[blockquote cite=”Philippe Choiniere” type=”center”]”It’s a beautiful time to be alive and in business right now because we have a chance to redefine the future.” [/blockquote]
Farming, is it profitable?
This is a big topic on this show and within the growing regenerative agriculture and permaculture community.
It isn’t enough to create systems that are ecologically sustainable, it comes down to down can we create agriculture systems that are beyond sustainable both on the land and financially.
This topic of farm profitability even made its way into the NY Times this past Sunday, August 10, 2014 in an op-ed piece by Bren Smith. Titled “Don’t Let Your Children Grow up to Be Farmers,” Smith contrasts the romanticism within the foodie community around small scale farming to his perception about the reality of small scale farming – low income, doesn’t pay, stay away.
Smith introduces the topic saying,
“The dirty secret of the food movement is that the much-celebrated small-scale farmer isn’t making a living. After the tools are put away, we head out to second and third jobs to keep our farms afloat. Ninety-one percent of all farm households rely on multiple sources of income. Health care, paying for our kids’ college, preparing for retirement? Not happening. With the overwhelming majority of American farmers operating at a loss — the median farm income was negative $1,453 in 2012 — farmers can barely keep the chickens fed and the lights on.
Others of us rely almost entirely on Department of Agriculture or foundation grants, not retail sales, to generate farm income. And young farmers, unable to afford land, are increasingly forced into neo-feudal relationships, working the fields of wealthy landowners. Little wonder the median age for farmers and ranchers is now 56.
My experience proves the trend.”
Smith isn’t a profitable farmer, and based on his experience farming doesn’t work; with the statistics supporting his position.
Now if we as a community are trying to get more permaculture onto the land and into more regenerative systems, then lack of income to the farmer is a problem. A problem we need solutions for. But this is where Smith’s article falls short. He goes on to suggest that the solution lies in a framework of farmers taking some control back. An idea that in and of itself makes some sense, but not so much sense in the way that it is presented by Smith…
“But now it’s time for farmers to shape our own agenda. We need to fight for loan forgiveness for college grads who pursue agriculture; programs to turn farmers from tenants into landowners; guaranteed affordable health care; and shifting subsidies from factory farms to family farms. We need to take the lead in shaping a new food economy by building our own production hubs and distribution systems. And we need to support workers up and down the supply chain who are fighting for better wages so that their families can afford to buy the food we grow.”
While creating food hubs and distribution systems makes sense, trying to vie for legislation to solve the problems is a non-starter. Trying to say that student loan debt and health care costs and rich farmers are some of the main reasons for farming failing is a weak argument in my opinion; and unfortunately ones that will get a lot of eyeballs with this article being in the NY Times.
Smith is calling for collective action. And that may help down the line. But if you are farming right now, what should you do now? Start organizing social movements? That doesn’t help your bottom line tomorrow or even move you in the direction of helping your bottom line in the future. That is why in my opinion Bren Smith is going at it all wrong.
Instead of trying to legislate away problems, why not pursue strategies that can directly affect farm profitability today? Strategies that can be used on any farm, any size, anywhere? That immediately empowers farmers.
Let’s start looking at the models that are being employed and make them more competitive in today’s real world.
Let’s take the broken farmers market models and broken CSA models and look to improve and fix them.
Forget subsidies and legislation. Let’s put in some time to analyze what is working and what isn’t? Any farmer can do that with a laptop at their kitchen table.
The better approach to farming is approaching it as a business owner, and not just a grower.
We are now in a highly competitive global agricultural marketplace and old models may not work anymore. We are in a social economy now where people have more choices than ever about what to buy and who to buy it from. So it is now in part about thinking of ways to produce products that are unique and valuable. Taking something ordinary like some herbs or a tomato and thinking about ways to value add to these products. It is about thinking of the farm as a family of income generators all contributing to the bottom line.
It is no longer just about being a grower in the traditional model.
When you use a traditional agriculture model in today’s global agricultural market, you are in a losing battle. Organic or not, you are competing solely on price. Think about it. What difference is there between an organically grown apple from NY, Italy, or Washington? Not much. And when there isn’t much difference in the uniqueness of the product it becomes a price battle and that is a race to the bottom.
