Interview with OCA on Breaking the Chains

September 15, 2005

Organic Consumers Association's "Breaking the Chains" Interview with Woodbury County, Iowa's Director of Rural Economic Development, Rob Marqusee.

Woodbury County, Iowa made history by offering tax incentives to farmers who switch from conventional farming to organic. County Supervisors voted to provide property tax rebates for those undertake the conversion to organic farming practices. In all, the Woodbury County Organics Conversion Policy will grant $50,000 a year for five years to those farmers that participate in the program.

The person behind the historic policy, Rob Marqusee, recently joined the Organic Consumers Association's Ryan Zinn for an interview.

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Ryan Zinn (RZ): Tell us a little about Woodbury County

Rob Marqusee* (RM):

Woodbury County is located in the northwest section of the State of Iowa with a population of 103,000. Woodbury County is home to 15 incorporated cities, 2 unincorporated communities, and 24 townships which are primarily rural agricultural areas. Sioux City, the county seat, is the largest city in Woodbury County with a population of 90,000, and borders South Sioux City, Nebraska (across the Missouri River) and North Sioux City, South Dakota (across the Big Sioux River) - thus, being a tri-state region. Historically, agriculture has been the primary industry in Woodbury County and was home to the famous Sioux City Livestock Exchange. Major agriculture-based employers include John Morrell & Co., Tyson Foods, Inc., American Popcorn Company (Jolly Time Popcorn), Gelita USA, Cargill, and ADM.

Woodbury County has placed a high emphasis on education, arts, recreation, and health. Briar Cliff University, Morningside College, Western Iowa Tech Community College, and the Tri-State Graduate Center are located in Woodbury County. The famous Orpheum, a historic grand theatre and performance center, has been totally renovated and is the home of the Sioux City Symphony. The regions two major hospitals are located in Sioux City with satellite facilities throughout the county. Recently, the Woodbury County Board of Supervisors adopted the "Woodbury Health Initiative" to end obesity and provide education directed to diet, benefits of eating locally grown foods, and exercise.

RZ: What is the Organics Conversion Policy?

RM: The Organics Conversion Policy provides a full rebate of real property taxes associated with land that has been converted from conventional farming to organic farming. The rebate will be provided for 5 years to anyone that converts to organic farming techniques that comply with the USDA National Organic Program Standards and Guidelines. An application for the rebate is required and must set forth a description of the land converted, planned markets for products during organic transition and after certification, planned conservation techniques, and other relevant information necessary to promote success of the applicant. An "Organics Board" will review all applications to determine viability of the business plan to assure success of the applicant. Certification will be required after the third year (for crops) of conversion; failure to obtain certification, or reversion to conventional farming at any time during that 5 years, will require a return to the county of all tax benefits received under the policy. The Organics Conversion Policy provides up to a total of $50,000 per year for five years in tax rebates for all participants; the total potential cost to the county over a five-year period is $250,000. The Organics Conversion Policy is but one incentive to those seeking to establish an ag-business in Woodbury County; additional benefits are also available to a producer or processor who add to the job base in Woodbury County.

RZ: How did you come up with the policy?

RM: The policy was developed in response to the decline of rural populations primarily caused by large-scale subsidized commodity farming. With the advent of modern technologies (chemicals and machinery), the historic small family farm-based economies of rural communities have been undermined. In short, modern farming relies on super high-volume, extremely low-margin (or produced at a loss before subsidies), two crop rotations (corn and soybeans); the largest share of profits going to non-localized food processing mega-corporations. It is now impossible for young people to enter "conventional" farming as a career due to high start-up costs associated with land and machinery acquisitions. The average age of Woodbury County farmers is 57, with over 50% of the farmland to change ownership in the next 10 to 15 years.

Jobs for local college graduates are scarce, causing young people to look outside the area for high paying jobs. Economic development in Woodbury County has, until now, been centered on bedroom communities near Sioux City, Iowa who draw their economic base from residential and retail sectors. In general, economic developers for rural communities have focused on transitioning communities from farming-based to service-based economies. While significant state political emphasis has been placed on the development of value-add agriculture, there has been a lack of entrepreneurship and venture capital for small to mid-sized value-add rural-based operations; most of the emphasis being placed on large-scale ethanol, bio-diesel, and large scale bio-tech production. However, there have been a few success stories in the State of Iowa related to small niche-food operations and local farmer's markets.

