The Role of Marketing in Sustainable Agriculture
John E. Ikerd *
Posted on Cacapon Institute website with author's permission
The term sustainable agriculture has been defined in many ways (Allen, et al., Lockeretz, Smit and Smithers). However, most definitions seem to agree in defining sustainability as a characteristic of performance of agricultural systems as a whole rather than attempting to define sustainable agricultural practices, methods, or enterprises. In general, it can be argued, a sustainable agriculture must be ecologically sound, economically viable, and socially responsible (Ikerd, 1994).
Past emphasis on the economic dimension of sustainable agriculture has focused on reducing costs by reducing purchased inputs. Economic comparisons of conventional and sustainable farming systems, for example, have assumed that farmers will continue to produce the same basic commodities for sale in highly competitive national and international agricultural markets. Yields and costs per unit of production are compared for conventional and alternative systems (Ikerd, Monson and Van Dyne, 1992; Repetto and Faeth, 1990; Pimentel, et. al., 1991). Any differences in commodity prices among alternative scenarios are attributed to differences in production levels and market supplies (Knutson, et al., 1990). For example, organic price premiums are either ignored or treated as transitory advantages that will be eliminated by competition (Dobbs, Leddy, and Smolik, 1988; Dobbs and Cole, 1992). However, enhancing market value may be even more important than reducing costs in making ecologically sound systems of farming both economically viable and socially responsible.
A recent comprehensive grassroots assessment of research and educational priorities identified "lack of marketing alternatives" as the key constraint to more sustainable agricultural systems in the southern United States (Worstell, 1995). Marketing has been identified consistently as a priority issue in calls for research and education proposals by Sustainable Agriculture Research and Education (SARE) programs in all regions of the country. However, relatively little useful marketing information has been developed or provided to farmers to assist in their quest for sustainability. Much of the marketing information that has been provided has focused almost exclusively on value-added and niche marketing as strategies to increase profits rather than enhance the overall sustainability of food systems (DeLind, 1994). Relatively little attention has been given to marketing as a means of enhancing overall agricultural sustainability.
The Industrialization of Agricultural Markets
Questions of sustainability arise primarily in relation to the consequence of industrialization. An understanding of this linkage between sustainability and industrialization is critical in planning for a sustainable future, regardless of whether the specific subject is marketing, production, or public policy. U.S. agriculture was industrialized to support industrialization of the economy in general. At the turn of the century, America was an agrarian society. Most of our total resources were spent on the necessary tasks of feeding and clothing ourselves. People had to be freed from producing food and fiber to provide workers for the factories and offices of a growing industrial society. The costs of food and fiber had to decline if consumers were to have discretionary income to buy the things that the factories and offices would produce. Agricultural industrialization was a logical means for meeting both objectives.
U.S. agriculture was mechanized, specialized, routinized, and otherwise industrialized making it possible for fewer people to feed more people better for less money. Industrialization began in earnest when tractors replaced horses as sources of power on U.S. farms. The agricultural sector has been among the last to become fully industrialized, but the driving force of change has long been to make farms perform as factories without roofs with fields and feed lots operating as much as possible like factory assembly lines.
The industrial approach to marketing is mass marketing to support mass production. Factories must turn out large quantities of identical, or quite similar, units to achieve the economies of scale associated with assembly-line production. Automobile manufacturing is a prime example of industrial production, and the black Model T Ford is still the "classic" industrial product. Today, automobiles come in a variety of sizes, shapes, colors, and extras, but they are still, with few exceptions, basic commodities produced for mass markets. Millions of dollars are spent on advertising to ensure that masses of consumers will be willing to drive automobiles that can be mass produced by industrial methods. Farms, like factories, produce large quantities of basic commodities -- corn, wheat, soybeans, hogs, cattle -- for mass markets. Agriculture is promoted among consumers as a supplier of low-cost, basic food stuffs to feed the hungry masses.
Industrial strategies of the past century were highly successful in reducing the claim of food and fiber production on the nation's human resources. For example, the 1895 Yearbook of Agriculture indicated that 42 percent of people in the U.S. were employed on farms in 1890 (USDA, 1895). This compares to less than 2 percent of the total U.S. population living on farms a century later. In addition, those living on farms today earn more than half of their income from non-farm sources (USDA, 1990). U.S. consumers now spend just over 11 percent of their income on food, and farmers get only about 22 cents out of each dollar spent for food (Dunham, 1993). About half of the farmer's share goes to pay for purchased inputs, leaving the farmer little more than a dime out of each dollar spent for food.
