Good practice general information

Title of the practice

Community supported agricultural business model in Hungary

Organisation in charge of the good practice

MyFarm Harta

Description

Short summary of the practice

Buying groceries and food products is not only a question, which market is the easiest to reach but as customer awareness increases, becomes a matter of trust. Buying directly from farmers and supporting local economies ensures low emissions, as there is no extra transport required, and contributes to fairer return for farmers as well, as highlighted in the Farm to Fork strategy of the European Union. Reversing the loss of biodiversity, helping mitigating the impacts of climate change are also important goals that can be easily achieved with short supply chains and chemical- and pesticide-free farming methods. From the perspective of the consumer, however, this is not as easy as going to a local supermarket and being able to purchase everything in one go.

The Community-supported agriculture (CSA) model connects the producer and the consumers directly within the food system by allowing the consumer to subscribe to the harvest of the farm. It is an alternative socioeconomic model of agriculture and food distribution that enables the producer and the consumer to share the risk of farming.

Because subscribers have practically full rental rights, not just the profit, but also the risk is shared. In case of vis major events subscribers might get no produce, but in a year of optimal weather conditions the crate arrives loaded full of vegetables and other goods.

In case of MyFarm Harta it is no different, in return for subscribing harvest, subscribers get their regular boxes of vegetables and other optional farm goods, like fruits, eggs, herbs, spices, meat and hone A wide range of seasonal supply is available in the webshop; in the summertime mostly fruits and vegetables, while in the wintertime – smoked meat products and fresh eggs.

The farm was initially financed through IndieGoGo, a crowdfunding platform, which granted the start-up capital in 2019.  The aim of the project was to promote small-scale farming and make organic vegetables and fruits easily accessible.

This crop-sharing practice has many advantages; the pesticide-free farming helps to prevent a loss of topsoil, soil poisoning, water pollution, death of insects, birds etc. and the organic produce has been shown to have a higher vitamin and mineral content, so it contributes not just to biodiversity but health and more nutrient-dense food. It’s a short supply chain without intermediaries, so overhead costs are low, from which both the producer and the customer can benefit. Chemical free cultivation requires 3-5 times more human work than chemical farming, so it directly helps local employment.

Subscribers have a say in the happenings on the farm. The farmer and his team has a Facebook group, where a constant cooperation is kept up, information and news are shared, preferred plants and proportions in the plantation can be voted for. Subscribers are welcome to visit the farm, they can participate in the harvest or just follow the development of the plants via an online application. The whole operation is transparent, which builds and maintains trust. A charity scheme is also included in the model, the farm donates 10% after each order to children in need and charity package can also be bought.

As the model extends new farmers are involved. Careful selection contributes to maintaining that those who enter measure up to the standards of this practices. Expertise is needed to join, but applicants also share the values of the model including environmental consciousness and social responsibility. Ultimately, only those who show signs of real commitment can start their own businesses, as new entries are separate businesses, meaning this model works as a kind of “solidarity-based franchise”.

Category of the good practice

Biodiversity, Circular economy, Resource efficiency

Resources needed

The optimal farming area was determined in around 2000 square meters for a family-run business. This ensures that regular inspections can be made and even the removal of harmful insects can be done in a physical way, without using pesticides. New farmers entering this scheme should provide their own farmland, but the management provides all other resources in the first year. From 200 applicants, only five started their farms in 2021. During the first year, new farmers are limited to 500 square meters to be later extended to around 2000. Seeds and other resources are to be bought from the centre of operations later on.

Timescale (start/end date)

The project was started in 2019 and it is ongoing.

Strategic relevance (long term impact)

The pesticide-free farming encourages biodiversity, and it has no harmful effect on nature. The overall health of the consumers of organic vegetables improves because they eat fresh, safe, highly nutritious and toxin-free food.

This model accords with the Farm to Fork Strategy of the EU aiming to make food system fair, healthy and environmentally-friendly. Our transition to a sustainable food system should be accelerated, which is solved in this cropsharing model with all its positive effects (that are highlighted in the strategy):

–          it has a neutral or positive environmental impact

–          helps to mitigate climate change and adapt to its impacts

–          reverses the loss of biodiversity

–          ensures food security, nutrition and public health, making sure that everyone has access to sufficient, safe, nutritious, sustainable food

–          preserves affordability of food, while generating fairer economic returns, fostering competitiveness of the EU supply sector and promoting fair trade

The model contributes to job creation, the farmer has a more productive and stable livelihood and the renters can enjoy all the benefits. The cooperation between them makes it even more functional and progressive.

In November 2020, a foundation was established for helping those in need. Since then a thousand kilograms of vegetables and 1700 eggs were donated for charitable purposes. In the framework of the foundation the cooperation expanded resulting in 6 new production points and the development of an educational series was started.

Evidence of success (results achieved)

 

The model started with one 450 m² farm in 2019, extending to 800 m² by 2020 and 1000 m² by 2021.  The maximum area of each farm is determined to be 2000 m², as this seems to be an optimal size considering both quality of farming, products and income. An important aspect of this model is that it is highly value-oriented that is mirrored by these limits of farm areas.

