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Issue 2: Community Scale Economics

Innovation and Experimentation: Annex Organics/ Field to Table, Toronto, Ontario

by Chris Lazarus

A relatively new, rapidly evolving, and highly diversified project in Toronto illustrates many of the trends and truths in urban agriculture - the need to collaborate with non-profits, the dedication of one or two key people, the micro-scale of results, and the ability to improvise and quickly adapt to meet challenges and changes.

Started in 1996 with the idea of creating a for-profit agricultural business on marginalized urban land, Annex Organics was a natural match for Field to Table, a non-profit with a variety of programs designed to increase community access to affordable, nutritious food. (Field to Table, which has a kitchen incubator for food product entrepreneurs and a catering business, is a project of FoodShare, a Toronto-based community food security non-profit.) From the beginning of the relationship, the two-woman operation of Annex Organics has paid no rent to use a small percentage of Field to Table’s warehouse, as well as space on the warehouse roof, where a rooftop garden and greenhouse are located. It also uses, at no charge, Field to Table’s vehicles for deliveries. As of January 1, 2000, the nature of the collaboration between the for-profit and the non-profit changed. Field to Table bought Annex Organics, which will continue to function as a business within the non-profit.

“It’s hard enough to make money growing food if you’re an ordinary farmer, without all the challenges we face in an urban evironment,” says Lauren Baker who, together with Tracey Loverock, nurtured Annex Organics to become the business it is today. “The only way to succeed is to make partnerships so you can keep overhead low.”

Annex Organics sells some of its heirloom vegetables, herbs, and sprouts at market value to Field to Table’s Good Food Box program, which every month packs 4,500 boxes of varying sizes in the warehouse and delivers them to paying customers in daycare centers, apartment buildings, and churches. The box’s low price pays for the nutritious food (most of which comes directly from growers), but distribution costs are subsidized by Foodshare. Annex Organics also sells to restaurants, health food stores, co-ops, and at a farmer’s market. All of its products are certified organic.

In addition, Annex Organics started another project, growing and selling vegetable and herb seedlings and supplies, including compost, to urban gardeners. This seedling and supply venture has been spun off as an independent business, Urban Harvest, and is now managed by Baker, Loverock, and two partners. Baker will also continue to work with Annex Organics /Field to Table in a newly developed urban agriculture program.

The most lucrative activity has been growing sprouts, which account for 90% of food growing revenues. Baker and Loverock had originally hoped to fund their business strictly through food production. But early on, another income-making opportunity presented itself: Field to Table paid the two entrepreneurs to put on workshops and train volunteers and at-risk youth participating in a federally-funded job skills program. Every six months, they teach 16 young people about gardening, food production, and marketing. “Most of them will not go on to get jobs in this area,” explains Baker. “They are learning life skills in this training program. But some have gone back to school and studied horticulture.”

A few alumni of the urban agriculture training program have been hired to take over or start up Annex Organics/Field to Table projects. One young woman manages the greenhouse and sprouting operation. Her salary is covered by food-growing revenues. Field to Table also hired a young man who completed the training program and bought him the necessary supplies to build a mushroom hut - the next experiment for Annex Organics. It is hoped that mushroom sales will generate enough revenues to make the hut enterprise self-sustaining - and that the young man can eventually start his own similar business.

Both the non-profit Field to Table and for-profit Annex Organics are eager to experiment and tinker to find answers. “Other entrepreneurs might focus on only one business,” says Baker. “Tracey and I knew we wanted to innovate and experiment with a variety of things. When the sprouts operation reached a certain size, we decided that rather than expand it, we’d move on to develop the next project - the greenhouse - to the point where it can stand on its own and be run by someone else. We’re interested in the model of microenterprise within the context of a larger project.”

All these experiments complement each other and model a closed urban cycle, Baker points out. Compost is made from scraps from Field to Table’s food box program and incubator and catering kitchen, and the compost is used in soil mixes. Rinse water from the sprouts contains valuable nutrients and acts as a fertilizer for herbs, vegetables, and seedlings.

Before the purchase by Field to Table, Annex Organics was able to pay for two full-time salaries and casual labor, but only because of consulting revenues, that contribute half of the company’s income.

Although Baker admits that community economic development will always be dependent on grants and that Annex Organics is “a labor of love,” she is adamant about the need to keep things on a business footing. “Even though we are under the umbrella of a non-profit, we continue to sell food essentially to ourselves. Where people go wrong is when they lose track of expenses, revenues, and market values. You need to know that it makes economic sense to grow food.” --

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