Paradigms, such as industrialization, become dominant because they are found to be capable of solving problems that previous paradigms could not solve (Baker, 1992). The industrial era, in general, was fostered by a host of interrelated and complex developments, including access to large supplies of affordable fossil fuels. The industrialization of agriculture was made possible by these same developments, but was driven by the nation's necessity for fewer farmers to feed more people at a lower cost. The industrial paradigm succeeded. Food is cheap in the United States, and the farmer's share of food costs is even cheaper. Farmers and other rural people have been freed from the subsistence living that characterized earlier times. The problems agriculture was industrialized to solve have been solved. If farmers took nothing for their part in food production, average cost of food would only be about ten percent less. And, there aren't many farmers left to move off the farms, if there was anywhere else for them to go.
The initial logic for industrializing agriculture is no longer valid. In addition, the industrialization of agriculture has generated a whole new set of growing economic, environmental, and social concerns that may already outweigh its declining benefits. A growing number of people are looking to a fundamentally different paradigm as they search for answers to the economic, ecologic, and social questions arising from industrial methods of farming. These people need a new paradigm for the creation of economic value, a paradigm that includes marketing as well as production.
The Business of Paradigms
Joel Barker, in his book Paradigms, defines a paradigm as a set of rules that do two things: (1) establishes or defines boundaries and (2) sets standards for success and behavior within the boundaries. He uses the game of tennis as an analogy to illustrate these concepts. Tennis courts are standard in size and out-of-bounds are clearly marked. The ball must hit within these bounds to "stay in play." The ball must be struck with a tennis racket, not a baseball bat or anything else, and the ball is allowed to bounce only once before it is returned over the net.
Paradigms may be simple, as in the case of games, or extremely complex, as in the case of a model for economic development. However, the industrial model has some clearly defined boundaries. The natural environment, including the natural resource base, is considered to be "external," or out of bounds, by industrial managers. Society likewise is considered to be an "external" factor which constrains or sets bounds on what industrial firms can do. Success for an industrial firm is measured in terms of profits and growth. Within the limits allowed by nature and society, industrial firms may take a wide range of actions to maximize short run profits and long run growth. Almost anything that is possible and legal is encouraged if it leads to profits and growth.
Profits and growth are seen as a natural consequence of reducing costs and expanding market share. Industrial firms must be cognizant of consumer preferences, but they search for large groups of consumers who are willing, or can be persuaded, to buy the same basic item. Industrial firms need new mass markets to keep their production cost low and their profits up as they continually strive to expand the scale of their operation.
The new paradigm emerging under the sustainable agriculture umbrella may not be fully understood for some time to come. However, this post-industrial approach to farming is fundamentally different from the industrial paradigm in several ways. The new paradigm for agriculture clearly considers ecologic and social impacts to be "within" rather than "outside" of its boundaries. Ecological soundness and social responsibility are seen as positive goals rather than negative constraints. The new constraints or boundaries are the laws of nature, including human nature.
The new paradigm considers economic, ecologic, and social dimensions of sustainability to be inseparable. Fields, farms, communities, and societies are considered to be wholes that are made up of smaller wholes and make up still larger wholes. Thus, the approach to farm decision-making and management must be "holistic." The challenge is to comprehend the complexities of wholes rather than attempt to reduce wholes to more simple and easily understood elements. Success in the new paradigm is measured against the goal of sustainability rather than profits and growth.
Progress is seen as a consequence of serving the needs and wants of people by means that are ecologically sound and economically viable. Site-specificity is generally accepted as a prerequisite for sustainable farming. Farming systems must be matched with their natural resource base. Sustainable farming systems also must be individualistic. Management and labor requirements must match the talents, abilities, and aspirations of individual farmers. It seems logical that sustainable systems also need to be market specific. Unique sets of production resources, both natural and human, need to be matched with unique groups of consumers -- unique markets -- if systems are to be sustainable.
The new sustainable model implies greater reliance on human resources, in terms of the quality and quantity of labor and management, and relatively less reliance on land and capital. Industrial systems are management extensive, requiring fewer managers per acre or per dollar of capital investment, and little if any management input from hired workers. Sustainability systems, on the other hand, are more management extensive, employing more managers per acre or per dollar of capital investment, and more management participation from hired workers. Thus, successful farming with the new sustainable paradigm would require more farm operators, more productive farm workers, and more farm families than does an industrial system of farming.