The Policy provides incentives for young farmers to engage in high-margin organic farming businesses on smaller farm acreages, thus supporting small family farm operations - thus encouraging the re-emergence of local ag-based economies. The Policy was the only logical way to address the production side of agriculture as an object of economic development - and it had to be enacted at the local governmental level since there is no state financial assistance for agricultural production. While organic production is typically viewed as "value-add" agriculture, state assistance is, in large measure, provided to processing operations that meet certain job creation/wage benefit criteria that is not applicable to production-side agriculture. There are, however, state education and certification resources available for organic farmers - primarily through the Iowa Department of Agriculture and Land Stewardship and the Leopold Center of Iowa State University. There are private associations within the state who are devoted to sustainable agricultural practices.

Prior to formulating the policy, I had personally interviewed many local Woodbury County farmers and key farm association officials in search for a way to improve rural community economies. The universal response from older farmers and the associations was that they had no idea as to how to revive rural communities other than through development of ethanol or bio-diesel facilities. I then went to economic development conferences throughout the state in search of "the answer" for rural Woodbury County. The information provided at these conferences ranged from: "nobody knows the answer to rural community economic development" (SMART Conference 2005, Des Moines, Iowa) to "focus on exports of large quantities of processed food" (Professional Developers of Iowa, Spring 2005 Conference). It should be noted that I have no problem promoting ethanol/bio-tech or focused export development as part of an economic development strategy; however, those strategies do not directly and immediately address rural community needs. Furthermore, those strategies require major investment that have top-down benefits - rather than from bottom-up benefits - thereby depleting a rural community of individual initiative and character.

Organic producers receive higher margin in a market that is growing by approximately 20% a year. Since lower acreage organic farming can be lucrative (as compared with federally subsidized commodity farming), and since organic farming is localized and is viable, the only real option open to the county was to promote organic agriculture by offering a rebate of real property taxes for those desiring to convert to organic farming. There are few tools available to a county that wants to revive its rural communities; offering a direct grant is the most obvious tool. Grants can only be provided for programs that benefit the entire community of taxpayers. It is rational, therefore, that the promotion of higher incomes to more family farmers (which will revive rural communities), and the development of local small to mid-sized processing facilities, is in the overall county's best interest. Counties have historically been hesitant to develop proactive policies. Large scale commodity farming is heavily subsidized by the federal government, the state provides benefits geared to industrial style development, yet sustainable and natural production is not given the same federal or state attention. Local governments must, therefore, take the lead to promote agricultural diversification within its jurisdictions.

RZ: What else do you have planned for local and organic food and farming for Woodbury County?

RM: Woodbury County Board of Supervisors will be presented with a "Local Food Purchase Policy" (LFPP) for adoption within the next 45 days. This policy was planned as a follow up to the Organics Conversion Policy. The LFPP will provide, in principle, that all county food facilities will be required to purchase locally grown food if available; if not available, then the food service may go to its typical outside suppliers. The LFPP will direct that the county food service contractor will provide a "demand matrix" and a local food broker will provide a "supply matrix" so that availability can be determined in advance.

One of the objects of the LFPP will be to provide a guaranteed local market for those converting to organic for those items demanded by the county food service contractor. In other words, a local demand/supply chain (or value-chain) will be created. The local food broker will spin-off other business operations that may be required, such as a processing facility in order to deliver food in a condition typically required by an institutional food service.

The Woodbury County Board of Supervisors recently adopted the "Woodbury Health Initiative"; a joint proposal of the Siouxland District Health Department and the Rural Economic Development Department. The Initiative seeks to reduce obesity and promote healthful diet and exercise. A segment of the Initiative is to enable a "mobile farmer's market", promote the benefits of local fresh food, and serve WIC (Woman, Infant, and Children) and elderly populations throughout the county. The local school districts will receive assistance in the development of wellness policies. The Initiative was adopted in order to support a grant request from Siouxland District Health under the Senator Harkin "Wellness Grant" to the State of Iowa. The Initiative, and press release, are posted at www.woodburyiowa.com.

RZ: Is this a model that could be used in other counties?

RM: The Organics Conversion Policy could certainly be adopted by other counties. However, there are a few factors that could help insure its success:

1. Does the county have population center that could be a supporting market for the locally grown food?
2. Are there existing agri-businesses in the area? Does the county have historical ties to agriculture?
3. Are there local processing facilities - or, if not, is there rail or major highway that would facilitate transportation of the raw product?
4. Are there entrepreneurs who could develop niche products or promote new processing facilities?
5. Are there successful organic growers in the area?
6. Are the local Board of Supervisors or County Commissioners fully supportive of proactive measures to promote local agri-business?

