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My Small Farm Economics

My Small Farm Economics

Economy of scale – a term often used in the business world, even in the small farm business world. I remember taking a class in Farm Accounting and CSA Business Planning and being introduced to this concept. As I understand it, economy of scale is the idea that a business enterprise makes the most sense at a certain size; the connotation being that businesses that don’t fit the model will not be financially solvent. I always took issue with the idea of an economy of scale as it relates to small farms. I understand that from a financial perspective, it may hold true. And yes, small farms are subject to the pressures of financial in/solvency as is any other enterprise. But if we look deeper, perhaps economics are not quite so cut-and-dried on the farm as they are in the conventional marketplace.

In my own experience as a small-scale farmer, and also amongst the farmers I know, much of a small farm’s economy actually happens in trade. When I was in the business of selling produce at farmers’ markets, I used my produce as currency to trade for many other types of goods at the market – i.e. cheese, fruit, crafts, eggs, etc. I often received extra produce for animal feed from fellow vendors at the end of the market, and although they didn’t expect anything in return, we’d often send over a package of bacon in thanks.

Beyond the farmers’ market, the business of trade is still a part of my daily farm life. I work on a ranch whose business is breeding Alpine dairy goats, which means that milk is a bonus for us because the real product on our farm is the live animal and its fine pedigree. We milk a number of goats throughout the season - we make cheese and drink as much of the milk that we can, but we still have surplus milk. Since it is not legal to sell this milk for human consumption, we collect the surplus in buckets and every so often transport it to a friend’s farm where she feeds it to her pigs. The pigs don’t mind curdled milk (in fact they love it!), as does the farmer since it provides a valuable supplement to their diet. In exchange, we are able to store large amounts of hay in the pig farmer’s hay barn, since we don’t have one of our own.

How one would quantify the essential trading that a farm does on an Excel spreadsheet designed to balance costs and revenue eludes me. This is where the traditional modes of accounting and business-savvy seem to break down. I am by no means saying that small farms are not subject to the pressures of the free market, and indeed I believe good accounting is a necessary ingredient for success in today’s small farm enterprise. But the idea that there is a certain size of operation that is workable, and that other sizes or models aren’t feasible, doesn’t strike me as a helpful or even accurate understanding of small farm economics.

Yes, we are subject to the same, or even harsher, economic realities of any small business-owner. But farmers are nothing if not resourceful, and I would venture to guess that most small farmers have found an underground economy of trade and barter to be an essential part of their arsenal. Whether it’s sharing tools or skills or workers, the small farm ethos is one that deeply understands the importance of community, and the value of working together towards a greater goal. The small farm ethos is one that was born out of a desire to reject the conventions of a society that said there was only one way to produce food that makes economic sense: centralization. The small farm ethos understands that small is beautiful, and that what works for one locality may not work for another. Within the small farm ethos, there is no economy of scale more important than the economy of community, which a small farm responds to as a living and breathing organism.

So whether you are a consumer or a producer or both, I urge you to familiarize yourself with this term: economies of community. For so long, ‘economies of scale’ has been a part of the vernacular, informing the value system and the decisions made in the free marketplace. But the beauty of the free market is that it is free, which means that its actors are not bound to any one supplier or philosophy. I urge you to free yourself of the traditional vocabulary, and to try out the ‘economies of community’. I believe it was Gene Logsdon who told the powerful tale of an Amish farmer who was confronted about the finances of his farm. The farmer pointed out that he considered his labor to belong in the revenue side of the column, not cost. Within his own economy, that farmer was making out pretty well, and maybe you can too.

You may pay more for a carrot in this economy, but looking beyond the price tag, you’re likely to find a much higher value in the homegrown carrot. It’ll be sweeter, crisper, more nutritious, and most importantly, it’ll be a vote. A vote for a new economy that supports small farms that may not ever look successful on paper, but find themselves thriving nonetheless.

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