Make big bucks AND feed the world?

I am new here so forgive me if this question was answered already. If it was could someone link me to the thread - nothing turned up in my search.

This is related to the "big bucks from permaculture" topic.

Here goes: How does the high-profit permaculture farming concept connect with the feed the world permaculture concept?

My further thoughts if you all want to read them before you respond: If I understand it correctly the idea that Paul and others have put out there is something along the lines of making a name for permaculture prodcution with very good marketing and a high quality/well established system can result in a very high net $ amount per acre. This high profit, as shown in example by S.H. and others, in turn perpetuates the idea of using a permaculture model and results in the adoption of these systems by Big Ag and conventional small scale farmers alike. Do I understand correctly? If so, what systems are in place to prevent eventual large scale food inflation? Here in the USA there is already a perception about food labeled as organic - it is only for the wealthy / not for people of little means - therefore those groups shut the door on food that is made without synthetic inputs. A permaculture system priced for the consumer at a (worthy) value far above organic produce / meat / dairy would, by the same logic, be even less accessible to those who do not wish to or cannot farm / produce food for themselves and don't have an income high enough to commit a larger percentage to food. There are many other examples I could think of that illustrate how a high value prevents access. I would like to believe that a high profit system and a community food sharing system and a backyard urban permie garden and... (diversity of systems) can cooperate and coexist but I am having a difficult time figuring out the "how" of it all. Is the common answer just to encourage people to use the permaculture design ideas in the scale and structure of their choosing? Any thoughts?

Thanks
Liam Etheridge

Welcome to permies, Liam
Here's a couple of interesting threads Permaculture for Millionaires
Industrial scale permaculture
this topic tends to get people a bit worked up, so be warned!

Liam Ethridge wrote:I would like to believe that a high profit system and a community food sharing system and a backyard urban permie garden and... (diversity of systems) can cooperate and coexist but I am having a difficult time figuring out the "how" of it all. Is the common answer just to encourage people to use the permaculture design ideas in the scale and structure of their choosing? Any thoughts?

Personally I think permaculture is about how individuals interact with their community, both human and non-human, so yes, I would say just encourage people to use permaculture as it best fits their own situation. I'm not personally seeing a conflict of for-profit permaculture food-growing with voluntary food-sharing systems. People will gravitate to those designs which fit their situation best, given the opportunity. It is the opportunity which is lacking for most people, or rather perhaps, the knowledge and example. Personally I think we should each model the permaculture system we prefer, and let other people make their own choices. I think functioning models of different permaculture designs are sorely lacking, there should ideally probably be a few on every block or road. I can see a for-profit permaculture food growing system being both inspiring to the community and lucrative for the operator. I can also see a voluntary food-sharing community garden being inspiring, as might be a backyard (or preferably front-yard) urban food garden.

Can you articulate a few of your specific concerns about how different systems might exist in the same community? Do you feel there would be conflict between the sharing endeavors and the for-profit endeavors and how do you see this conflict expressing itself?

Industrial agriculture is able to produce inexpensive food through the hidden subsidy of abundant and cheap fossil energy and fossil fertilizer, as well as the depletion of soil. A small scale, ecologically-minded farmer lacks these subsidies and is unable to compete on a price basis with the behemoth while maintaining a living wage.

As a transition strategy, higher 'boutique' prices for permaculture agriculture products can enable farmers to develop their farms and techniques...to preserve old ways of farming and to develop new syntheses. Yes, it is exclusive, and does not serve the needs of those less privileged. Those with the means and the personal values are subsidizing the development of a necessary new agriculture for the future.

Ultimately farmers will need to learn to live with less income. Consumers will also learn to live with less, and food will take up a greater proportion of their budget.

The current culture of excess consumption is a direct consequence of the availability of cheap and abundant fossil energy. As growth continues, energy production slows, and energy becomes more costly, humanity will begin bumping into inevitable constraints. As well as the economic ones, there will be environmental constraint as degraded environments lose their capacity to provide ecosystem services. Climate change will add further challenges. This will be a period of energy descent and the retrenchment of current excess.

Ultimately, the dream of 'big buck' personal aggrandizement is fundamentally irreconcilable with living within our ecological means. We WILL reduce our collective footprint, the question is: will we do so thoughtfully, mindfully, and create beautiful communities that are a joy to live in?...or will we stick our heads in the sand and let the irrevocable laws of thermodynamics and biology do it for us? That would get ugly, but it seems the most likely. Either way, the world needs permaculture...

Making money and farming go hand in hand. Very few people want to impoverish themselves and their families. If there is to ever be a widely accepted future for permaculture it has to be proven to provide a decent living for people,especially the young people who have the drive and energy to try something like this.


That said My suggestion would be to grow what you will eat and find a niche. 1. Are their anyone offering higher quality homegrown food in your community? eg. Heirloom vege's 2. If so what Are they growing and selling best? eg. They sell out of tomatoes every weekend. 3. Can you offer a higher quality version of that product? eg.Can you offer san marzano or purple cherokee tomatoes?
4. If not what aren't they growing? If no one is growing say peppers can you offer cayenne or some of those super hot ones like Bhut Jolokia,ghost pepper? 5. Value added. eg can you offer jams or jellies especially if no one else is offering them.

