Moving On

To follow up a little bit, I'd like to answer one of the comments on a previous post.  Here's an excerpt:

In my neighborhood, every farming operation is a company of one sort or another (mostly "S" corps), but that does not mean neighbors don't help neighbors, no one cares about schools or public health, labor and environmental laws are ignored, etc. In my company, we provide paid vacations, pensions, health insurance, and (in some cases) housing. That allows us to attract and keep reliable employees, who are more than menial "hired hands"

I don't know the circumstances of the farm the commenter is referring to, but it sounds like a decent compromise.  Many farmers have little interest in selling at a farmers market or even being involved in a CSA.  And many despise marketing, be it produce or corn.  And benefits are always an enormous difficulty (we're working on that).  So if those services can be provided for them and still allow them to remain on the land, that sounds OK to me.  However, there must be ways to ensure that relationship doesn't end up as an exploitative share-cropping sort of thing, but I'm sure that can be worked out.

But as I mentioned before, this is not the sort of arrangement that built the rural Midwest.  In the John Phipps blog post I linked to yesterday, he makes the argument that the "family farm" is a relatively new development, and there is no guarantee it is even the ideal form of ownership.  I would argue that all evidence of the last 60 years points to the fact that family-scale agriculture is better for rural communities.  But that evidence is not a reason to ignore the fact that there may be alternatives.

In fact, depending on your definition of farming, in many ways the small farmer growing for a value-added market is the true farmer today.  If you want to see some on-farm innovation that provides a return to the farmer, look at small farmers.  Most of the innovation in conventional farming today is in marketing (forward contracting, hedges) or technology (autosteer, GM seeds).  That innovation does not come from the farm, and increasingly such innovation simply creates a higher return for the input producer, not the farmer.  Sustainable agriculture, on the other hand, thrives on on-farm experimentation and innovation.  Sure, small farmers have to market, etc- but small changes in farming practices can have an enormous impact on profitability, often because value-added agriculture has a high return precisely because it pays the farmer for labor and knowledge.  More labor and more knowledge equals more profit.

I suspect that what we're headed right now is a sort of dual system of agriculture, with commodity production on one end and very small farms focused on high dollar per-acre (or animal) on the other.  I also think the commodity grain production industry is headed towards the vertical integration commonplace in the livestock industry.  Already more and more farmers are contracting directly with processor, entirely avoiding grain elevators and the Chicago Board of Trade marketing system.  For those of you familiar with what has happened to independent livestock producers, you know this is not a good thing for farmers.  But it may be the easiest way to manage risk and debt in the short term.  In the long-term, it will spell the death of the independent family farm as we know it.  Some might say that sort of thing is inevitable.

Not only are some small farmers and sustainable agriculture activists fine with this dual system, they actually welcome it.  They're "building the alternative system" for when the "industrial ag system collapses".  Uh huh. Let me clue you in:  the industrial agriculture system may be unsustainable, but it isn't collapsing.  Not by a long shot.  There will always be a need for #2 yellow corn to feed hogs.  And if anyone wants proof industrial ag is here to stay, look at the Farm Bill that just passed.  Industrial ag got just about everything they wanted.  And if industrial agriculture prevails in Upper Midwest, I despair over the future of our small towns.  Building altnerative/sustainable agriculture is incredibly important, but don't expect us to just up and roll over when people talk about the inevitability of industrial agriculture's "collapse".

And even if industrial agriculture is headed for some sort of meta-collapse, is this really something we should be embracing?  "Collapse" pretty much implies ecological and social devastation, and from where I sit that isn't a good thing.  Who do you think will bear the brunt of that devastation?  I am sick and tired of hearing sustainable agriculture activists tell me I shouldn't worry about farm programs because in 20 years the corn and soybean industry will have "collapsed" and we'll have entered some golden era of small farm production (I'll admit this is a bit of an exaggeration, but not by much).

For my money, there are two people I listen to over everyone else:  John Phipps and Tom Philpott.  John Phipps is a industrial farmer and not afraid to admit it, and knows where commodity agriculture is headed.  He certainly isn't hanging on to the family farm victimhood model that is unfortunately present among some industrial farming operations (disclosure: I've probably contributed to that at times).  Tom Philpott is willing to say the real truth about sustainable agriculture:  if we want any sort of real percentage of our food to produced in a sustainable, humane fashion, we must invest in processing capacity and we're going to have to have a lot more farmers.  Read them, and you'll get a very good idea of my preferred policy solutions.

It's axiomatic that all

It's axiomatic that all commodity prices revert to just over the cost of production, over time. There will be periods of disjunction, but when you think about it, Mr. Market is constantly matching supply with demand...for commodities, like HRW or #2 corn. Anything a grower, large or small, can do to make their products more than that (a celebrated vineyard is a good example) puts control more on the producer's side. That's where smaller outfits can succeed, provided they have access to capital and know what they're doing.

Like restaurants or publishing, agriculture is a big industry, with lots of co-existing paths to success or failure. If we just treat each other and the earth with a little reverence and respect, it's suprising what we can learn from one another.

 

Good points...

Certainly commodity prices and cost of production meet up in the long run, but it is also interesting to note how that relationship appears to work in both directions. High commodity prices usually translate into high input prices, but the reverse doesn't always seem to be true. There's many factors at play and I don't pretend to understand them all.

It's also true that getting out of the commodity trap is a key to profitability over the long term. And that holds enormous promise for smaller farmers. And to be very honest, many farmers large and small simply have no interest in doing so. They should, because they are getting away from what the business spirit of family farming has been historically- innovation and entrepreneurship. Instead innovation and entrepreneurship only occur within a business model that dooms small scale production.

However, there are real barriers to small-scale production that create a legitimate need for government intervention, and those barriers often make it seem impossible to succeed. That is much of what Tom Philpott discusses when looking at processing capacity, etc.

It's probably evident that I am torn on this subject. Many farmers need a swift kick in the ass when it comes to embracing competition and innovation. But the system they've been in for decades does little to reward that competition and innovation, and in many cases actively discourages it.

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