It is important to plan for both local and national (international) markets. Furthermore, it is important that a network of support be in place so that the conversion business is successful.

RZ: What has been the response by the Woodbury farming community?

RM: The response has been surprisingly positive from all business segments of the county. The strong impression is that the county is being proactive by encouraging local industry and self-determination. The policy has actually prompted potential synergies that would not have existed but for the policy. The policy has prompted discussion and consideration of a new direction. Of course, there are many dyed-in-the-wool farmers who never want to see any weeds in their fields; however, many farmers have been encouraged by the new paradigm. Education will be the key to the success of the policy, since many farmers are unclear of organic farming practices and opportunities. Applications for conversions will be available in January, 2006, thus providing needed time to educate the farming community.

RZ: Do you see local policy as an alternative to the current Federal farm subsidies programs and Farm Bill?

RM: I would not see local policy as "an alternative" to federal subsidies, but as co-existing with federal policies - at least for the near future. Of course, for the benefit of the environment, local economies, and for general public health, it would be beneficial if more farmers chose organic farming as "an alternative". At the present time, I don't see it as an either/or proposition. Local policy can lead the way to better federal farm policies in the future that encourage organic production. The object is for government to provide support where there is significant added value that comes out of that support; otherwise, it becomes nothing but a disguised welfare program. If local policy can provide effective assistance at minimal cost, and that assistance flowers into profitable businesses, increases the income of local citizens, and promotes a healthy environment, then that is value added. As for federal subsidies, we must re-think our federal support priorities in light of global competition and markets. According to news sources, 2005 will be the first year in the nation's history that agriculture will contribute to the trade-deficit, down from a $200 billion trade surplus just 5 years ago.

As a final comment on this topic, governors and state legislators need to be educated on the benefits of organic farming for local communities. In many states, counties are restricted in terms of policies they can enact. We must also contribute to the contents of the next federal farm bill and support initiatives that will promote organic farming and local initiatives..

RZ: How can local activists promote these programs in their community?

It is surprising what a few committed individuals can do to better their community. Advancement of these programs comes from non-combative rational promotion of economically sound ideas. Counties that are largely rural in character are already aware of the challenges facing their communities. The time has come when the status quo just does not cut it anymore; they are looking for new ideas. The Organics Conversion Policy is a very low risk policy to the county while providing a potentially huge "upside".

RZ: What has been the impact of Wal-Mart and other "Big Boxes" on the community?

The large economies of scale, with low foreign labor costs and low local worker-benefits, promotes cheaper consumer costs for commodity products. Obviously, this is devastating for local small businesses selling the same type products; it is also devastating to local character of place. As for food, our culture has been "Wal-Marted" a long time ago without us even recognizing it. Fast food companies, grown with profit and convenience as highest priority, has caused us as a society to think less of what we eat. The further we are separated from the production of food, the less we think of its quality production as a priority. If it tastes good, who cares. We care more for the food we feed our pets than what we eat ourselves.

Food is basic to human existence, the cheapening of its quality and its production is bound to have impact on the society. Our society is filled with promiscuous eaters and producers; and promiscuity cheapens the meaning we place on our lives.

I believe things are turning around in the United States. People are willing to pay more for food that is meaningful to them. Fast food companies are recognizing the demand for more healthful menus. While we may still go to Wal-Mart to buy a DVD, there are more people who are enjoying going to a local theatre to see an independent film.

There will always be a large market for Wal-Mart or bad food; but there is a growing market for people who care about the quality of their lives.

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For more information:

Woodbury County Iowa offers tax breaks to organic farmers, first in U.S. Associated Press

Woodbury County Organics Conversion Policy

*Biography

Rob Marqusee is the first Director of Rural Economic Development for Woodbury County, Iowa - Sioux City is the county seat; a position recently created (on March 21, 2005) to reverse economic declines in the rural areas of the county.

Rob has been an attorney since 1979 and is licensed to practice law in the states of California, Colorado, and Iowa. He holds a LL.M. in Taxation (Masters in Tax Law) from the University of Denver, a B.A. in Philosophy from the University of Denver (Phi Beta Kappa), and received his law degree from Seattle University. Rob practiced law in Santa Barbara, California for 13 years.

Born in New York City, he was raised in Boca Raton, Florida where his family was engaged in economic development activities. His father has been a vegetarian and organic/natural food advocate his entire life which has had significant impact on Rob's lifestyle.

Rob has 5 children and presently resides in Sioux City, Iowa.

Robert B. Marqusee
Director, Rural Economic Development
Woodbury County, Iowa
CELL: 712.389.2049