“Peaceable Kingdom” by Kevin Sloan/www.kevinsloan.com
Editors’ note: This article was first published in the Journal of Agriculture, Food Systems, and Community Development (JAFSCD), in 2011. Facts within pertain to the time when it was written, and some details may have changed. It has been abridged, but the full article can be accessed at www.agdevjournal.com/component/content/article/78-food-value-chains-papers/182-corbin-hill-road-farm-share-hybrid-food-value-chain.html. We thank JAFSCD and the authors for their kind permission.
Food value chains consist of food producers, processors, third-party certifiers, distributors, and retailers working together to maximize the social and financial return on investment for all participants in the supply chain, including consumers. This article presents a case study of Corbin Hill Road Farm Share, a recently created hybrid food value chain that engages nonprofit strategic partners to provide locally grown and affordable produce to low-income residents of New York City’s South Bronx, while also enabling Farm Share members to become equity owners of the farm over time. The case study shows that the involvement of community-based nonprofits is key to creating a food production and distribution system that engages a wide range of stakeholders, fosters shared governance and transparency, empowers consumers, and benefits regional farmers.
The Hybrid Food Value Chain
Elements that distinguish hybrid food value chains from other food value chains and conventional food supply chains include strategic partnerships. But the notion of hybridity in the value chain is not new. C. K. Prahalad and others have argued that cross-sector partnerships can enable corporations to provide needed products and services to low-income consumers by developing innovative products and services as well as appropriate delivery models.1
Nonprofit organizations are one important element of hybrid value chains, particularly those value chains aimed at meeting the needs of low-income consumers. Nonprofits bring to the value chain social capital that comes from the networks, mutual goals, trust, and beliefs that nonprofit organizations share with their members and stakeholders.2 This social capital—the ability to engage community members, raise funds, disseminate information, and reduce transaction costs—has significant financial value.
Nonprofits can help companies to aggregate and channel demand, lowering transaction costs.3 Their staff members often have organizing skills that enable them to reach out to and attract customers. Nonprofit partners may provide critical insights into the needs and constraints of low-income consumers that they have relationships with as clients, employees, or community stakeholders, and through this knowledge can help in the maintenance of a customer base. Nonprofits also tend to be located within the communities they serve and thus have a first-hand understanding of the logistical issues associated with local business development.
Cocreation of Value
A hybrid food value chain model stresses the collaborative role of value creation by consumers, farmers, for-profit ventures, nonprofit community-based organizations, patient investors interested in social as well as financial returns on their investments, and consumers, all working closely together for mutual benefit. Erik Simanis and Stuart Hart describe this as “business intimacy,” the process by which the private sector cocreates value with nontraditional actors, building connections as companies and communities come to view each other interdependently, developing mutual commitment to each other’s long-term growth.4 And because the needs of the community are part of their mission, businesses and nonprofits are particularly knowledgeable about those needs, and can help customize products and services.
These partnerships can also provide concrete value-adding services: identifying consumers; developing customer trust; communicating effectively with community members about their needs; and identifying innovative ways to address the limited purchasing power of individual consumers.5 Hybrid value chains also help to create business models that span various customer bases.6 If a business can develop a value chain to provide products and services to lower-income customers, it can often provide those products and services to higher-income customers as well, making the model replicable and scalable.
Transparency and Shared Governance
Unlike the conventional food system, the food value chain model treats food producers and processors as partners with consumers.7 But doing so successfully requires procedures to ensure that all parts of the value chain have trust in the fairness and predictability of the partnership through greater transparency than many businesses are willing to provide. Because of the engagement of community-based organizations committed to structural changes that empower the community members they serve, hybrid food value chains are often focused on transforming the food system rather than merely improving its efficiency or increasing access to healthy food. In many cases, the idea of transformation involves creating new enterprises that are inclusionary, participatory, or even co-owned by members. This is the kind of “builder work” that G. W. Stevenson et al. argue is a promising arena for changing the agrifood system.8
As noted above, community-supported agriculture (CSA) programs are one type of food value chain. The idea of community-supported agriculture, in which a group of individuals buy shares from a farmer for an expected harvest, originated in the 1960s in Japan and Switzerland, and spread to the United States following the creation of CSAs by Jan Vander Tuin and Robyn Van En.9 The number of CSAs in the United States has grown from two in 1986 to more than two thousand today; they are concentrated in the Northeast, areas surrounding the Great Lakes, and coastal regions of the West.10
One of the goals of the CSA model is for consumers to support farmers by paying them in advance, sharing the risk of large or small harvests. But CSAs have been established to advance political aims, as well. CSAs promote the formation of direct ties between people and farmers in part to disengage from the global food system and support local economies.11 Many individuals helping to organize direct marketing food initiatives, such as farmers’ markets and CSAs, are also working to solve social justice problems in their localities.12 Research in California found that many farmers’ market and CSA managers prioritized food security for low-income people and used strategies to try to meet the needs of low-income consumers.13
CSAs vary in their structures and business models, including size, cost of membership, growing methods, member involvement, and the food that they provide.14 Since CSAs are highly local creations, they attempt to forge relationships between consumers and farmers that reflect unique conditions and needs.15 For example, although CSAs traditionally require a one-time payment at the beginning of the season for a weekly share of produce, many now offer a range of payment plans and other logistical arrangements, including various selection and pickup methods.16 Some accept Supplemental Nutrition Assistance Program (SNAP) benefits and/or Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) payments, offer free shares to needy families, and offer half shares to keep the cost to the members manageable.17
Many types of collaborations occur between CSAs and other farms and community organizations. For example, Neva Hassanein describes a farm run by the University of Montana that collaborates closely with a nonprofit community group, which manages the farm’s operations and the distribution of fresh produce to ar