As my guest on today’s episode Philippe Choiniere says of his parents who sold into this commodity apple market, “they were raping the land and getting raped by the packers.” Selling a crop raised conventionally into a commodity system, resulting in thin margins and getting paid months later.
If one of the losing models is known to be growing and selling commodity crops that aren’t unique, why not flip that problem around and create products based on the farm that are niche and unique?
Why not start connecting with customers and sharing your story? Then create products specifically for those types of customers. Those products typically have higher margins and are often times separated from the land; in essence they pull product up from the land to the value add product itself in the form of ingredients. This pull from the top model is a model that is no longer about growing crops and figuring out how to sell them. It is about building a brand that comes to the farm needing to buy raw materials to support the brand. And that is what I am talking about today with Philippe; building an off farm brand that has the power to pull products up from the farm.
But, there is a catch here, it is hard. This isn’t showing up at a farmers market and trying to sell something. This approach involves a lot of time and effort to build a community and a brand; work that may not pay off for a long time, if ever. But when it does work out it can change the farm dynamic.
That is exactly what Philippe experienced when he put in the hard work of over the last five years building a brand with his wife. Together they created Oneka organic body care products. It is a brand that derives organic and wild harvested herbs from their farm in Quebec and uses them as raw materials for their off farm products. This adds value and creates a business that is separated from the land itself, something that Philippe will touch on.
This is a real story, about a real farm based business, that is now profitable. In a world filled with reasons why things won’t work and with stories about why your children shouldn’t grow up to be farmers, this is story about why they should.
Philippe’s story is another story about what is possible. He will tell you that anyone could do this, he wasn’t unique, but it does take hard work and time. But that’s the nature of farming. In an industry where the median farm income was negative $1453 in 2012 you can decide how your time is spent.
Re-Thinking Farm Products. Creating a Brand that Needs Ingredients from the Farm with Philippe Choiniere….
- Take products closer to the end consumer, add value, build equity outside of the farm itself.
- Permaculture gives you marketing on the top end and production efficiencies.
- Look at the top down model. Build a brand or product and come to the farm needing ingredients that can be grown. Versus being a farmer, growing stuff, and saying how can I sell this.
- Telling your story gives you a differentiation factor, an edge.
- There is a huge amount of value in bringing people to the farm. Think and possibly look to model vineyards. Agrotourism becomes an asset, a marketing tool.
- Have key mentors. Smart, experienced people that can help to kill an idea right away or expand on it.
- Have an honest and authentic message. Don’t be shy about communicating why you are different.
- “First I will take my products further in the process, closer to the end consumer, and I am go to add value to whatever I produce. That way I can build equity outside of the farm itself.”
- “It is easy to say no to something, but what are you saying yes to?”
- “It’s a beautiful time to be alive and in business right now. Because we have a chance to redefine the future.”
- “I think the most powerful thing we can do is to be examples of how it can be done differently.”
- “The big problem right now is not having a lack of opportunities; it is having too many and which ones to focus on.”
- “The energy of a farm is a lot different when you are pulling from the top. I need ingredients now, I need raw materials now, and I have the farm so I’m going to grow it.”
- “Instead of trying to grow what is being sold, why don’t we try to become better business people and then create new products and markets?”
- “Whatever we focus our energy on, we will add value to it. Otherwise it’s not worth doing.”
- “Always look to add value. Once you start thinking value add, the doors become so much bigger.”
Going into Retail Sales:
- Make a lot of phone calls.
- Build relationships and get to know people.
- Get the product out there as much as possible for people to try.
- Be receptive to feedback and ask for it. Especially from store employees because they see a lot of products and customers.
- Focus on getting the branding right.
- Have a high quality product to start with.
[blockquote cite=”Philippe Choiniere” type=”center”]”It is easy to say no to something, but what are you saying yes to?“[/blockquote]
Oneka Organic Herb Farm
Joel Salatin on Economically and Environmentally Sustainable Farm Businesses
Organic Valley: Who We Are
More information on Philippe and Oneka:
You can contact Philippe and Oneka HERE.
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