Also know your market. EG. My hometown would laugh you out of town if you tried to sell $3 or $4 a dozen eggs. Doesnt matter how good they are,because people here have plenty of land if they wanted to get good eggs but have little cash. That said I make my own cayenne products like powder,flakes,dried,smoked. I can sell for $40 a pound all day.

That said the last question is Will you market yourself? eg.Buy business cards to pass out everywhere you go,EVERYWHERE! Have a website offer online ordering. Call ALL the local restaurants, Not just the higher end,especially if you are producing more then your other customers can buy. If you want to be sucessfull you MUST push your business and NOT lose the qualities that made you sucessfull to begin with.

But thats just my opinion and I could be wrong

I think there needs to be a distinction made between "making big bucks" or big profit, and "making money" and profit. Profit is money in excess of expenses. In some business structures, wages are not considered profit, but an expense. So I think there needs to be a distinction made between the farmer making a living, a wage, and the farmer making "big bucks" or significant profit over expenses. High prices on non-industrial food may reflect higher expenses in the form of wages, but not profit. Do we expect farmers to work for no pay? For pathetically low pay? Do we think they should get paid less than non-farmers, for instance? Should a farmer make minimum wage? Middle class wage? Or "big bucks?"

Permaculture and Transitioning Industrial Agriculture Systems with Darren Doherty: http://www.youtube.com/watch?v=YVl-N3ndvWY

Another point that gets lost is that the high margin of permaculture comes from the reduction of input costs. The up-front cost is in dirtworks vs. machinery (which is about a wash if you have priced machinery lately) but no (or greatly reduced) reoccuring expenses--fuel, fertilizer, seed, chemicals.

My brother in law spends an INSANE amount of money on fuel to farm each year. And he has some of the most efficient equipment out there.

I still think the permaculturist is going to face high labor costs which might equal (or even exceed) the expense he would have incurred for machinery and fuel for the industrial operation. I'm not sure input costs will be lower. Of course how much labor is required would depend on the operation, what crops or livestock are being produced.

First of all, I feel no compunction to feed the world.

However, if you figure out how to feed the world you'll make big bucks.
However, you may not make a profit.

I would rather sustainably feed my neighbors than get big.
I would rather see ten million small farms each feeding their neighbors than 100,000 medium sized farms or 10,000 big farms.
If disaster strikes a big farm it hurts many. If disaster strikes a small farm there is little impact because production is distributed.


Be profitable - that is part of being sustainable and permaculture. That may mean being smaller. Figure out what you can do well.

There is no conflict here. Go about your planting.

Walter, you said what I couldn't put into words. I'm hitting the 'like' button.

Walter Jeffries wrote:

Be profitable - that is part of being sustainable and permaculture.

I agree. Profit is surplus, without any surplus it can not be returned, thus violating some interpretations of the 3rd ethic. My own vision of permaculture is of abundant surplus, which means profit (not necessarily $ but part of the surplus could be $). I see permaculture teaching the world to feed itself.

Tyler Ludens wrote:Profit is surplus, without any surplus it can not be returned, thus violating some interpretations of the 3rd ethic.

This is the sort of statement I've seen some people make as if it were an argument against success. Far from it.

We plant legumes in our pastures which suck nitrogen out of the air removing pollution and putting it back into the soil and cycle of life.
We grow grasses and other plants that suck carbon out of the air producing sugars for livestock to eat bringing it back into the life cycle.
We take whey, a waste material, from a local cheese and butter maker thus keeping it out of the waste stream and capturing its nutrients back into the life cycle.
The livestock eat the legumes, grasses and other stuff and then shit on the pastures helping them to grow while themselves growing.

All of this is permaculture and sustainable.

Tyler Ludens wrote:My own vision of permaculture is of abundant surplus, which means profit (not necessarily $ but part of the surplus could be $). I see permaculture teaching the world to feed itself.

Agreed. Let us get more people being part of the process rather than having them sit on the sidelines.

Cheers,

-Walter

Walter Jeffries wrote:
This is the sort of statement I've seen some people make as if it were an argument against success. Far from it.

Exactly. I don't see how one can fulfill the 3rd ethic without being successful, without creating a surplus.

This all sounds more sensible. No arguments against success at our endeavors, nor against surplus. Even 'abundant' surplus. No arguments against profit either. But in the conversation it's important to bear in mind that there are very real physical and biological limits to consumption and growth, and to the surplus (or profit) that your land can generate in perpetuity...

We were talking about 'Big Bucks' though...I'm still certain that the level of surplus and profit that is truly sustainable falls far short of what most people would consider 'Big Bucks'...which is why I argue that it's an inappropriate goal within a permaculture system, and that we are all going to have some belt-tightening to do in the future no matter what we think about it

if you manage to grossly overvalue your boutique agricultural products, and with the consequent wealth you acquire a lot of consumer products (which are grossly undervalued because of cheap fossil energy and no accounting of pollution costs) your net impact on the planet is a big negative no matter how 'green' the farm is...

Kari Gunnlaugsson wrote:
if you manage to grossly overvalue your boutique agricultural products, and with the consequent wealth you acquire a lot of consumer products (which are grossly undervalued because of cheap fossil energy and no accounting of pollution costs) your net impact on the planet is a big negative no matter how 'green' the farm is...

