Today’s small farmer climbs an uphill battle to find land, secure capital and overcome the hefty start-up costs. Today, farmers make up less than 1 percent of the population (compared to 15 percent in 1950), they tend to be older (the average age is 57) and about 25 percent are expected to retire in the next 20 years. “This is a new problem for human society,” writes Sharon Astyk, author of “A Nation of Farmers.”
It’s 1771, five years before the signing of the Declaration of Independence. John Adams has something more important on his mind: compost. He jots down a home-grown recipe that includes “20 loads of sea weed … 20 loads of Marsh Mud, and what dead ashes I can get from the Potash Works and what dung I can get from Boston,” so that he can make “a great quantity of choice manure.”
He was perhaps America’s first organic farmer. Along with Jefferson, Franklin and many of the Founding Farmers, he viewed cabbage and soil with the same reverence as inalienable rights. George Washington said of farming: “I know of no pursuit in which more real and important services can be rendered to any country than by improving its agriculture.”
Then the next 250 years happened. We’ve forgotten the words of Washington, so it’s no surprise that today’s small farmer climbs an uphill battle to find land, secure capital and overcome the hefty start-up costs. Today, farmers make up less than 1 percent of the population (compared to 15 percent in 1950), they tend to be older (the average age is 57) and about 25 percent are expected to retire in the next 20 years. “This is a new problem for human society,” writes Sharon Astyk, author of “A Nation of Farmers.”
“We have never before in human history… had to teach an entire generation of nonfarmers to farm,” she says. “But that’s the problem we face.”
So where do we get these new farmers? And how do they handle the staggering weight of costs, debt and regulation? The average new farm requires land, a barn, a tractor (which run $5,000 to $8,000 used), irrigation systems, a pickup truck, manure spreader, tools, fencing equipment and livestock or seeds. Are we talking millions? Maybe not, but there’s little opportunity to pull in massive revenue. Every $10,000 spent on a pickup, for example, takes a truckload of eggplant to break even. Commercial banks usually aren’t interested. The USDA has recognized the problem, launching a new microloan program that provides start-up financing, and organizations like californiafarmlink.org now connect farmers with capital. The goal is to give new farmers a fighting chance.
Arguably, this matters more in Sacramento than anywhere else in the nation. It’s easy to see why the city branded itself as America’s Farm-to-Fork Capital: 1.5 million acres of farmland, nearly 8,000 farms, a curiosity and appetite for quality local food and a passion to do right by the planet. But this movement also means a crop of younger, non-generational farmers who don’t look like the old cliché.
Exhibit A: Sacramento’s Brian Shaad, a sort of Renaissance man who, at age 38, already has a master’s degree in economics, spent 11 years in Africa and then four more bringing solar panels to India.
“After seeing all the money being invested into poor, developing countries’ farmers, I finally took an inward look in America and realized that we’re killing our own,” he says. “I had access to land, I had some savings and I wanted to see if it was possible to set up a new kind of business model — a small farm on the urban fringe. And that’s what we did.”
Using his grandparents’ ranching land, Shaad founded Feeding Crane Farms, which, in addition to growing things like purple okra, also has the mission of “sustaining water and soil quality, protecting indigenous plants and animals, [providing] fair treatment of workers and giving back to the community.”
Further east, in Woodland, you’ll run into Chris Hay, who, after studying Kant at UC Berkley, left the cubicle of his marketing job to work the land. He’s now the owner of Say Hay Farms.
“A lot of us are searching for something really meaningful,” says Hay, 30. “I grew up as a child of the ’80s and ’90s, with a lot of cynicism about politics and the world.” Farming seemed like the ideal contrast to something like, say, Wall Street. “I’m an adrenaline junkie, and farming gives you that. Another option might have been the military. I considered both.”
Hay and Shaad have similar financing stories. Hay tried to get a commercial loan to start his farm: rejected. He tried to get a traditional FSA loan: also rejected. So he shelled out $65,000 from his own savings, credit cards and a loan from a family member. Shaad also financed his farm without any commercial or traditional FSA loans — he poured in $90,000 from his own savings.
