Farmers markets and advisory councils: 5 questions to consider

Farmers markets can benefit from the creation of an advisory board

Creating an advisory board for your farmers market can be beneficial because you can use the power of many good minds to help you make decisions about your market and how it will operate. This also creates a clear process for the creation of policies to guide your market and gives people a valuable opportunity to support your market. Michigan State University Extension can offer some advice to farmers markets looking to improve its operations. 

1. What organization or municipality oversees the market? Where would the authority of the committee originate from? 

Farmers markets are often operated under the umbrella of a municipal government or a community organization. The Michigan Farmers Market Association recognizes that there are many ways markets are organized through a local government: city, township or county government (or Downtown Development Authority) and operated within one of the government departments. For example, a farmers market could be a part of the municipal or county department of parks and recreation. Other markets are organized under a civic organization or a community-based non-profit organization such as the Convention and Visitors Bureau or local Chamber of Commerce. Some farmers markets have become their own non-profit organization that hosts vendors. 

Still, other markets are operating independently as a limited liability corporation (LLC) or as a private business with an owner. Why is this distinction important? You need to have an idea where the authority for the market originates and think about what decisions will be made by the Advisory Board and what decisions will be made by the larger organization or government. 

If your market is a non-profit, you still have to follow the guidelines for non-profit organizations as outlined by the Internal Revenue Service. Remember, non-profit doesn’t mean untaxed. Instead, it creates a limited exemption for specific exempt purposes including:

“charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.  The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.” (From IRS website outlining section 501 (c) (3))

Your organization will still have to file income taxes with Form 990 with the Internal Revenue Service. 

2. What will be the purpose and purview of the Advisory Committee? 

The Charter should outline the purpose of the Advisory and where their decisions will come into play. Some tasks accomplished by the Advisory Committee may include, but are not limited to:

    • Recruitment of vendors and approval of vendor applications;
    • Setting vendor rates and fees;
    • Overseeing project budgets for the market;
    • Creating rules and regulations for the market vendors, volunteers and visitors to the market; and
    • Advocacy for the farmers market within and outside of the local government or organization overseeing the market. 

3. What is the relationship between the organization giving oversight and the Advisory Committee? How will members be appointed/elected/selected for service?

This will affect how representatives are selected to be part of the Advisory Committee. Will the members be appointed (If appointed, by whom?), elected (If elected, by what process? Who votes?), selected (Is there an application? Who will make the selection?)? What is the process by which people will be on the Advisory Committee? Do members have to represent different sectors of the market business – for example are there a certain number of seats for farmers, food businesses, or artisans/crafters? How many seats will be reserved for the organization sponsoring the market (if there is one)?

4. How many members will be on the Advisory Committee? Who serves on the Advisory Committee? What are the terms of membership? Will there be term limits?

What kinds of input would be valuable to growing your market? It is a good idea to have representatives of different professions and perspectives. For example, consider recruiting an accountant or an attorney who can give you good advice about how to handle problems that might arise and possibly prevent problems from occurring. Including vendors is recommended because they have a valuable perspective and their livelihood is tied to the success of the market. You may also consider whether seats be reserved for customers, members of the community, or representatives of the organization or local government.

5. How will the Advisory Committee operate their meetings? 

Consider if you want to have someone take responsibility for running meetings and if you will meeting notes or minutes of these Advisory Committee meetings. As you think through this process, you may encounter other questions about terms of service, removal and more. Take time to craft policies and amend your organizing documents so all members are clear about their membership, purpose and responsibilities.

Some questions you may want to consider are:

    • Do you need more than a charter, such as by-laws? By-laws usually govern the operation of the committee and outline the responsibilities of the committee.
    • Will you follow Roberts Rules of Order, or have another process for meetings?
    • How often will the Advisory Committee meet? Weekly, monthly, or quarterly?
    • Will there need to be officers of the Advisory Committee, such as a chairperson or a secretary?
    • Will the vote to approve things be majority rules or a two-thirds majority? When can a decision be revisited by the Advisory Committee?

In addition to these considerations, be clear about the way the committee interacts with the sponsoring organization, if applicable, and where the liability lies for the decisions and recommendations of the committee. Liability coverage is available for purchase by non-profit boards or a sponsoring organization can extend their general liability coverage to indemnify the committee. Consult a professional about your organization’s exposure to liability and how insurance coverage can be purchased to reduce that exposure.

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