That would be in violation of all three ethics, in my opinion. It would not be caring for the Earth (overuse of resources) nor caring for people (undervalued consumer products hurt people) nor limiting personal consumption in order to have resources to return in service to the first two ethics. In fact, from my point of view, such behavior would be impossible in the context of permaculture and so is off-topic in this conversation, in my opinion.

Thanks everyone for all the responses. I have been grappling with this one for a little while. Quite a few good points have been made but I feel compelled to rephrase one of my original questions because It got lost in the shuffle. Kari spoke on something close to that unanswered portion:

Kari Gunnlaugsson wrote:
As a transition strategy, higher 'boutique' prices for permaculture agriculture products can enable farmers to develop their farms and techniques...to preserve old ways of farming and to develop new syntheses. Yes, it is exclusive, and does not serve the needs of those less privileged. Those with the means and the personal values are subsidizing the development of a necessary new agriculture for the future.

Ultimately farmers will need to learn to live with less income. Consumers will also learn to live with less, and food will take up a greater proportion of their budget.

I have a problem with the chain of events here. If permaculture is pumped up to a niche market serving the wealthy and informed what incentive is there to then change our profit structure to "live with less income"? also what incentive is there for consumers to " live with less, and food will take up a greater proportion of their budget"? Kari, you have two great points here. This common perception where permaculture creates a low economic utopia seems at odds with creating a high profit permaculture system and you sound quite aware of that. Perhaps the "utopian" crowd and the "high profit" crowd are not actively working to synergize their ideas/designs.

(to all) I just don't know how to transition from big $ to less $. Would it not be wiser to just go straight for the "enough money" setup rather than the "high dollar" set up? No doubt using permaculture methods (eventually) produces food/commodities with less cost and greater yields (which leads to more profit even with the high labor involved). What I am also interested in is how the marketing of permaculture effects the prevalence of it's methods.

Kari Gunnlaugsson wrote:
Ultimately, the dream of 'big buck' personal aggrandizement is fundamentally irreconcilable with living within our ecological means.

I don't know what this means.

In my OP when I talked about feeding the world I meant to sustain the life (not just humans) on this planet through widespread use of permaculutre (and other) practices.

I am going to look for more responses but I will probably leave any further comments of mine off this thread. I am new to permies and I seems like I have questions which venture a little too far into the realms of politics and philosophy. I would rather learn about plant guilds that work in my local micoclimate, etc, than get into idealogical debates. (not that this thread would end up there, I just wanted to limit my own self because I am new and don't quite know the lay of the land yet)

Liam

Liam, I think I should follow your lead and bow out of this. I talk too much and know too little. But I thought your opening post was perceptive and raised some interesting and uncomfortable questions.

Since you quoted my post, I'll try to clarify what I meant there.

First one, regarding the chain of events...I wasn't really suggesting that there was an incentive that would induce people to live with less income, or spend a greater proportion on food. I think it's going to happen whether people want it or not, as our lifestyle bumps into some hard externalities. Peak oil, rising energy costs, climate change, economic and political instability, ecosystem collapse...all that fun stuff. The transition strategy is more about making sure you are making enough profit now to learn and to develop your farm system so you (or your kids, who knows?) will be ready to provide knowledge and food when times get hard and it's needed.

In the second point, I'm just saying the planet is too small and there's too many beings here for anyone to be able to justify a big bucks lifestyle anymore.

As far as personal action, I'm not setting out with a goal to lower my income. I'm going to try to make as much as I can from the well-off, by giving them a healthy, ethical product that they can feel good about buying and using. If and when I start realizing a profit I want to put a portion of it back in to the farm system ( to make it more sustainable and more robust for the hard times coming), and I would like to see that a portion of it allows me to give some food (or perhaps sell at a loss) to the disadvantaged who can't afford to buy from me. Education would also be a good place to put profits, either learning or teaching. Robin Hood, right? Anyway, there's a ton of ways to approach this, but that's where I'm at. I hope this doesn't cause further drift from your original, and excellent, question...

Don't stop posting on this thread (unless you want to, of course)
The posts are very reasonable and thought-provoking and just in case anyone thought I was saying "back off", with this:

Leila Rich wrote:
this topic tends to get people a bit worked up, so be warned!

I wasn't

Big bucks or feeding the world is a matter of scale. Are you thinking about giving your surplus tomatos to your neighbors or donating to a food bank ? Are you going to learn to set up an herb spiral and teach a workshop to your neighbors or are you going to teach how to grow a 50 acre food forest ? Some people donate 10% of their income to charity - you could donate 10% of your surplus to building water retention projects in a desert country or setting up permaculture workshops in impoverished nation. But who gets to donate more - someone who earns $ 1000 or $100,000. Who gets to travel to teach and who could afford to ? Certainly a backyard garden or 2 acre orchard is part of the solution if millions are doing it. But why would anyone invest in something of Sepps farms scale or one of Lawtons large food forests without a payback - any one could risk $100 in seed ,but $10,000 ? Why would you even invest in that? Who has bucks big enough to feed the world ?

wayne stephen wrote: who gets to donate more - someone who earns $ 1000 or $100,000. Who gets to travel to teach and who could afford to ?