The more back-breaking costs, though, might be the daily grind of operations — especially when the farm is organic. Every phase of the process takes longer: Instead of spraying carrots with pesticides, you wash them by hand. The little things become big things. “Labels, printer cartridges and boxes. They cost far more than I expected,” Shaad says. “It’s between $1.20 a box to $2.70 a box, and you’re talking, quarterly, probably $2,000.”
And labor isn’t cheap, even when it’s cheap. “The real killer is worker’s comp,” Shaad says with a deep sigh. “It’s between 12 percent and 18 percent of my payroll costs. We do everything above-board and never pay under the table. As a small farmer, you can’t afford the slightest legal mishap, and this adds up.”
We’ve all heard the cheery slogan, “safety first!” And while, of course, you’ll only disagree with that if you’re Chairman Mao, it could just as easily mean “safety’s first on the list of cost-overruns!”
“I want to make sure everyone who works on the farm is as safe as they can be,” says Hay. “This means extra tools, gloves, back braces and making sure everyone has rubber boots and extra aprons.”
When you sell organic chicken, you need to fuel your birds with organic feed. (Hay cites organic chicken feed as his second biggest cost after labor.) And doing things the right way is rarely the cheap way. In an effort to be eco-friendly, some farms use back-to-the-roots “draft power,” meaning they till and harvest with oxen, horses and mules instead of gas-guzzling tractors.
“It’s a huge cost to feed those animals. If you don’t use a tractor one day, you don’t pay for gas. But if you don’t use a horse or ox, you still need to feed them,” says Rochelle Bilow, a writer friend of mine who visited an organic farm for a one-day visit and then stayed as an employee for nearly two years. (The seduction of small farming strikes again.)
An organic farmer needs to get certified, and this annual inspection can run between $400 and $2,000. This means bushels of paperwork. Even the symbolic crown jewel of the farm-to-fork movement, the farmer’s market, comes with its share of headaches. You need to haul your lettuce and zucchini, set up a stand, pay for a truck, spend hours mingling with customers and — what really hurts — divert at least one employee who could otherwise be planting onions.
So when your costs nudge north, what are your options? How do you maintain a profit cushion? Well, sometimes you just don’t.
“Nature can’t produce the demand that you require, and she takes three months to give you what you need,” Shaad says, laughing. “It’s not like a factory, where you can just punch out more.” It’s not even like conventional agriculture, where you can quicken your harvest or take shortcuts with chemicals. The land gives what the land gives. Even when you optimize all the farm-to-fork resources like community supported agriculture and farmer’s markets, and even when you crack your distribution problems (refrigeration, transportation) and even when you have steady clients like local-friendly restaurants and supermarkets — even then — you’re trapped by the hard ceiling of the crop’s yield. The math is unforgiving.
“The daily grind is overwhelming. I’m working 100 hours a week,” Hay says. “I make way less than minimum wage. My goal is to think about having kids, but it’s not really an option right now. There’s just no time for anything else.”
As if on cue, while he’s on the phone with me, Hay is interrupted by someone in the background. “We need a set of No. 12 implants!” Hay says to the guy. “And we’re going to need one more set of 90 elbow inserts. Ask them if they need glue.”
“Do you need to go?” I ask. “That sounds sort of important.”
“Nah, we’re just having trouble with the water pressure today. What was the question?”
This is today’s modern farmer. Juggling meetings, cost controls and water pressure malfunctions. On top of all that, today’s small, organic farmer has an additional challenge: regulations.
Many farmers argue that after the E. coli breakout of 2006, what began as a sensible, well-intentioned pursuit of safety has, at times, gone too far and punished the little guys. “The same regulation that affects a 1,000-acre farm is used for a 1-acre or 2-acre farm. They’re using a one-size-fits-all approach,” says Shaad. “OSHA waves a big stick that scares the hell out of everybody.”
