From driverless tractors and robotic pickers to technologies that preserve fresh produce 5x longer, we are obsessed with using technology to solve the many, many challenges in our food system. But after spending a few days in Omaha this week, hanging out with some of the most advanced and progressive farmers in America, I realized that technology is really just a small part of the solution we’re looking for. The real future of farming isn’t growing plants or animals; it’s growing businesses.
Don’t be confused, farms are already businesses — incredibly capital intensive and highly risky businesses at that. In one year, a farmer might buy a few million dollars in inputs and assets, sell a few million dollars of commodity crops, and come out in the end with something like $30,000-$40,000 a year in “profit” (read: wages). That’s a terrifying amount of risk to take for a meager reward. And farmers do it. And now, at a time when commodity prices are cripplingly low, they’re looking to mitigate some of that risk with new businesses on their farms.
What kind of businesses? Literally every kind of business you can imagine. Maybe it’s turning commodity corn into top shelf, farm-to-table whiskey and bourbon with an on-farm distillery. Or building a greenhouse in the middle of Nebraska to grow herbs for grocery stores across the Midwest. Or a Montana farmer branding his own wheat, bread, and delis. Or converting an old farrowing barn into a hydroponic tilapia-lettuce operation. Or offering farm education experiences with the help of AirBnB. Or renting out unused shops or barns for weddings or events in the off-season. Or creating seed-to-sheet cotton linens. These were just a few of the business ideas (planned, started, and completed) that I heard about, and there are undoubtedly many, many more.
The bottom line is that the most successful farmers in America aren’t doubling down to max out commodity corn and soybean yields at any cost. They’re looking to upgrade existing resources on their farms (be that the crop itself, facilities, etc.) to cash in on alternative sources of income. And that’s something we should all be excited about. Why? Because more money in farmers’ pockets means more opportunities for change.
A lot of the discussion around agriculture and changing the food system puts farmers into one of two categories; small, sustainable, organic farms battling against the forces of big business for their local communities, and everyone else. The “everyone else” tends to be painted with pretty broad strokes as heartless “factory” farms who lord over thousands of acres of monoculture crops while counting their money and laughing maniacally at the environmental and health impacts of their evil endeavors.
I’ve talked once or twice before about how this characterization is probably the number one barrier to change in US ag, so I won’t go on about it. But even if you feel that there is a shade of truth in the previous paragraph, than nothing should excite you more than to hear that farmers are shifting some focus away from the production ends of their operations. For others, like those who think that farmers are people to0, it should make you smile that farmers, being bold and innovative as ever, are finding the courage to start new businesses that will protect them and their family legacies for years to come.
If we want a more sustainable food system, we can’t start by convincing farmers to change their practices. We first have to make sure it’s possible for them to do that. It’s not possible for a farmer to plant cover crops if they’re not making enough income to afford cover crop seed. A farmer can’t worry about the depletion of the Ogallala aquifer if irrigation is the only thing between them and bankruptcy. A farmer without access to an organic buyer can’t justify the cost of growing organic. Though there are a lot of contributors to the issues in these examples, a significant one is always financial limitations. In that way, starting businesses help farmers earn at least a little extra money and security, which is a big step towards actually being able to make (or change) decisions around production practices.
And farmers who invest beyond the crop create benefits that all of us get to enjoy. For one, when farmers build brands and have a hand in marketing their goods or services directly to consumers, we — the eaters, drinkers, and users — get to experience the people behind the product. For example, when a farmer makes whiskey, he comes at it with an expertise not just in distilling, but in the nuances of corn varieties, soil quality, and how weather impacts plant health. We expect this level of expertise with some products, namely wine, but with farmers more involved in marketing their farm products, we can expect a lot of higher quality goods, and to know more about them. Farmers also get more of the financial benefit (which they’re more likely to spend in their local communities) and can more rapidly adjust to consumer demands as they work directly with their end users.
A significant part of making these alternative farm businesses possible is that farmers are looking for ways to focus less on growing bigger (in terms of acres) and growing more (in terms of raising yields) and focus instead on growing smarter.
The important reality here is that, contrary to popular belief, we don’t need farmers to become more productive. There’s a myth out there that farmers are single-handedly responsible for feeding 70% more people by 2050. But even today, there are more than enough calories grown to completely eradicate hunger. The real problems lie in food distribution, not production. American farmers are, in particular, far and away some of the most productive farmers in the world. Farmers don’t need to be scurrying around trying to wring every bushel of crop from every acre. Improving the quality of life for farmers today (which includes being able to actually pay themselves a wage, which is rare on many farms this year) will be better for everyone, including for our food system in the future. Diversifying farm businesses and helping farmers create businesses that not only support their families but could potentially employ others — that’s a path to sustainable rural communities, sustainable foodsheds, and a sustainable future.
Despite the fact that 97% of farms in the US are still family owned, family operations struggle to stay independent in times when money is tight. US agriculture is currently experiencing an unprecedented level of consolidation (both on the business side and the farm side), and that consolidation puts more and more pressure on farmers to get bigger by buying or renting more acres, despite outrageously high rents. Businesses beyond production are one of the few ways that farmers can really fight against that consolidation without buying out their neighbors (which is a good way to make enemies in a small town) or risking bankruptcy in a bad year. Additional businesses are more likely to make money year round, and don’t necessarily require owning the means of production. For example, if a barley farmer in Montana sets up a craft brewery, a bad year in his barley fields won’t put him out of business, because he can buy barley from other farmers and still make money on the marketing side (while supporting other local farmers too).
In that way, farmers are each other’s greatest ally and resource. Farmers can be a notoriously independent and secretive bunch, but if they can marshall available technologies, particularly in the next 5–10 years, to pool resources (be that equipment sharing, storage leasing, co-investing, etc.) there’s a possibility for a reversal of what feels like the inevitable demise of the mid-sized farm.
But what can we do to support farmers as they move forward with new types of farm businesses? Invest.
In Silicon Valley, pretty much any white guy in a hoodie, with glasses and an idea, can walk into a VC at 8am and walk out with a million dollars by noon. Not surprisingly, there isn’t nearly as much financial support for building greenhouses in Kansas or ethanol plants in Indiana as there is for a college dropout whose building the next laundry delivery or sneaker resale app. But I’d argue that a million dollars in the Midwest will go a lot farther towards having a lasting impact on the world. And if even a small fraction of the money that was spent on the Hampton Creeks or even the Impossible Meats of the world went to support farmers starting businesses, it could have a real impact.
Farmers have, and no doubt will, continue to fund their own projects and create, run, and slowly build their own businesses like people use to, but if we wanted to Kickstart (capitalization intentional) the change process that, especially given the current political climate, might be the only real path towards sustainability, we should keep our eyes and ears open for opportunities to invest in farm businesses.
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