I think this goes back to what Kari was saying regarding behavior, what we do with the surplus. Permaculture requires that we return or reinvest the surplus into the system to benefit the Earth (#1) and People (#2) and we do so by limiting our own needs and wants. In permaculture the big bucks would enable us to make big returns into the system of permaculture. But it would be unpermacultural to use the big bucks to give ourselves big stupid consumerist lifestyles, in my opinion.

I guess the guist of my questions are what is the incentive for investing in a 100 acre place vs a 3 acre place ? So the surplus would be greater and therefore the ability to live better and maybe have more toys . Also - what is the incentive for innovation on a larger scale - new plants , tools , techniques . I am asking who would take the risk of the initial investment without a hope of payback - the risk for failure is high .

I think a lot of people currently who try to go into farming do so because they want to farm, not because they expect to make the "big bucks." At least that's the impression I get from reading this board, the Australian one, and a homesteading forum. People buy land to farm because they want land to farm. Making money at farming seems secondary at best. So the incentive for farming seems to be the farming itself, the process and life of farming, for those who feel a deep desire to farm. They farm, or want to farm, because they love farming, not because they love money.

Tyler Ludens wrote:I think a lot of people currently who try to go into farming do so because they want to farm, not because they expect to make the "big bucks." At least that's the impression I get from reading this board, the Australian one, and a homesteading forum. People buy land to farm because they want land to farm. Making money at farming seems secondary at best. So the incentive for farming seems to be the farming itself, the process and life of farming, for those who feel a deep desire to farm. They farm, or want to farm, because they love farming, not because they love money.

Tyler, that is pretty true, but I think that will be changing in the next decade to come. I spent the evening with a major food economist, and he said "The price of food is going to go up, and go up by a lot." The reason he states is because of water resources being limited, because of the oil to food conversion, and the population growing at 100 million per year. "Every bushel of food equates to hundreds of gallons of water and a gallon of oil. We are running out of water in many ag regions of the world, and oil isn't getting more plentiful."

Jim Rogers (famous investor, search for him on youtube and watch his interview with Glenn Beck in Dec 2011) says that if you want to make money in the future, become a farmer.

My point is that because the farmer has been so devalued, we don't have enough new ones. People coming into farming in the near future will do well as a result of that. consider it a reverse farm bubble.

One other thought is that profit = revenue - expenses - depreciation. There are three variables that the business person can focus on in their permacultural business.

You can maximize revenue, minimize expenses (inputs) and minimize depreciation to a degree that it is actually an appreciation, as in you are building fertility instead of using it up.

So, let's look at just one variable.

say you have ten acres you can grow on. Lets address the first variable. Revenue.

R = quantity X price
Ah, that seems simple, yes? Grow all you can, if the price is fixed, you increase your revenue. but actually, this is Q1P1 + Q2P2 + Q3P3...+QnPn for each product you quantity of differing product and the price you obtain for it. But let's just simplify this a lot, shall we. Just assume that all produce fetched the same price, it makes the initial equation easier.
Now quantity is related to the inputs provided, aren't they? But depending on what you are growing, that equation changes considerably.

Which is why growing a polyculture food forest is nice. Your inputs are "labor". You may need to do some reinvestment each year, as trees die, or as you want to change things around, but you aren't spending a lot of money on fertilizer or pesticides. Maybe you use some soapy water, or BT. But only in small amounts to help keep things managed..

We have determined, on other threads, that a food forest can generate 10-50 thousand pounds of food in a year. If you do no input to it, you harvest nothing. You sell zero.
If you can pick 100 lbs of food per hour, it will take 200 to 500 hours of labor to pick it all. If you just pick the low hanging fruit (so to speak) you might be able to pick 200 lbs of food in an hour, but harvest only 5000 to 20000 lbs of fruit per acre. but it only takes you 30-100 hours per acre of labor. Sadly, this leaves you with 5000 to 30,000 lbs of fruit still in your forest that goes unpicked. But you got all the best of it.
say you pick all ten acres, and you aren't producing all that much yet, only harvesting 50,000 lbs of food for your ten acres.

And it cost you maybe 300 hours of harvest time.
I would postulate that if you have ten acres, and aren't harvesting 50,000 lbs of food, you haven't got it set up yet, but that is a different topic.
(No, I don't have a farm, I just think I can farm, a big difference)

So now you maximize your price per pound. If you get $.10 per pound, the world gets fed, but you go hungry and make $5000 for your 300 hours of harvest time. If you sell your food for $3.00 a lb, then you made an awesome $150K for your 300 harvest hours.. (Yes I know, I am not including marketing costs here, but I am trying to keep things simple... If anyone wants me to create a spreadsheet allowing you to input all the variables and how they would possibly relate, I'd be happy to do so)

Now the beauty of permaculture is that we stack our functions. That ten acres has enough food left (50,000 to 300,000 lbs) to raise a lot of chickens, goats, pigs, sheep, or a cow or two. We love to raise chickens, but the amount of work that goes into picking up eggs, or raising broilers is fairly high per unit of food. So maybe you put an hour of labor into each chicken you raise (that seems high. might only be 15 minutes, I don't know) but you might have three hours into a pig raised from birth to slaughter (assuming you aren't raising just two pigs) a high quality organic chicken might go for $12. a good hog goes for $800. I might have the numbers off one way or another, but you get the point.
You might have only six hours in your beef cow raised to slaughter, but it might bring $2000 after expenses.