Tangibility

There are currently 6 farms scattered all around Hungary in 2021. For 2021, 200 applicants came forward to join, and ultimately five were chosen to start their businesses.

The number of subscribers is about 750 – there are around 250 weekly, 250 monthly and around another 250 one-time (there is also a test-package) customers.

Durability

MyFarm Harta plans to acquire organic/bio certification for their produce, but it requires a few years to be able to receive this certification.

The consistency of the project and its high quality in terms of vegetables and fruits produced and customer service brings repeat customers, so the base of the costumers (50%) are regular, around 25% come by personal recommendations and only 30% of the subscribers are dropping out every year. 1/3 of the costumers subscribe for weekly boxes, approximately 1/3 for monthly boxes and the rest are casual buyers. 

For those, who find it hard to cook from random ingredients a cooking show is being prepared with a famous chef to help getting ideas or some creativity.

In order to protect the produce from extreme weather conditions they have two back-up farms as a safety net. Setting anti-ice net over specific plants’ orchard can help in protection.

A mere 10% of the plants cannot survive generally, which proves that organic farming is more resistant to extreme weather events. Yet, the extremity in weather caused by global warming makes organic farming more difficult, because, for example, pest is collected by hand and drought significantly increases costs.

Visibility

Renters are welcome to visit the farm but they can also follow the progress online through a live streaming application. A Facebook group was started where members get notified about the activities of the farm, they can vote for the preferred vegetables or the proportion of the planting and they can also share ideas, tips or recipes.

The advantages of being part of this system are clearly and professionally communicated, the operation is transparent, the webpage is easily accessible, and the ordering process is simple.

Added Value

The customers are able to oversee and control every aspect of farming activities. The charity actions included also offer additional social value. External effects are kept to a minimum including distribution, as the producer supply customers directly without intermediaries.

In terms of ecosystem services, agricultural products were identified as a standalone ecosystem service. In this sense, the customers are directly paying for ecosystem services (chemical-free and ecological farming methods further underline this notion) and the customers also share some of the inherent risks, mainly weather effects, together with farmers.

This model also contributes to rural development goals by offering a complete career model to farmers.

Effectiveness

This cropsharing system is beneficial for the farmers because they have a stable financial background, while customers join to a transparent, sustainable network. The back-up gardens ensure that subscribers get their expected, regular boxes.

Innovation

No such business model was applied in Hungary so far. Shortening the supply chain by a significant margin, while involving professionals to ensure marketing and management, is a cross-sectoral cooperation leading to increasing incomes for farmers, while restoring losses of biodiversity, helping in a charity scheme and providing a reliable and trusted source of agri-food products for the customer.

Efficiency

Farmers who can join the MyFarm system are strictly selected to ensure commitment towards the values that the model is representing. Last year 5 farmers have been chosen out of 200. Professional competence matters, but the human aspect, the attitude is more important. Being a farmer in MyFarm gives stable livelihood, but, as the business accelerates, the members should contribute towards nature by planting trees and also by giving 10% of the profit for charity. (both are eligible as expense)

The crop sharing model can provide a career model, as well for those who have experience in cultivation, but not in undertaking business. As a matter of fact thanks to the community funding the farmer can start a business with zero risk. This way this system has a direct effect on the development of rural areas.

Externality

External effects are kept to a minimum due to not using chemicals, such as pesticides. The ecological farming methods applied in the farms have other external advantages clearly communicated to the customers as well.

Intra-regional coordination

According to Regulation 52/2010 of the Ministry of Agriculture and Rural Development (now: Ministry of Agriculture) on small farmers, they are allowed to sell their products in a 40km area or in their respective counties directly or by delivery as well, and in all farmer’s market in Hungary.

Based on the webpage subscribers can choose the closest MyFarm to their home or if it is not evident, the selection happens by agreement.

Extra regional impact

N/A

Quality

The management body of the MyFarm model includes economic, marketing and agriculture experts assisting farms to achieve high quality and yield, as well as high visibility. The entry as a farmer is tied to a quite high threshold both in terms of professional capacities in farming and the ability to collaborate and take part in the MyFarm system.

They plan to acquire the “organic” label, however, a minimum history of three years is required, and also this applies to all newcomers, meaning that individual farms will be able to apply for the label at different times.

Potential for learning or transfer (1000 char)

This business model can be easily applied in other regions as no special tools or highly specialized knowledge is required. Key elements are transparency and appropriate marketing, which are skills usually not confidently known and applied by farmers. Cooperation between farmers and trained economists identifying demand, solvency, providing management for farmers and for logistics can lead to increasing income for farmers and added value stemming from the transparency and chemical-free production for customers. The MyFarm scheme also includes a career model for individuals and families wishing to become farmers given that they can offer suitable land for starting their farms. Initial resources and knowledge is provided by the management body. Limitations of the market for chemical-free and organic products (obviously at a relatively higher price), and the number of farmers that the management can control in terms of quality and production should be taken into account.

Further information

https://www.myfarmharta.com/harta