How to Farm Sustainably and Make Money Doing It
Stay up to date with the latest headlines via email.
Is it possible the have a sustainable business plan and still make money? Do you want to know how to put a plan into action? Are you worried about having to sacrifice your morals just to bang out a buck? Read on.
The following is an excerpt from The Organic Farmer's Business Handbook: A Complete Guide to Managing Finances, Crops, and Staff -- and Making a Profit by Richard Wiswall. It has been adapted for the web.
A few years ago at a New England Vegetable and Fruit Conference, I presented a talk on farm profitability with a fellow farmer. He opened the talk by saying, "Sometimes I think I should have listened to my parents and become a doctor or a lawyer -- but you know, I don't think I could take the pay cut." Wow.
Here was a vegetable grower standing up in front of a room full of farmers and telling them he makes more money than doctors or lawyers. He was serious. Jolted as the audience was by that seismic statement, I knew I had a tough act to follow.
Farming conferences are terrific sources of information -- seasoned farmers share their experience and knowledge, and agricultural professionals update attendees with the latest research and news. But the overwhelming majority of information at a conference focuses on aspects of production -- how to grow crops, which seed varieties are hot, which tractors and tools increase efficiency, and pests and diseases to watch for. Very few presentations address the business side of farming.
Similarly, farming books almost all focus on production. Yet good production techniques alone will not make an organic farm sustainable. Most people go into organic farming with a love for the land and for growing food, and that love is essential to staying committed through the years of hard work. Too many farmers, however, never consider a farm's profit potential, or the various costs of production that ensure its financial health and longevity -- and all too often they burn out because of it.
Organic farms comprise many different enterprises that get averaged out financially in a year-end profit or loss. A diversified organic vegetable farm may grow forty or more different crops, such as kale, broccoli, and sweet corn. Even a dairy farm with one product, milk, has different enterprises: milk cows, heifers, calves, silage, hay, and grain. Thank goodness for the IRS. Annual tax filing is often the only reason farmers look at their bottom line; without a Schedule F, the farm's current checkbook balance would be the only indicator of financial health.
Production techniques rarely limit a farm's success; rather it is the lack of dependable profitable returns. Farmers enjoy their work for lots of reasons: sowing seeds, working the soil, marveling at the plants that grow. Fundamental satisfaction comes from producing food, working outdoors, being your own boss, and working intimately with nature. No one's motivation to farm came from the desire to be better versed in IRS employee tax codes and workers' compensation laws, or to learn about pro forma balance sheets. Yet the farming and business worlds inevitably collide, and farmers are often uninformed about the business concepts and tools crucial to navigating forward effectively and profitably.
The information that follows draws on decades of personal farming experience and my thirst for smart and appropriate business tactics. I know firsthand the joys, frustrations, stresses, and challenges of starting and operating an organic farm. Contrary to what most people believe, a good living can be made on an organic farm, and what's required is farming smarter, not harder.