Now I am assuming that the animals harvest all their own food from your food forest, and that might be unrealistic, but it should be our goal, because every dollar we spend on feed is a dollar that comes straight out of our pocket.

I visited a guy recently that did some of this backwards. He is building a permaculture farm business and concentrated on raising everything on the pasture, but the pigs don't care for it. They don't do well on grass. He is having to provide 80% of the pigs food. The cows are doing ok though. The ducks seemed to be happy too. Although he claims permaculture in his design, he had no mechanism to grab water (although he complained about having erratic rainfall and he averages 40 inches a year) he hasn't invested in much (if any) food forest planting that I could see, though that is his goal. So he gets $7.50 a lb for his family pork pack, but he is having to buy so much organic feed that he is probably only making $2.00 per pound. Someone is making money, but not him. He isn't really stacking his functions very well yet. But it is early, he has only been on his farm for 18 months or so. Give him time, he will figure it out, I am certain of this. "We live below the poverty line." I assure you, this guy wishes he made a big profit, and one day he will.

My point is that there are a lot of ways to attack the "profit" equation in permaculture. It is not just about marketing or just about growing a lot of food, or just about growing really high quality food, or controlling/reducing/eliminating the inputs. It is also about improving the land we are on, and causing property appreciation even.

If you take on farming, and I plan to do so in 2015, then you will be tinkering on the edges of each of those variables for years to come. Sadly the first few years are really lean, and you have to stay in business for five years without having a lot to sell or show for it. If you starve before you get to your 50,000 lbs of production, well, you lose.

So, profit is very important. otherwise you can't call it an investment. It becomes a money pit and you go on welfare, which is really bad. You can't feed the world if you can barely feed yourself.

have a nice day!

Tyler Ludens wrote:I think a lot of people currently who try to go into farming do so because they want to farm, not because they expect to make the "big bucks." At least that's the impression I get from reading this board, the Australian one, and a homesteading forum. People buy land to farm because they want land to farm. Making money at farming seems secondary at best. So the incentive for farming seems to be the farming itself, the process and life of farming, for those who feel a deep desire to farm. They farm, or want to farm, because they love farming, not because they love money.

Agreed. I bought land so that I could eventually farm because I wanted the lifestyle, I wanted the ability to produce my own food to a large degree, I wanted to feed my kids good food, I wanted them to be able to grow up on the land.

The farm must pay for itself (banker, tax man, fuel, etc all cost money). Our farm does. We experimented with raising a number of different things before we found the combination that works for us. Our end product is pork, which we raise on pasture. This produces the quality I want and that sells. Part of the system though is raising other animals to co-graze with them, various plants, etc. It's a system, not a mono-crop. And it is definitely a lifestyle. That is part of it.

It takes time to get the elements working together and figure things out. What I see all to often is people jump in with a lot of money doing a lot of different things all at once. I haven't seen a single one of those succeed yet. The path to success is through persistence.

I think an issue here is that it takes time/money to create either a mass production system or a sustainable system.

Do you want to spend the next X many years trying to feed 'the world's hungry masses', or would rather spend that time creating a better product that will sustainably reproduce itself?

A sustainable system will improve the earth each year, ergo its population. Regardless of what happens to petroleum prices, energy availability, etc, the system will keep producing.

A mass production system degrades the earth, while requiring a lot of external inputs. As the price doubles, triples and and...for those inputs, the system's ability to feed the masses will diminish over time. It can only meet its goal for a finite period of time.

My young helpers don't seem to be looking to make millions, they would be happy to have jobs they like. They are disgusted with society/advertising/big business/big ag etc and want nothing to do with it.

To attract and keep people interested in permaculture as a way of farming and as a way of life, it needs to be awesome and fun and virtuous-feeling. As long as we can eat and live comfortably, we don't need big bucks to have an attractive lifestyle. We need to seem happy.

This doesn't go for everyone, of course, but for plenty of young people, excessive consumption is tacky.

wayne stephen wrote:I guess the guist of my questions are what is the incentive for investing in a 100 acre place vs a 3 acre place ? So the surplus would be greater and therefore the ability to live better and maybe have more toys . Also - what is the incentive for innovation on a larger scale - new plants , tools , techniques . I am asking who would take the risk of the initial investment without a hope of payback - the risk for failure is high .

I wouldn't borrow for 100 acres, I would buy with cash what you can. But, once you have a property and make more than the minimum, what are you going to do with the surplus, however small it is? I would prefer not to have lots of liquidity - but to reinvest the surplus. (in business, your company will actually be devalued to a point for having too much cash on hand - lost opportunity).

Anytime we get ahead and I have a chunk of change available, I buy something or create something with it. We don't just let cash sit around. And now you know why some farmers get big. We have roughly 900 acres, and we will almost certainly continue to grow. After all, we have no loans, mortgages, etc and what doesn't go to the bank, goes into buying farms from those who used up their land, their resources, etc. so that we can turn them into forestry.