Smaller, more diversified farms would become the norm under the sustainable paradigm. However, smaller, diversified farms will be commercially competitive with larger specialized farms only if human resources can be substituted economically for other on-farm resources and commercial inputs. By implication, farmers who succeed with the new paradigm must be more productive as "people." They cannot expect to earn a larger return for their management and labor, thereby reducing their reliance on land and capital, unless they possess unique skills and abilities. Production skills will be critical to overall ecological and economic viability. However, marketing skills may be even more important than production skills in maintaining the economic viability of smaller, diversified farms in the future. The successful employment of people in production and marketing will be critical in maintaining a socially responsible agriculture.
Much of the past emphasis in sustainable agriculture has been on reducing reliance on purchases inputs. However, as indicated previously, input purchases account for about a dime of each dollar consumers spend on food while marketing services account for eighty cents. It seems logical that farmers have more to gain, at least economically, by attempting to capture part of the eighty cents spent for marketing services rather than focus on the dime spent for inputs. However, even greater opportunities may be found in strategies which enhance the final value of products rather than reduce costs of inputs or marketing services. Smaller farmers may face even greater difficulties competing with industrial firms as providers of marketing services than they have competing as producers. The key to success in marketing products from smaller, diversified farms may be the same as for overall sustainability -- a new paradigm.
The Fundamentals of Marketing
New paradigms do not create new facts but instead provide new frameworks or filters for translating facts into knowledge. Likewise, the fundamentals of economic value are not new, but new opportunities and strategies for creating value through marketing arise from the sustainability paradigm. Effective marketing begins with a basic understanding of the fundamental realities of markets, regardless of one's paradigms.
Marketing, in agriculture, includes all the various activities involved in the transformation of commodities sold by farmers into food and fiber products purchased by consumers. The most obvious aspect of this transformation is a change in physical appearance or form. Form changing activities for agricultural commodities range from washing and grading apples to processing wheat into Wheaties. Another important marketing function is transportation. Agricultural commodities must somehow get from the farms where they are grown to the retail outlets where they are bought, in some cases moving across a country or half-way around the world. Time is another important aspect of marketing. Many agricultural commodities must be harvested at a specific time, but can be stored for later use and in some cases be consumed year-round. Finally, in a specialized economy, most consumers are not producers. Marketing involves the transfer of ownership or possession from those individuals who produce, ultimately, to those individuals who consume the food or utilize the fiber.
Market transformations change the value of commodities by changing their form, place, time, and ownership as they move through the marketing system. Each of these functions creates value but also adds an associated cost. Profits result whenever the value added by marketing functions such as processing, transportation, storage, or brokerage, is greater than the costs of performing those functions. These basic principles of marketing may seem simplistic; however, they are the fundamental concepts upon which vertical expansion of farming into marketing must be built.
Marketing, to most farmers, means commodity marketing. They produce commodities such as corn, wheat, hogs, or cattle. One farmer's No. 2 grade yellow corn is pretty much like any other farmer's No. 2 yellow corn. One cattle feeder's 1100 lb. U.S.D.A choice steers are a lot like steers of a similar weight and grade from any other feed lot. Thus, the commodities one farmer has to offer for sale are freely interchangeable with commodities offered for sale by many other farmers, oftentimes including farmers on another continent. Commodity markets tend to be highly competitive because there are many buyers and sellers of the same basic commodity. Price differences among different market locations rarely exceed transportation costs and price changes over time tend to reflect seasonal or cyclical cost differences.
Commodity marketing decisions are primarily limited to decisions of timing. Farmers can forward price their commodities through private contracts or futures markets, attempting to get a price higher than market price at time of delivery. Or they can store commodities for later sale, hoping that market prices will rise more than their costs of storage. In either case, farmers are matching wits with speculators who make their living buying, pricing, storing, or selling commodities. Most conventional farmers are not particularly good speculators. They make a living by keeping their costs competitive and, thus, being able to stay in business at competitive market prices.
Product marketing is different from commodity marketing. Commodities are alike, but products are different. In marketing jargon, products have distinct quality characteristics and, thus, distinct market values. These differences may be tangible in nature (as in nutrient values of foods) or intangible (as in consumer acceptance created by brand advertising). Differentiation creates a more or less unique market for a product, taking it out of direct competition with other products. The greater the differentiation, the greater the potential for profits. Products that have few good substitutes may command a substantial price premium over less acceptable alternatives. However, consumers will not pay much more for a product that has many good substitutes than they will pay for the substitutes.