Here’s one quick example: water bottles. To conform to regulations, Shaad needs to ensure that his workers have easy access to water on hot days. This is what civilized societies do. Except, “I have to spend $50 for this certain, exact water cooler that they require. It has to be Igloo, orange and sitting at a certain height.” He’s not permitted to simply buy a $10 cooler that functions equally well. Now, extrapolate this tiny grievance to every phase of planting, harvesting, rinsing, labeling, packaging and distributing — with scant ability to boost your revenue — and you have some idea of how organic farmers feel the pinch.
The California Farm Bureau Federation is more blunt, arguing in Ag Alert, its industry newspaper, “It’s ironic that today our government is encouraging local, organic or farm-to-fork endeavors in our communities and schools, yet the policies and regulations it develops and implements result in larger, more concentrated farms and ranches because of the extremely high cost of regulatory compliance.” Many of these regulations are sweeping and driven by Congress. (As of the filing of this story, the much-debated Farm Bill is still overdue.) But some are local. “I’d make it easier for a farm to have a farm stand on the property,” Shaad says. “It’s nearly impossible to put a farm stand in Sacramento.”
So if you’re a young farmer and want to face these daunting odds, what are your options? Historically, mom-and-pop farmers had nowhere to turn. Commercial banks had little interest in giving someone a $10,000 loan to grow potatoes.
The picture improved with California’s new micro-loan program, introduced by the USDA in 2013, which allows farmers to borrow up to $35,000. But, $35,000 “isn’t going to buy you land. Chances are, it will help you with maybe buying a used tractor or an irrigation supply or feed for your chickens or several beef cattle. It gets people up and running,” says Val Dolcini, the executive director of the USDA’s Farm Service Agency.
This helps avoid the quicksand of credit card debt, which can be just as deadly as drought or a fire. “There is now financing available on a small scale, even if you have just one or two acres,” Dolcini says. “You don’t need to be a big corporate player.”
Starting farmers can also turn to californiafarmlink.org, whose mission is to connect farmers with capital, land, credit and workshops like the “Farm Finance Expo.” Its outside-the-box programs include the Individual Development Account, which is so wonderfully and charmingly structured, it’s worth listing the terms and details: Farmers “deposit approximately $100 a month into a savings account, and those funds are matched at a ratio of 2:1 or 3:1 over a two-year period. During this time, farmers receive education in financial literacy, business planning and credit management. At the end of the savings period, the funds in the IDA account can be used to buy an important asset for the farm.”
A hundred bucks a month might sound like chump change to a CEO stewarding a $20 million brand, but when you’re on a razor-thin margin that can be rattled by water bottles, tools like micro-loans can make the difference between red and black.
“I was reaching a point where I was exhausted, without the ability to make strategic decisions,” Hay says. “Sure, my body could work for that many hours, but my brain wouldn’t function.”
Then he used a $30,000 micro-loan to invest in a fertilizer applicator, precision seeder and other tools that helped him jump from 5 to 20 acres, which allowed him to hire a farm manager to shoulder some of the day-to-day burden.
Starting farmers can also turn to resources like Farm Credit Services of America (which offers tools like short-term operating loans, crop insurance and $1,000 scholarships to students in agricultural programs) and the Local Producer Loan Program from Whole Foods Market, which offers loans from $1,000 to $100,000 and (according to its website) provides “up to $10 million in low-interest loans to independent local farmers and food artisans.”
The bottom line? “Farming ain’t for sissies,” says Dolcini. “It’s a tough job, and it’s something that requires a lot of different skills. You’ve got to be an attorney one day, an accountant the next, an environmental engineer the next and a bank-lending expert the following.”
Yes, small farms are making a comeback. Yes, farm-to-fork is making a difference. But it’s not for everyone. It’s not easy. And it’s not lucrative. Just ask Adams, Jefferson and Washington — even they had to get desk jobs.
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