Are we wealthy? Well yeah - but we live simply. "The meek shall inherit the earth". I have seen a lot of companies / people go broke playing tycoon on borrowed plumage. But those who live simply (but well) who work hard, eventually save money, which they use to acquire yet more assets. It is a circle that can result in you having more land than you ever dreamed of.

If you don't believe this works, ask the Mennonites and the Amish.

I spent all of yesterday with an official from MINAE reviewing a plantation. He was very impressed on our growth, quality of trees, etc. He also teaches at the university for forestry engineers and asked if I would be willing to take interns from the school so they can study what we are doing. As plantations go, we aren't that big, but we have much better results than normal. We also follow a continuous coverage type forestry - which up until recently required me to fight with the local officials. Thankfully they now see that it is much better that way.

But, I will say most of the time when the goals is money, people don't do well, aside from ripping off others. When the goal is building something sustainable, you might just end up with resources, which is a heck of a lot better than money.

Fred Morgan wrote:I wouldn't borrow for 100 acres, I would buy with cash what you can.

I would borrow if that enabled me to get the tool I needed to work. Do out the math. In almost all cases it is worth borrowing to avoid paying rent, to avoid leasing and to be able to earn income. If you don't own the land then you will hesitate to put in the long term sustainable improvements it needs to farm. A mortgage counts as owning in this case.

If you don't want to deal with a bank, look into an owner financed situation. I've done that three times. Worked very well.

Loans are worth it to gain assets that are tools. Many people say never a borrower be but they're missing opportunity.

I understand where you are coming from, but when you borrow you now are working for someone else - you have to be really careful with this. Often all you can hope to earn off land is in the neighborhood of 5%, but if you have a mortgage on it, now that is going to the bank.

And of course, if let's say you have a mortgage of 15 years, you are betting on 15 years of good harvest. Many, MANY farmers have lost their lands betting on the weather, bugs, etc.

As you said, do the math - start small if you can.

Perhaps I should put in my signature that we own 900 acres of plantations (timber mainly), I do know math - heck about all I do is math.

Fred Morgan wrote: Often all you can hope to earn off land is in the neighborhood of 5%

Do you mean 5% of the value of the land annually?

I think I would like to dip my little toe into this discussion...in a discussion of "feeding people", I believe those people have other needs--the kind which keep them spiritually hungry.

I have met relatively few people in my lifetime who were not moved and changed by their first trip to a farm to actually see how their food was made and what fresh food actually looks and tastes like. Some of them stare at trees and move very uneasily on uneven ground, they have been deprived of contact with Nature....and the natural rhythms of the Earth. Some children are compelled to hug livestock. And I dont think it is just over-interpretation on their part that cows are just big dogs either.....Alot of people, particularly urban people in my opinion suffer from "nature deficiency" and even "nature phobia" . It's in their language even. To some of us, black soil is Life. To them it is "dirt" and unclean, the equivalent of excrement. That's a dangerous concept for urban people to have. And while they may vacation in Cancun or some other spot intensively once a year and feel that they know what nature looks like..they have not really have any connection with the natural world and I believe because they deny to themselves that they are products of planetary evolution, they get sick on a deep level and dont see the basic cause--they are animals which live in concrete and steel boxes 360 days a year. In short zoo chimps without a tree to climb in. That's a recipe for both physical and mental illness.

Its alot to ask a Permaculturist to feed people in the way that corporate agriculture does..its not a fair contest..corporate agriculture runs roughshod over the environment, polluting the groundwater with pesticides and inorganic fertilizers, using virtual slave labor of migratory farm workers, and sometimes utilizing sweetheart deals from local politicians for water access and land access (Big Cattle i am thinking of partiuclarly). Imported Chilean grapes or Mexican Avocados can be cheap and tasty...but the short of it is that a few got rich in the process, and many others suffered and continue to suffer under the system that brings you those products. And that capital gets reinvested in like projects, not sustainable agriculture.

I believe that even moreso than agricultural products, hospitality is something that Permaculture projects and communities should emphasize. Permaculture is, in my opinion still barely a toddler...and the might of corporate agriclture and big money interests progressively makes it hard for ordinary people to obtain land of their own. Young people. Idealistic people. Out of the box people. Permaculture needs converts to the cause, many many times more than there are presently. A family from an urban place who comes to visit and wonder that there are places where healthy food, diginified work, wildlife and wild spaces and peace-inducing housing exist will change those people as they go back to wherever they came. They are the future allies who will vote and soften the greed and foolishness of government and the influence of lobbiests who compel them to pick corporate solutions to food over other models. "Down on the farm" becomes a pleasant, tangible memory. You dont call your Congressman and complain about whether or not your chicken is free ranged. You vote to protect the place you have an emotional attachment to.

About 16 years ago I met a farmer/horitculturalist who espoused Permaculture ideas and had a nice little project going in rural Georgia. I discussed this idea with him even then, about developing a hospitality component. He replied " I'm not interested. Strangers? On my place? The rest of the world can #$$%$# itself. I said, "Yes, and they are. But what happens when your entire region is one large strip mall? Dont you want to see a network of other Pculture farms as your neighbors?" As a buffer to development in your county? " My powers of persuasion were ineffective. I went through the region last year after many years away and was saddened to find my prediction had come true. It didnt even take one generation for to happen...that strip mall and two massive, sprawling housing developments were in full force where previously there were only corn and tobacco fields. When last I looked there was a mega sized Auto Dealership under construction within sight of his property. That would break my heart, personally.....

