and efficiently, community leaders, policy-makers, consumers, and producer-marketers must work together in establishing and operating the community farmers’ market.