Collins hosts hearing on small business partnerships
The Small Business Subcommittee on Health and Technology, led by Rep. Chris Collins, R-27, conducted a field hearing Tuesday in Geneseo that examined the potential benefits of small agriculture businesses entering into partnerships and other supply arrangements with large processors and retailers.
The hearing also explored how these arrangements may create more business opportunities for small firms.
Due to technology, changes in product processing, manufacturing, and consumer demand, America’s agriculture sector has changed over recent decades, and small agriculture businesses are facing new challenges. Many agriculture producers have sought to specialize in the production of one or more commodities to meet the needs of their processing and retailing customers. Demand for local produce and organic produce have created a new market for many small producers, as well.
Arrangements and partnerships between small and large agriculture companies have allowed small producers to continue to grow and remain profitable.
Linda Hamilton of Triple H Farm, Leicester, was among those testifying. She spoke on behalf of the New York Farm Bureau.
“Processing vegetables for the consumer market is not something that our small business could do on our own. The huge investment in processing equipment and marketing costs alone are not something a farm of our size could profitably take on. So we are integrally dependent on the processing companies, as much as they are dependent on the quality product that we deliver to their doors,” Hamilton said.
Collins said that contracting for distribution, processing and other supply arrangements can help small farms by minimizing risk while expanding market opportunities.
“Doing so has also improved their ability to obtain operating and expansion capital from lenders, it has given them greater access to a larger geographic area, and the income security of partnerships has given smaller farms the flexibility to innovate and find niche markets,” Collins said. “Today’s hearing provided a valuable dialogue on the many benefits of business relationships within the agriculture sector.”
Others who testified included Ray Schueth, director of agriculture for eastern operations for Seneca Foods Inc., Janesville, Wisc., and Joe Weber, vice president of Mike Weber Greenhouses, Seneca.
“These producer relationships are absolutely essential to our ability to secure the needed produce for canning and freezing,” Schueth said. “The number of acres contracted with each producer may be as small as a few acres of peaches or pears ... to in excess of 1,000 acres of peas, sweet corn, green beans or any of the other fruit and vegetable crops that we process.”
Weber said the value of a partnership between small and larger businesses allows consumers to “get a unique, quality product that a small, local business can offer; and the large business can help distribute the product to customers over a geographic area and volume that we could never duplicate.”
Weber noted Wegmans as an example of such a partnership, with its “strong brand, an excellent reputation and a tremendous commitment to food safety and their customers.”