Agricultural Policy Framework Newsletter - September 2007
Adding Value: Two Okanagan Orchards Reap the Rewards
As anybody who operates an orchard will tell you, selling fresh fruit as a commodity can be a challenge. Just ask Tony DiMaria and Russell Husch of the Okanagan municipality of Lake Country, B.C. They are business partners, and three years ago they were looking for ways to get more value from their apples.
They found the answer at a conference, where they heard a grocery-chain official predict that the consumer market for fresh-cut fruit was about to take off. The partners’ subsequent research confirmed not only that the takeoff was happening, but also that the market was expanding by 20 to 30 percent annually. On that evidence, establishing a fresh-sliced fruit operation seemed the perfect way to add value to their commodity. But they needed financing to set it up, which meant they had to develop a convincing business plan that they could show to potential lenders.
At this point, fortunately, Husch and DiMaria found out about the PAVE program, part of the Agricultural Policy Framework. PAVE, which stands for “Planning and Assessment for Value-Added Enterprises,” will fund up to half the cost of hiring a business professional to help with specialized planning for a value-added farm project. “We heard about PAVE through the BC Fruit Growers’ Association,” says DiMaria. “They told us it would help finance our business study and our business plan, which sounded like a pretty reasonable deal. And it was, because PAVE saved us half the total cost of the consulting services we received.”
DiMaria says that neither he nor Husch had ever gone through such a rigorous planning process. “It was quite an eye-opener. We worked with our consultant to put together a mission statement, a market study and a business plan, among other things. You sometimes wonder, while you’re going through all this, how useful it actually is.
But as things move along, you realize you need to answer all these questions in advance. It helped a lot to be working with somebody who knew what questions to ask and how to lay out the map we needed to follow. The result was that we ended up with an excellent business plan, which was what we needed to take to the bank.”
It all worked out, and the new company, Russ and Tony’s Fresh Sliced Apples, was in business. With their financing approved, the partners could now lease a building, buy their equipment and cover their start-up costs. “We’re now in our second year of operation,” says DiMaria, “and business is expanding. We’ve already outgrown our first location and we’re moving into a second building we purchased in July. The overall experience we had with PAVE was very good, and I’d definitely recommend the service to any horticulturalists looking for ways to diversify.”
Is PAVE for you?
You may be eligible for Agriculture and Agri-Food Canada’s PAVE Service if you have an established farm operation with at least $10,000 in annual gross sales, or if you’re a beginning farmer with an expected $10,000 in annual gross sales. You could receive funding to cover up to 50% of your eligible costs, to a maximum of $10,000, when you hire a business professional to help you prepare a business plan or feasibility study for a value-added farm project. Groups can apply, too, with potential funding of up to $25,000 for three or more participants.
To find out more about PAVE, please visit Agriculture and Agri-Food Canada’s Renewal website at www.agr.gc.ca/renewal or call 1-866-452-5558.
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