Products may be differentiated by anything that affects value. Processing, for example, changes the form of raw commodities. Some processing activities, cattle slaughter for example, result in a different form of generic commodity, such as choice beef. In other cases, however, processors are able to transform commodities into distinct products such wines from grapes. A supermarket may stock wines from a number of different wineries because the wines are perceived to be different by a sufficient number of wine drinkers to create profitable markets. Processing is only one means of changing the form of a commodity. Fruits sorted for uniformity of size and color, for example, may sell for a premium over the same fruit sold unsorted.
Products may also be differentiated with respect to time. In mid-winter, local greenhouse tomatoes in the Midwest may command a substantial premium over tomatoes from California or Mexico. However, tomatoes from those same greenhouses may have no advantage over local vine-ripe tomatoes in mid-summer. Winter price premiums reflect the lack of good substitutes at that particular time. Vine-ripe tomatoes out-of-season are a differentiated product, but in-season tomatoes are a commodity. An ability to provide products on time, continuously over time, may also differentiate one farmer's products from the others.
Location is another factor which differentiates the value of products. Farmers near population centers have a distinct advantage in most direct marketing strategies. Pick-your-own fruit, vegetable, or berry farms, for example, must be located within reasonable driving distance of a significant population center. Farmer's markets are also logical market outlets for producers of fresh produce from a fairly limited geographic area. Product handling and transportation technologies, however, have reduced the significance of location, either as an advantage or as an obstacle in marketing.
Market advantages associated with individual ownership or possession are perhaps less obvious and less well understood than those associated with form, time, and place. However, values associated with individuality may be far more important than any other in developing sustainable agricultural systems. Different individuals, or groups of individuals, value the same products differently. In other words, the same form or physical quality of product may be valued differently by two different groups of people at any given time and place. Thus, individual farmers can command higher market prices simply by offering their products to the individuals or groups who value them most. Products that are carefully tailored or targeted to meet the specific needs of narrowly segmented markets may command a significant price premium over mass-produced commodities that meet the same generic need. Matching products to the tastes and preferences of specific consumer groups is the essence of successful niche marketing.
Marketing in the Niches
A niche is analogous to a corner, nook, crack, or cranny. A niche represents something that is seen as being different, uncommon, or exceptional. A niche is small only because it is defined in comparison to something larger. A crack in a sidewalk, a niche in one thing, may be far bigger than a grain of sand, the whole of something else. The essence of a niche is its uniqueness relative to its physical surroundings or conceptual context. Thus, a niche market may be defined as a market that is different from the predominant market for the same basic commodity or generic class of products.
Market niches may be identified in terms of form, time, place, or individuality. For example, the market for blue corn may be considered a niche market. The market for local-fresh produce in season may be a niche market. Or Saint Louis, Mo might be a niche market for certain ethnic foods. However, market niches are associated, most fundamentally, with specific individuals or groups of consumers. The people who prefer blue corn chips make up a niche in the corn chip market only because most people prefer chips from white or yellow corn. The people willingly pay more for local-fresh produce in season represent a niche in the fresh produce market, not the particular time of year. And the ethnic communities of people in Saint Louis, not their geographic location, make up niches in the mass consumer market of the Saint Louis region. Niche marketing is about identifying and serving individuals or identifiable groups who have unique tastes and preferences for products that are different from those of the larger populations of which they are part. Niches are often "described" using differences in form, place, or time of delivery. But, market niches are "defined" by differences in tastes and preferences among people.
Industrialization creates market niches. This assertion is based on the premise that people differ in their tastes and preferences. If this is true, we still have different underlying tastes and preferences, even though we have been bribed and persuaded to buy the same basic things to accommodate the needs of an industrial economy. We have been bribed by the lower prices and persuaded by advertising and promotion. By accepting pretty much the same things as other people, not only because we can be "in style," but we can be "in style" at a lower price. Enough people were willing to accept a black Model T Ford to allow ordinary people to ride in style. But, that did not mean that everyone "preferred" a black Model T. Those who were not totally satisfied represented market niches for other car makers. Some niches grew into mass markets, but others did not. For many people, managing a riding stable may still be more rewarding, personally and financially, than managing an automobile dealership.
