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Walmart grows ties with local farmers

Retailer also plans new eco-ratings of all its products

Article from The Tennessean

By Clay Carey

That cucumber at Walmart might have come from the farm down the street. Or it might have come from another country.

Right now, it's impossible to tell. But under a new program announced by the world's largest retailer Thursday, it will soon be a little easier for buyers to know the difference.

On the same day that it rolled out broad new plans to develop eco-ratings for all the products it sells, Walmart joined the state's agriculture commissioner to present plans to stock more locally grown fruits and vegetables at its Tennessee stores.

"It's very important to us to provide as much locally grown (food) as we can," said Josh Cotton, a Walmart manager who oversees 11 stores in the Nashville area.

About one-fifth of the fruits and vegetables in a typical Walmart come from in-state producers, though company officials could not say how much that will increase under the new program.

They did say the move would reduce auto emissions created when trucks haul produce over long distances, and provide more business opportunities for local farmers. It also is designed to appeal to customers who are increasingly interested in buying local food.

"It definitely is important. We need to keep our money here and buy local things," Nashville resident Dianne Jaynes said as she picked through a bin of tomatoes at a Walmart on Nolensville Road. Over the bin hung a sign promoting the tomatoes' Tennessee roots.

State Agriculture Commissioner Ken Givens said the announcement is promising for Tennessee farmers. "If Walmart can help us sell it, I guarantee we can grow it," he said.

Others, like agricultural economist John Campbell, are unsure how many small farmers will see a benefit from the company's new effort.

"Any opportunity for farmers to be able to move more local produce is going to be beneficial to them," said Campbell, a farm management specialist with the University of Tennessee's Institute of Agriculture.

But when small farmers negotiate with large retailers, he said, they sometimes find that the prices they are offered come in too low. He said companies sometimes ask farmers to sign up for costly liability insurance policies, and retailers are often looking for volumes that smaller farmers can't produce.

Will sustainability sell?

On a broader scale, Walmart hopes a new effort to develop sustainability ratings for its products will have an impact far beyond its own stores.

"We see this as a universal — this is not a U.S. standard," Walmart Stores Inc. President and CEO Mike Duke told a gathering of more than 1,500 suppliers, nonprofit groups and company staffers at the giant retailer's headquarters in Bentonville, Ark., on Thursday.

Walmart's massive size gives it tremendous influence among makers of all kinds of consumer products — muscle that gives its effort a chance for wider adoption that other retailers might not have. The move also comes amid discussions on Capitol Hill about the possibility of U.S. environmental labeling regulations.

Shoppers won't see green ratings on products for several years, and how much stock consumers put in the ratings is an open question.

Walmart will send suppliers a set of 15 questions about corporate sustainability, Duke said. For example, the questions include "Have you measured your corporate greenhouse gas emissions?" and if the supplier has, what those figures are.

The company will make the information available to customers, boiling it down in the form of index numbers to tell customers about the sustainability of a product that they're purchasing.

As details about the sustainability effort emerged on several Web sites this week, questions were raised about costs.

"Suppliers are going to have to absorb the cost increases," retail industry consultant Burt P. Flickinger III said.

However, Walmart focused Thursday on the possibility that development of the sustainability program would ultimately result in greater production efficiency, actually lowering costs.

Farmers differ on profits

In Tennessee, Zalen Williams said Walmart's move "definitely will mean more profit" for his Grainger County farm, which has sold tomatoes, squash and other vegetables to Walmart through a distributor for the past eight years.

"It could change the amount of what we are growing if we are able to sell more," he said.

But the average Tennessee farm is about 130 acres, half the size of Williams' land. Givens said it could take some smaller farmers years to produce crop yields big enough to feed local Walmart stores.

Rutherford County vegetable farmer John Erdmann doubts he'll be doing business with Walmart, or any other major grocer, in the near future. When he goes into the big stores and sees their low prices, he wonders if he'd make much of a profit as one of their suppliers.

"Am I going to get a fair dollar from Walmart, especially given their reputation?" Erdmann asked.

Company spokesman Dennis Alpert said he hopes the new effort alters the view of the retailer as the enemy of small local businesses.

"Sometimes your reputation precedes you," Alpert said. "We hope things like this will change that reputation."

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