Producing for Localvores

You know the old joke about the farmer who wins a million dollars in the lottery?  A reporter asks him what he'll do with the money and he replies, "oh, I guess I'll just keep farming til the money's all gone."

Well, from this article, it appears that this is true for new farmers as well.  Notice that in a 2,000 word article, there's no mention of whether or not any of these farmers is earning any real income.  One farmer estimates that

he has already put “north of several million” into the farm.

Assuming an opportunity cost of his money of 10%, he should be netting somewhere "north" of several hundred thousand dollars just to cover those costs.  If not, he's providing a nice subsidy to the consumers of locally produced products.

Another couple quoted in the piece, apparently producers of goat milk cheese, has to have one person continuing

to work from the farm 40 to 60 hours a week for her Oakland law firm. “It does take a toll,” she said. “But it helps pay the bills and makes sure the goats get fed the best feed and grain and whatnot.”

Apparently the goats couldn't get fed without the funds the lawyer puts into the farm.  Her partner in the operation, apparently the one doing the farm work, notes that taking care of animals and making cheese is

an 18-to-20-hour day to do this.

Doesn't leave much time for sleeping.  Or reading a book.

I'm not sure how long they'll continue.  They both may get satisfaction from being back on the land, but it appears that there's a pretty high price to pay in terms of foregone income and leisure time. The people who buy their cheese are not paying the full cost of the cheese.  The lawyer and her partner are subsidizing their consumers. (In international trade, this is called dumping.)  As a consumer, I don't mind.  As a producer, I'd seriously consider why I was doing it.

Agriculture is very hard work with low returns.   That is even more true for locally produced food, even when it costs more to produce than that stuff that comes from 1,000 miles away.  It will be interesting to look back on the people highlighted in the article, and on similar producers in Vermont, to see if they are still in business five years from now. 

Comments

[G. Cross]

So, what's the point? I would have to guess that libertarians would be perfectly okay with folks dumping millions of their own dollars into a farming operation? Certainly, liberals like me have no problem with it. It helps to keep good farm land in production. Who knows one day we may need that land to ensure that we can eat? Sounds like a win-win situation.

[Jim Gatti]

The point is that it won't last. I had graduate school friends who decided in the 1970s to get back to the land on a farm in upstate NY. They lasted two winters and called it quits when "A can of Chunky Chicken Soup seemed like a banquet." The individuals profiled in the article are like the couple that moves from the big city and buys a B&B from another couple who moved from the big city and bought it four or five years before. Then romance collided head on with reality. I have nothing against romantics dreaming about returning to a bucolic life and then acting on those dreams. I do have a problem with individuals who believe that Vermont's economy should be based on solely on them.

[Lazarus Long]

There is a reason why they are called 'hobby farms'.