Healthy soil and sustainable growing

["TradingPostPaul" <tradingpost@riseup.net>]

Renting may allow you to get into the business without a killer mortgage
and down payment, but it still means making payments. Let's keep in mind
that in the U.S., farmers' average return on investment runs about 2%. And
2% is a dead loss when inflation is running five or ten times that. In any
other business it would be called crushing failure. I don't have the
reference handy on that 2%, but it's entirely credible when you consider
family farms have been going belly up for decades in this financial
environment. Today the typical farm family has at least one day job to pay
bills. It's the cost-price squeeze that's been decimating small farms. They
pay the cost of fertilizer, pesticide, and machinery etc. that the
suppliers demand, and take the price the middleman pays. No negotiating, no
way out of the trap. And this is probably why they like to treat land as an
investment instead of a producing asset. When land was rising that made
sense, at least to the accountants who run the mega-farms that get the
lion's share of federal subsidies (your tax dollars) and produce most of
the big cash crops for the middlemen. 

Respected, experienced writers have long advocated less is more; five or
ten acres at most is about all a farm family can handle sustainably. Some
maintain you can live well on two or three, depending on certain factors.
My own belief, based on recent experience, is that intelligent methods may
allow you to live on less than that. 

paul tradingpost@lobo.net

*********** REPLY SEPARATOR  ***********

On 11/29/2007 at 2:20 PM Dianne Palmer-Quay wrote:

>I recently attended a farm business planning workshop and found it
>interesting the the presentors pointed out that , in general, you can't
>'''cash flow" land - i.e. land is seen as an investment rather than an
>asset
>that will pay for itself.  They did hedge that it may be able to make land
>"pay" with high values crops (i.e.organic or other niche market items).
>Although the farmer may be less secure with rented land, the financial
>picture may actually be better.
>
>It was an interesting idea and I am actually pursuing an idea that would
>involve rented land with a little more enthusiasm.  The presentors did
make
>the point that today's farmers are wise to get a long lease - especially
in
>areas with development pressure - and to structure their business plan to
>accommodate the possible future shift in land resources.  The bottom line
>was that rented land was a viable option for farmer wannabes.
>
>Dianne in SC
>
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