The industrialization of agriculture quite likely has created a multitude of niches in markets that are largely undiscovered. Food consumers have been bribed and persuaded into buying mass produced foods through lower prices, advertising, and other forms of promotion. Mass manufacturing and distribution systems employed in food marketing have limited consumer choices to those items that can compete for scarce space in shelves of modern supermarkets. For example, consumers have no choice other than U.S.D.A. choice grade beef, or a single similar quality store brand, in most supermarket meat cases. Fruits and vegetables, while abundant in variety, are generally available from only one or two supplier and one or two qualities of each item offered for sale. Canned and frozen foods may offer several labels, but with very similar products inside the can or box. The variety of different items offered by supermarkets is enormous, but efficiency dictates that substantive choices within generic food groups remain very limited. The emergence of fast food restaurants, likewise, has transformed table-ready beef, chicken and potatoes into a dozen or so manufactured, industrial commodities that can be mass produced for mass consumption. People who are satisfied with products that fit industrial systems of mass production realize a bargain. They get what they want at a lower price. Those who are not satisfied, but just go along, represent potentially profitable niche markets.
Markets for value-added agricultural products are often confused with niche markets. However, most value-added items in supermarkets are more characteristic of mass production than are the basic commodities from which they are made. The markets for services that result in convenience and easy preparation are far larger and more generic that are the markets for beef or broccoli. Those services are mass produced in large, specialized processing firms and are promoted through multimillion dollar advertising budgets. It might be more logical for an individual farmer to compete with IBP in processing beef than to compete with Banquet Foods in producing TV dinners. Many other value-added activities are equally price competitive. Farmers who attempt to add value through processing, transportation, or storage must be willing and able to preform those functions better or at a lower costs than can existing marketing firms, if they expect to make a profit. Even if such farmers are successful, they are not engaging in niche marketing. Instead, they have become successful players in the mass marketing game.
Markets of the Future
The conventional wisdom among those in the agricultural establishment is that trends toward industrial production for mass markets are trends of future for American agriculture. Agriculture is becoming just another industrial sector of our industrial economy. But the world is continually changing. A growing number of people who make their living forecasting the future, the futurist, see a new, post-industrial era where there is room for more than one model or paradigm for economic and human progress (Toffler, 1990; Drucker, 1989; Naisbitt and Aburdene, 1990; Reich, 1992, to name a few).
Noted futurist Alvin Toffler, in his book Powershift, points out that many forecasters simply present unrelated trends, as if they would continue indefinitely, without providing any insight regarding how the trends are interconnected or the forces likely to reverse them. He contends the forces of industrialization have pretty well run their course and already show signs of reversing. He labels the industrial models of economic progress as becoming increasingly obsolete. He claim that old notions of efficiency and productivity are no longer valid. Mass production is no longer a symbol of "modern" business operation. The new "modern" model is to produce customized goods and services aimed at niche markets, to constantly innovate, to focus on value-added products and tailored production.
He goes on to state "the most important economic development of our lifetime has been the rise of a new system of creating wealth, based no longer on muscle but on the mind" (Toffler, p. 9). He contends that "the conventional factors of production -- land, labor, raw materials, and capital -- become less important as knowledge is substituted for them" (Toffler, p. 238). "Because it reduces the need for raw material, labor, time, space, and capital, knowledge becomes the central resource of the advanced economy (Toffler, p. 91).
Toffler also provides some insights into the nature of knowledge-based production. He states that separate and sequential systems of production are being replaced with synthesis and simultaneous systems of production. Synergism is replacing specialization as a source of production efficiency. Tailoring products to desires of specific customers is replacing low price as the source of value. Simultaneity, synthesis, synergism, tailored production -- this is the "mind work" of the future.
Peter Drucker, a noted business consultant and author, talks of the "Post Business Society" in his book, The New Realities. He states "the biggest shift -- bigger by far than the changes in politics, government or economics -- is the shift to the knowledge society. The social center of gravity has shifted to the knowledge worker. All developed countries are becoming post-business, knowledge societies. Looked at one way, this is the logical result of a long evolution in which we moved from working by the sweat of our brow and by muscle to industrial work and finally to knowledge work" (Drucker, 1989, p. 173).
Drucker contends that there is an important, fundamental difference between knowledge work and industrial work. Industrial work is fundamentally a mechanical process, whereas the basic principle of knowledge work is biological. He relates this difference to determining the "right size" of organization required to perform a given task. "Greater performance in a mechanical system is obtained by scaling up. Greater power means greater output: bigger is better. But this does not hold for biological systems. There, size follows function. It would surely be counterproductive for a cockroach to be big, and equally counterproductive for the elephant to be small. As biologists are fond of saying, "The rat knows everything it needs to know to be a successful rat." Whether the rat is more intelligent than the human being is a stupid question; in what it takes to be a successful rat, the rat is way ahead of any other animal, including human beings" (Drucker, 1989, p. 259).
