Three Essays Analyzing the Pricing of a Community Supported Agriculture System

The current landscape of small farms is approaching a major shift as more and more small farms are poised to come onto open marketplace around urban areas. A different farming business model called Community Supported Agriculture (CSA) has been utilized as new way for farmers to potentially earn above average revenue. However, small farmers still feel dissatisfied with their overall farm income, but when implementing the CSA business model the producers do feel that the CSA enhances their overall income satisfaction. Three essays were developed to examine this predicament. The first essay examined possible economic pricing models that a CSA is espoused to operating under, a multiproduct club good and monopoly. Utilizing these theories and data collected from prior research, I postulate that the CSA business model is not operating at the Pareto equilibrium because producers seem worse off and the shareholders are better off. The solution to this equilibrium problem seems to be two fold. One is that the producer is acting inefficiently and needs better control of their production and distribution. Second, the true cost of the product is not being communicate as espoused by CSA business model concept. Increasing efficiencies and fully communicating all costs to the shareholders are needed so that the correct consumers\u27 willingness to pay can be revealed and the Pareto optimal be achieved.;The second essay constructs and illustrates a mathematical model implemented by the gardening by the square foot method and expands it so that it can be applied by the CSA farmer. Comparing this planting method to other CSA row cropping models, the needed square footage for growing the need harvest can be reduced by 80%. Although the land needed is drastically decreased using this cropping method, labor costs have not been evaluated and field studies still need to be conducted. Also, this technique now segregates the shareholders production area from other production areas on the farm. This not only allows a CSA producer to better detail their specific production cost per shareholder but also has the advantage of allowing for more exclusion required to exert more monopoly or club good power, thus possibly correcting the dissatisfaction of producers\u27 personal income as described in essay one.;The third essay discusses the results of a survey, e-mailed to 673 producers listed on the USDA CSA website. The results of this survey were compared to previous CSA producer surveys and shows that not much has changed in the demographics of the CSA operations across the U.S. Using survey and census data, a linear regression econometric model was developed to explain full share pricing at CSAs. Five variable coefficients were found to have large impacts on full share prices. The variable of CSA farmers participating in other marketplaces had a negative impact of {dollar}294.62. When farmers used prices of other CSAs in their pricing, share prices were {dollar}120.82 higher. The preparation of the CSA harvest for distribution was found to have a negative effect on the price with a coefficient of {dollar}232.83. The factor of the management and labor of the family and shared risk coefficients were positive {dollar}226.45 and {dollar}169.65, respectively. Finally the weeks of harvest was positive with a coefficient of {dollar}12.38. All these variables were found to be significant at the 1% or 5% significance level. However, many other non-monetary attributes espoused in the literature as reasons for a producer choosing the CSA business model, did not have any discernable impact on pricing. More research is needed to clarify the value of these non-market items