No I am not interested in feeding 5000 people a half a continent away. But I would be happy to model successful, sustainable earthcare for them. I dont want them to eat my tomatos every day, I want them to jump like rats from the corporate agriculture ship and swim to safety. When there are more of "us" than "them", perhaps the destruction of Planet Earth will slow and honest discussions can take place with politicians and business about the true hidden costs of corporate agriculture, food, population and urban sprawl....

My own projects are still in their infancy but I see my role clearly, I will be growing converts to the cause as well as vegitables and take on both tasks with equal enthusiasm....the alternative...an urbanized planet Earth is too scary to contemplate...and I think it could happen faster than anyone thinks.....

Thanks for reading.

Mike Langtry

Michael Langtry wrote:

About 16 years ago I met a farmer/horitculturalist who espoused Permaculture ideas and had a nice little project going in rural Georgia. I discussed this idea with him even then, about developing a hospitality component. He replied " I'm not interested. Strangers? On my place? The rest of the world can #$$%$# itself.

Not exactly into the "People Care" ethic, was he......

Fred Morgan wrote:I understand where you are coming from, but when you borrow you now are working for someone else - you have to be really careful with this. Often all you can hope to earn off land is in the neighborhood of 5%, but if you have a mortgage on it, now that is going to the bank....And of course, if let's say you have a mortgage of 15 years, you are betting on 15 years of good harvest. Many, MANY farmers have lost their lands betting on the weather, bugs, etc. Perhaps I should put in my signature that we own 900 acres of plantations (timber mainly), I do know math - heck about all I do is math.

5%? Crazy. I do a lot better than that. I too have (well over) 900 acres of mainly timber plus our ~70 acres of pastures. I do know the math, very well since I've been doing this for decades. If you're only getting 5% returns then it's pretty poor land or you're doing it wrong.

This is not an attack on you, Fred. But I've heard people say that sort of thing before and it is plain wrong. I earn my living sustainably farming and sustainably logging. People say it can't be done but I do it and I know of other people who also do it. It's what pays our mortgage, both principle and interest, and more. I didn't inherit our land, I bought it. We have no off farm income. I made my down payment with money I earned other ways before but the farm and forest pay.

Walter Jeffries wrote: I do know the math, very well since I've been doing this for decades.

Is there any chance you might share some of the numbers with us, such as amount of mortgage (or land value), amount of gross income (either as $ or as a percentage of the mortgage/value), expenses versus profit, etc, so we can get a sense of how a successful land operation looks by the numbers?

..and of course any percentage values are going to have a lot to do with how real estate is valued in your particular area...often it has no relation at all to what the land can produce...i think making 5% on the west coast would be doing pretty darn well..

I agree Kari, in areas where land is overvalued, it might be very difficult to produce 5% especially where carrying capacity is low, as in my region. We also have stupidly inflated land values here. $10,000 per acre and carrying capacity is 1 animal unit per 20 acres....

Paying the bills is important, crucial really, but money is not the only way to measure bounty. When neighbors help neighbors with work, when people share large harvests with the community, whether it is with friends or with a food bank or anyone else, the capital is real, yet difficult to measure.

I look at my farm as building a sustainable future, and a huge resource is good will. What is the percentage of the good will that you export from our property, and how much good will comes back as an input?

Tyler Ludens wrote:Is there any chance you might share some of the numbers with us, such as amount of mortgage (or land value), amount of gross income (either as $ or as a percentage of the mortgage/value), expenses versus profit, etc, so we can get a sense of how a successful land operation looks by the numbers?

My exact numbers won't mean diddly to someone else's situation. We live (spend) way below the poverty line so we are able to make it through lean years. But perhaps that is because the poverty line and a "living wage" are set so high. Almost everything we earn goes into paying the mortgage and developing the farm. No toys. No snow machines. No new trucks (we have one vehicle - our delivery van.) We don't go on vacation, travel, on holiday, etc. We're here. Live where you love to be. We're very boring, yet never bored. Focus.

We live extremely frugally. We are able to produce virtually all of our needs. e.g., firewood for heat, food, etc. We buy luxuries (chocolate!) when we have extra but are completely aware that it is a luxury, not a necessity and when times are tight we don't get those things. I have watched people try and start up by buying all sorts of fancy stuff, new trucks, trailers, big iron. I very rarely see that succeed. (I'm racking my brain for even one example of success by that fast track method that I personally know of. Not thinking of any...) It is key to know the difference between need and want. Go slowly.

Land is a need. We bought our land long ago and where it was relatively cheap. I see all too many people lease and say never go into debt. I disagree. Paying someone else a lease, paying rent, etc is more expensive than paying a mortgage, taxes and insurance yet you don't get the ownership in the end. As a result I see people lease and they never make the needed improvements on their land. Often they move to a new lease after several years, either voluntarily or forced out. They lose what they've put into the land if anything and have to start over. Farming is a very long term thing. 20 years ago I did got stuff happening that is paying off now and I've still got things in the works that won't mature for another 20 years or more. Can't do that on leased land, not sanely. Forestry is even more long term. Don't lease or rent land. Buy.