Differences in organizing principles may be critically important in determining the future size and ownership structure of economic enterprises, including farms. Other things equal, the smallest effective size is best for enterprises based on information and knowledge work. "'Bigger' will be 'better' only if the task cannot be done otherwise" (Drucker, 1989 p. 260).
Some see the future knowledge society as one where large industrial firms will continue to dominate. However, Drucker points out that "in the knowledge society into which we are moving, individuals are central. Knowledge is not impersonal , like money. Knowledge does not reside in a book, a data bank, a software program; they contain only information. Knowledge is always embodied in a person; carried by a person; created, augmented, or improved by a person; used or misused by a person. n The shift to the knowledge society therefore puts the person in the center" (Drucker, 1993, p. 210). Henry Ford is quoted as saying that his biggest problem was that he had to hire "whole people" when all he needed was their "two hands." Knowledge work and industrial work are fundamentally incompatible.
The significance of the above quotes is not that they reflect some inherent truth, but rather their consistency with the paradigm of sustainable agriculture. A sustainable agriculture will require site-specific, individualistic, dynamic, management-intensive, knowledge-base systems of production and distribution. Sustainability will require a matching of size and function reflected in a variety of sizes and types of agricultural enterprises to sustain a productive natural resource base, a healthy economy, and a progressive human society. The emerging paradigm for a sustainable agriculture is fundamentally consistent with the emerging post-industrial paradigm for human progress.
Niche Marketing for Sustainability
The key to successful niche marketing is to find a market that is: (a) sufficiently different from its mass market context to allow a significant premium in price (or a significantly lower cost), (b) large enough to be served profitably, but (c) too small to accommodate methods of mass production and distribution. Industrial suppliers attempt to fill market niches by providing as wide a variety of products and services as they can economically provide. However, much of their differentiation is in packaging, convenience, and other largely superficial differences in the same basic products. The primary advantage of being big arises from the ability to specialize, mechanize, routinize, and realize the economies of scale of "mass" production methods. Whenever industrial suppliers attempt to target niche markets, their production methods must become more like those of small suppliers, and consequently they become more vulnerable to small-firm competition. The smaller the market niche, the greater the competitive advantage for a similarly small supplier.
The basic market assumption of the industrial paradigm is "the consumer is always right." The industrial economy is "consumer driven" in that successful producers must fulfill the needs and wants of consumers. In reality, consumers are considered to be right only if their choices accommodate the needs of the industrial economy. If consumers cannot be bribed, persuaded, or coerced to conform to the requirements of mass production, they are ignored by industrial suppliers. These ignored consumers represent potentially profitable niche markets.
The basic market assumption of the sustainable paradigm is "the needs and wants of both consumers and producers must accommodate long run ecologic, economic, and social sustainability." Niche marketing motivated solely, or mostly, by the desire to increase profits may contribute no more to long run sustainability that does any other form of market segmentation or product differentiation (DeLind, 1994). The role of niche marketing in sustainability is to enhance the economic viability of systems that are ecologically sound and socially responsible and otherwise likely to be sustainable.
Sustainable niche marketing requires a matching of resource management, production, marketing, and consumption in ways that sustain the whole vertical system. No one element of that vertical system is considered supreme, neither consumer nor producer. People must protect and sustain the resource base, but the resource base must support and sustain human society. The economic system must provide the incentives and means for sustaining both resources and people. The diversity in size and type of economic enterprises must match the diversity within the natural resource base and diversity within human society.
If the road to agricultural sustainability leads toward larger numbers of smaller, more diversified farms, then niche marketing represents an opportunity for smaller, diversified farms to expand vertically and to compete commercially with larger, specialized agricultural enterprises. Sustainable niche markets that grow into mass markets will remain sustainable only if the production systems that support them remain sustainable. However in the post industrial era of human progress, niche markets may well become the norm rather than exception. The natural resource base is inherently diverse as are the abilities and aspirations of producers and the tastes and preferences of consumers. A similarly diverse collection of diverse small farms and matching niche markets might logically characterize an agriculture capable of meeting the needs and wants of people by means that are sustainable. Niche marketing may well be a critical key to long run agricultural sustainability.
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* John Ikerd is Extension Professor of Agricultural Economics, University of Missouri, Columbia. Paper presented at 87th Annual Meeting of American Society of Agronomy, St. Louis, Mo. Oct. 29-Nov. 3, 1995.
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