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  • From: "TradingPostPaul" <tradingpost@riseup.net>
  • To: livingontheland@lists.ibiblio.org
  • Subject: [Livingontheland] Making a Living on a Small Farm
  • Date: Thu, 12 Oct 2006 09:43:09 -0600


Making a Living on a Small Farm
John Ikerd
University of Missouri
http://www.ssu.missouri.edu/faculty/jikerd/papers/SFT4-MakingaLiving.htm
Published in Sustaining People through Agriculture column, Small Farm
Today, November/December, 2000 issue

In times past, forty acres, a mule, and a lot of hard work were all that it
took to make a living on a farm. But those times are gone. A family
could live well on a lot less money in those times, but hard work also was
worth a lot more back then – regardless of whether it was done by a mule
or by a man. The conventional wisdom was that anyone who was willing to
work hard enough could make it on the farm. During the financial crisis
of the 1980s, many farmers virtually “worked themselves to death”
trying to save their farm. If they could just work hard enough, they could
make it. But, they couldn’t – they went broke.

Work simply isn’t worth as much as it once was – at least not on the
farm. Tractors took the place of horses and mules. Other machinery and
equipment took most of the work out of most jobs around the farm.
Physical labor isn’t worth any more than the cost of using a machine to
do the same job – maybe even less because machines are less bothersome to
fix or replace and far easier to manage than are humans.

Mechanization made farming easier. Farmers became machine operators rather
than laborers. But a mechanized farmer could farm a lot more land or raise
a lot more livestock than could a farmer doing everything by hand. And
farmers still had to expect to put in full-time on the job if they expected
to make a full-time living. So a full-time mechanized farmer had to have a
lot more land and a lot more capital tied up in machinery and equipment
just to make a living. With mechanization, farms became larger and it
became more difficult to make a living on a small farm.

Agricultural chemicals also made farming easier, taking some additional
labor out of farming, but mostly, making a farm far easier to manage. A
farmer didn’t need to know nearly as much about maintaining the natural
fertility of the soil – they could take a soil test and apply the right
fertilizers. They could specialize in crops or livestock – they didn’t
need manure to go back onto the fields to maintain fertility. Farmers
didn’t need to know how to till the fields to control weeds – they
could spray with herbicides. They didn’t need to understand how to use
crop rotations to control weeds, insects and other pest – they could use
commercial pesticides. Livestock farmers didn’t need to know how to keep
their animals healthy and growing, they had antibiotics and hormones to
fill in the gaps in their knowledge. Farmers now could farm by recipe. As
farms became easier to manage, each farmer was able to farm more land or
raise more livestock. However, a farmer still had to expect to put in full
time on the job to earn a full time living. So with increasing use of
agricultural chemicals, farms grew still larger, and it became still more
difficult to make a living on a small farm.

In economic terms, there are only four basic factors of production, or four
basic ingredients in any production process – land, labor, capital, and
management. Over time, machines, agri-chemicals, and other technologies
have resulted in substitution of capital and land for labor and management.
Consequently, a typical full-time farm today requires far more land and
capital today than fifty years ago. It takes far more money to buy and
operate a farm today because of high land and equipment costs and expenses
for fertilizers, pesticides and other commercial inputs. But, in a typical
farm today, labor and management are far less important than fifty years
ago. If a farmer has enough land and enough money to buy the latest
equipment and technology, they don’t have to work much or even think much
– except about how to manage their money.

In economic terms, each of the four factors earns something in return for
its contribution to productivity. Land earns rent, labor earns wages,
capital earns interest, and management earns a salary. Profit or loss is
the reward or penalty for taking the risk associated with investing land,
labor, capital, and management in an enterprise without knowing whether the
net results will be positive or negative. Profit is the reward for taking
the risk of farming rather than renting the land, putting the money in an
insured CD, and working for someone else. In general, each factor of
production earns a return in relation to its contribution to the production
process.

As the nature of farming has changed, the returns to land and capital have
grown and the returns to labor and management have declined. It isn’t
necessary to quote statistics; it’s just plain common sense. Returns to
labor and management are returns to the farmer – to the human investment
in a farming operation. The land and capital can be owned by anyone –
increasingly by someone other than the farmer. Actual farming is about
working and thinking – labor and management. And in general, the return
to farming can be no more than proportional to the working and thinking
done by the farmer. If there isn’t much working and thinking going into
producing a crop or a batch of livestock, there isn’t going to be much in
it for the farmer – and it will be tough to make a living without a lot
more land and capital. Farmers who don’t do much working or thinking
simply can’t expect to make a living on a small farm.

The ultimate low-return agriculture is contract production. Farmers are
being told that the only way they can remain competitive in agriculture is
by signing a comprehensive production contract with one of the giant
agribusiness corporations. But, farmers need to stop and think – who can
logically expect to benefit from contract production? Under most
contracts, the corporation arranges for capital – mostly loans to be
repaid by the grower. The corporation provides all of the technology –
genetics, equipment, feed, health care, etc. And the corporation provides
virtually all of the management – the grower’s mainly do what they are
told to do. The grower provides the labor, but the highly mechanized
operations require little labor. Contract livestock or poultry operations
require little land, although the grower is expected to find some place to
dispose of manure. In summary, the grower provides a small amount of
equity capital, a small amount of land, and some low-skilled labor. The
corporation provides everything else. The grower gets a fixed amount per
animal produced, regardless of costs or price, so the contractor even takes
most of the risk. So who is going to benefit from a corporate contract
operation? Certainly not the grower – the grower doesn’t do anything
that would justify making a living in such an operation.

So what does all this say about making a living on a small farms? It says
small farmers have to put a lot more of themselves into their operations
– a lot more management and labor – than do most farmers today. It
says a farmer can’t expect to make a decent living if someone else makes
all of the important decisions and they only contribute some low-skilled
labor. It says that farmers must rely on management and labor far more
and rely on land and capital far less if they expect to make a living on a
small farm. It says that the way to turn a small farm into a full-time
farming operation is to find ways to substitute management and labor for
land and capital.

There is a limit to how hard anyone can work or, more important, would want
to work on a farm. Working harder is still not the secret to making a
living on the farm – even though most of us would be better off if we did
a bit more physical labor and a bit less sitting. However, thinking is
potentially far more productive and is far less limiting than is working.
So the key to making a living on a small farm is more intensive management
mixed with an appropriate amount of skilled labor. A small farmer has less
land and capital so they have to do more thinking and decision making per
acre or dollar invested – and they have to be willing to work when
working is the logical thing to do. They have to put more of themselves
into it if they expect to get more for themselves out of it. The
successful farmer of the future might quite accurately be labeled a
thinking worker or a working thinker – the key is to do both together,
simultaneously, in harmony.

It takes more thinking to work with nature to reduce costs of inputs and
increase profits while taking care of the land – more eyes per acre as
Wes Jackson says. It takes more thinking to find and keep customers who
want, and are willing to pay for, the things a small farmer can produce in
harmony with nature – relationship marketing as Joel Salatin calls it.
It takes more thinking to fit your unique talents and skills as a farmer to
the needs of your land, to your particular customers and your community –
linking people, purpose, and place. Literally thousands of these thinking
workers are on small farms today all across the land – putting more of
themselves into their operations and are getting more for themselves in
return. Each is doing something different, but one by one they are finding
ways to make a good living on a small farm.







  • [Livingontheland] Making a Living on a Small Farm, TradingPostPaul, 10/12/2006

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