New ideas and fads are always emerging in the agriculture sector, so how do you know which ones are here to stay?
One of these emerging trends is farmers selling directly to the consumer. Direct sales in agriculture can include one-site farm stands, off-site farm stores, farmers markets, direct deliveries, and community supported agriculture (CSA). In the past, direct selling was the only method of selling the food produced on a farm; however, once farms started to grow and intermediaries like wholesales became involved, direct to consumer lost its popularity.
Recently, farmers and consumers alike are realizing the benefits that direct-to-consumer selling has, particularly for small farmers. For example, it restores the control of pricing to the farmer, and it increases the accessibility of fresh food to consumers. Could this mean there is a resurgence of direct selling?
The 2021 agriculture census data from Statistics Canada provides insights into how direct selling is being embraced in Canada on small farms, and what impacts it may have on the agriculture industry.
Overall Increase in Direct-to-Consumer Sales
An initial observation from the 2021 agriculture census is the increase in direct selling on farms from 2015 to 2020. Within that time period, farms that utilize direct to consumer sales have increased from 12.7% to 13.6%.
The most popular type of products sold from direct sales were unprocessed foods, such as fruits, vegetables, poultry, honey, and maple syrup, with 24,857 farms reporting direct sales of these products. The alternative is value-added products such as jellies, sausages, wine, cheese, and pie; 3,829 farms reported directly selling these.
Impact of Farm Size & Location
As highlighted by the census data, the likelihood of participating in direct selling is dependent on the size and location of a farm.
Farms in urban areas are more likely to sell directly to a consumer with 20.9% reporting direct sales. Although farms in rural areas had overall less participation in direct sales, those who did report it were most likely to use a direct delivery method. This comparison suggests that the concentration of consumers in an area is an important factor for small farms trying to determine the best method of direct sales for them.
Small farms, in relation to revenue, were the most likely to engage in direct selling; 32.4% of farms that generated under $10,000 per year reported direct sales while only 18.1% of farms within $10,000 to $24,999 annual revenue reported direct sales.
Organic Farms vs Non-Organic
Direct selling is significantly more popular for organic farms than non-organic as organic farms use direct selling methods at over double the rate of non-organic farms (30.8% compared to 13.1%).
This contrast could be attributed to the likelihood that organic farms tend to be smaller and often produce the most common direct sales products such as vegetables and melons.
Ecommerce on Farms
Data shows that the COVID-19 pandemic has impacted the ways that farmers sell their product, including a shift towards ecommerce.
Approximately 1,234 farmers in 2020 used online stores to sell their products. However, on-farm stands remained important in direct selling since it was common to sell online and have the customer pick up the goods on the farm.
Age & Gender Influence
There is a correlation between the demographic of a farmer, particularly their age and gender, and the usage of direct selling methods.
For example, direct selling happens considerably more often on farms where women are involved in the management. While 10% of farms exclusively managed by men reported direct selling, 17.9% of farms operated by both men and women were involved in direct selling.
Age also has an impact on the likelihood of direct sales. Producers within the age of 35 to 54 years had the highest rate of using a direct sales method at 17.7% in 2020. This was an increase from 15.0% since 2015.
The consistent rise of direct selling on farms indicates that this is not just a passing trend, but rather a movement that may continue to shape the future of Canadians small farms in the years to come. Will your farm take part?