Market Access and Value-added Strategies in the Specialty Crops Industry

Abstract

Value-added (VA) technologies can help farmers in the specialty crops industry generate new products, increase off-season income sources, expand market access, and improve overall profitability. The United States Department of Agriculture defines VA agricultural products as those that have been changed physically or produced in a manner that enhances their value. Drawing from this definition, we investigated the adoption of VA technologies, such as drying, physical cutting into customer-ready portions, and washing, by specialty crops farmers. The objectives of this study were two-fold. First, we analyzed how market access drives specialty crop farmers to adopt VA technologies. Second, we addressed key identification issues by investigating the potential endogeneity between the adoption of VA technologies (vertical diversification) and the number of crops (horizontal diversification), which have not been addressed in the VA technology adoption literature. Data for this study were from a 2019 Web-based survey of specialty crops farmers in the United States. The results suggest that market access, growers’ networks, and crop diversification are major drivers of VA technology adoption in the specialty crops industry. The results indicate that farmers who adopted VA technologies experienced economic growth relative to their counterparts.