Small Farmers Creating a New Business Model as Agriculture Goes Local

[phantom power]

Seems more like resurrecting an older business model.

Economists and agriculture experts say the “slow money” movement that inspired Mr. Varma, a way of channeling money into small-scale and organic food operations, along with the aging of the farmer population and steep barriers for young farmers who cannot afford the land for traditional rural agriculture, are only part of the new mix.

A looming shortage of migrant workers, with fewer Mexicans coming north in recent years, could create a kind of rural-urban divide if it continues, with mass-production farms that depend on cheap labor losing some of their price advantages over locally grown food, which tends to be more expensive. From the vineyards of California to the cherry orchards of Oregon, big agriculture has struggled this year to find willing hands. Local farm sales are becoming more stable, predictable and measurable. A study last fall by the Department of Agriculture said that local revenues had been radically undercounted in previous analyses that mainly focused on road stands and markets. When sales to restaurants and stores were factored in, the study said, the local food industry was four times bigger than in any previous count, upward of $4.8 billion.

More predictable revenue streams, especially at a time when so many investments feel risky, are creating a firmer economic argument for local farming that, in years past, was more of a political or lifestyle choice.

“How you make it pay is to get closer to the customer,” said Michael Duffy, a professor of economics at Iowa State University, capsuling the advice he gives to new farmers in the Midwest.

Labor, as it has been for generations in the United States, is still the big wrinkle for local growers. But in many cases, experts like Professor Duffy say, the local food system is increasingly going its own way, differentiated from the traditional labor pool of migrant workers that the United States’ mainstream produce system depends on. Many larger local farms hire Hispanic workers, but at more farm stands and markets, buying local also means, in subtle or not so subtle ways, buying native.

http://www.nytimes.com/2012/07/02/us/small-scale-farmers-creating-a-new-profit-model.html?_r=1

[GliderGuider]

1. Speaking of resurrecting older business models

I've been reading a macrosociology textbook on the ecological-evolutionary model of the development of human societies. One of the authors is Gerhard Lenski who seems like the sociological counterpart of Marvin Harris. The book describes the general nature of hunter-gatherer, horticultural, agrarian and industrial societies and the combinations of pressures and opportunities that moved them from one to the next. One of the qualities of agrarian societies was an extreme inequality based on land ownership - the basis of the lord/serf aspect of feudalism.

That got me thinking about a potential scenario in the devolution of industrial societies, in which the cities empty out due to energy shortages, food shortages and infrastructure failure. People need to eat, so they head for the countryside - to find that all the land is owned in very large chunks by corporate farmers.

There seems to be a possibility inherent in such a situation for a rapid return to feudalism, even in America. Existing large landowners could subdivide their holdings into rentable-sized plots of a few acres each, and set up a system of sharecroppers and tenant farmers - essentially serfs - who rent the properties in return for a portion of the crop. It could be to the landowner's economic advantage to do this if the price of working the land mechanically escalates to the point where a peasant family with a few oxen and fewer personal needs can do it cheaper.

Serf's up!

[phantom power]

2. It seems fairly common...

when governments break down, local warlords and/or gang leaders start to pop up.

"Corporate feudalism" is also a model with a pedigree. I'd say our current society is moving along that path, as our federal and state governments sell off their assets and services to private corporations. So now, it is our corporate overlords who "protect" us. As with the good old fashioned medieval feudalism, it's at least as much "protection racket" as it is genuine protection.