The Atypical, Unfair Economics of Farming.

Q : How do you make a million dollars farming? A: Start with 4 million!

As far as business models go, none is as bizarre as farming. There are very few winning formulas. It’s either large scale corporate agribusiness (which has its fair share of hidden costs) or struggling small-scale mom-and-pop operations. There really is no middle ground. It’s feast or famine, so to speak.

The reality is our food system is broken and has been heavily subsidized since it became a transportable industrialized commodity. The sticker price on food rarely reflects its true value. Farmers markets offer a more equitable price point, but the math still rarely adds up.

Competition in most sectors is healthy to keep businesses up to date and prices in check. In farming, it’s devastating. Huge mechanized monocultures, using underpaid labour, utilizing relatively cheap petroleum for fertilizing, harvesting and transportation are no match for a local farmer growing the natural way. Throw in crop insurance, subsidies, GMO’s and shareholders and it’s a lose-lose for both sides. One model is unsustainable environmentally the other is economically unfeasible. It’s a David vs Goliath scenario. That’s why the local, organic and fair trade movement has developed to help level the playing field of this uphill battle. The disparity gap is massive.

When I asked for something  pricey, my mother always said “Money doesn’t grow on trees.”  Eventually I proved her wrong, but she had a point. A fruit tree, for example, may not bear a sizeable crop for 8-10 yrs. During this time it will need annual maintenance and constant care. Same can be said for the fence that protects it, the irrigation system that waters it and the root cellar to store the fruit. Everything is a long term investment. It is said you plant “pears for your heirs.” I call my  fruit trees my RRSP’s.

So why would anyone even attempt to become a farmer?

Passion, sustainability, and the romantic notion of working with nature in the outdoors are all good reasons.

Yes you can eke out a living like the pioneers did, but with today’s expenses, it’s hardly a get rich quick scheme. Most thriving farms either started out small and slowly grew within their means, such as in my case, or they were inherited complete with infrastructure. Other options are leasing land, buying into a co-op or renting out your land and hiring farm hands while you work your real paying job.

The big dilemma surfaces eventually: Do you stay small, subsist and struggle, or do you invest large and go big, making it even more risky. Either way is tough and requires  hard work… Almost all will need winter employment and additional sources of income. When doing our books, I often get discouraged. My wife has to remind me sometimes we’ve chosen a lifestyle not a career.

Can you imagine going to the bank and asking to borrow money for a farm start up in Pemberton with your list of capital projects and expenses? A couple million for the land and a couple more for housing, outbuildings, power, irrigation, equipment, supplies etc. That doesn’t even include the operating costs such as labour, permits, insurance, taxes, fuel, tools, amendments and general overhead.

Now you have to explain that you’re going to sell your produce at a few dollars per pound, provided the weather and other environmental conditions co-operate. Our short growing season rarely offers a second chance. Over half the year brings in little or no income. Every concept is risky. Almost everything is perishable with a short shelf life. Now you have to market your goods. Do you get a fair price toiling away a couple days a week at farmers markets, drive all over delivering to restaurants, or do you succumb to the middle man and sell it at a discounted wholesale price? The middle man can make as much or more on the transaction alone. Any potential investors out there interested yet? I can picture the Dragons tearing a strip out of that business plan.

So how on earth does one make a living farming? Hard work and determination is needed, but still won’t guarantee success alone. Diversifying, simplifying, creating a unique niche market, marketing, networking, packaging, bartering, preserving and value-adding your harvest into products is really the only way to justify small scale farming. Farmers should spend as much time in the kitchen, office and garage to be successful. Reinvesting, organization, maintenance and long term planning are essential.

There is a relatively new category of farmer that seems to be proliferating: “Le Nouveaux Riche Fermier.” They are recognized by their huge mansions set in the middle of the field, a long tree lined paved driveway with a large elaborate locked gate. The obligatory white picket fence, brightly painted barn and shiny tractors. The owners are rarely seen outdoors and never with dirty fingernails. It’s often hard to see what they’re doing from the road. So what are they cultivating anyways? Tax breaks and the right to brag that they are trendy farmers at the country club, I suppose. If you assume all that bling was acquired through farming, you’re fooling yourself. It’s a false front.

Just because you can afford to buy a farm doesn’t automatically make you a farmer. They are actually taking away usable land and degrading true farm culture.

If you’re in it for the money, you’re literally wasting your time. There is not a single small-scale farmer that tracks their time and would ever attempt to calculate a wage. For them, their lifestyle is priceless. There is no point in tying to make sense of the economics. You work your ass off and hopefully reap something from what you sow.

So the next time you wonder why that pineapple from the Philippines is cheaper that those local grapes at the farmers market, just remember your comparing apples and oranges.