We paid about $640/acre back in the late 1980s. We could have bought a lot less land for a lot more money. Land comes in volume discounts. Buy the most you can afford to purchase and pay the taxes on. They aren't making more of it, for the most part, not the good stuff. (Maybe global warming will change that in some places.)

We owner financed at 5% on a 15 year note with a balloon like a 30 year. Owner financing was a lot cheaper than working with a bank. Besides, banks wouldn't finance farms or forest land - they only wanted to deal with properties that could be flipped. Working with the past owner gave him a lump sum down and monthly payments for what turned out to be almost the rest of his life. He loved it. Get a lawyer to draw up the paperwork - you are wise to have a lawyer check things anyways even when dealing with banks. No, especially when dealing with banks. When the balloon came due we refinanced at about 6% We are close to finishing that off and then we'll own it. Had we leased or rented our land we would have nothing, just a continuing monthly lease payment. I know too many farmers with no assets because they leased. Don't get sucked into that.

Our land was cheap in comparison to most around here. We bought land away from the town centers high in the mountains on rocky soils so it is a lot cheaper than had we purchased close to the city or in fertile bottom land. This is hill country. I make terraces, I raise livestock as they pasture well on what we have. We also do forestry, something else that does well in our location. Other crops are incidental, mostly to feed the livestock such as pumpkins, apples and such which grow very well here. Don't fight the land, work with it.

Location is important. I carefully evaluated taxes, travel, distance to markets and drew circles on the map for what was important. I investigated the towns. Then I looked at land. Make sure you have water and nobody has problematic easements or the like. It is not worth living next to nasty neighbors either so go say hello before you buy and talk with people. These things were part of how I chose our land - making sure it was clear and had what we needed. Also carefully check state, county and town zoning, regulations, etc. Buy with your eyes open. Don't be emotional about it. Be rational.

Don't expect you'll succeed at everything - one of the reasons for going slowly and running lean. People sometimes see our success and fail to realize that it took a long time to get there and we stumbled at things along the way. Learn from your mistakes - you already paid for them. We tried a number of things such as meat poultry (die too easily, won't forage, too small a package), sheep (we're great at raising them but the market is too small and the margin is razor thin as processing eats up 90% of the sale), etc. Our primary farm product is pastured pork. We're very good at raising pigs on pasture without buying grain or commercial hog feed. Details on my blog.

I say run lean, but you also need to have the right tools. Good tools are worth good money. Land is a tool. A tractor is a tool that if you need it is invaluable. Figure out what you really need. Don't be penny wise and pound foolish. There is balance.

We deliver weekly fresh to stores and restaurants year round. We produce a high quality pasture raised pork that people rave about. That is our niche. It took years to develop that market and get the weekly standing orders so that the pigs sell just about nose-to-tail every week. We carry almost no freezer inventory. Our stock is out grazing our other asset. When we need it for sale we harvest it. Until then it grows. That takes timing which takes years to develop. It won't happen over night, neither the market nor the supply.

To see our prices visit our web site and check out the order form on the literature page:

http://SugarMtnFarm.com/lit

Realize that those are the retail prices. 88% of what we sell is to stores and restaurant at wholesale prices which are about half to two thirds of that so don't get starry eyed. Pigs are not the mega-bucks. Live frugally though and they do pay the mortgage and other bills nicely. For other people it is garlic, turkeys, chickens, a vegetable CSA, etc. I know farmers doing all those things that pay the bills with them in whole or part. They took years to get there.

My numbers and what I'm good at don't mean you should do it. Maybe you are a cheese wiz or have a way with whispering cows. Figure out what you're good at, don't just try and imitate someone else. In fact, imitation into a crowded market is a good way to fail. Get ideas but realize your situation will be different. There are resources and life styles that are different from person to person that will make or break.

An example is we spent years intensively selectively breeding our pigs for pasture. They do better on pasture and in our climate than other pigs. They taste better too. It isn't an accident. It is purposeful and took years of careful breeding. You can't just take cull pigs from a factory farm and dump them in the middle of a field expecting them to thrive. There are genetic, cultural and management differences in addition to the detail that pastures differ. Little details can make a world of difference. Start slowly. Grow into things. Find out what you're good at. Find your way. I can't emphasize that enough.

The biggest problem we face is, again like with the sheep, processing (slaughter, butcher, sausage, smoke, transport). Beyond the little detail of simply getting it every week of the year with pigs the processing eats up 36% to 50% of what we earn on every pig. This is better than the 90% that processing cost us on the sheep - baaahhd margins. Our solution is we're building our own on-farm USDA inspected meat processing facility. Since we are building it and we'll do the work we get that additional margin and that helps make the difference. Yes it is work. That's what we do.

The butcher shop is our current Big Project. To get to that point I spent years of research and developing construction techniques. So someone asks my son, "What did you do this summer?" He replies, "I built a USDA meat processing facility.". Except, it takes several summers. 1 year to plan, 1 year to permit, 1 summer for foundation and site work, 1 summer for structural - realize in the north where we are we don't get much actual construction done six months of the year plus we still have the farm and forestry work to do. Good things take time. Our budget is on target for $150K to be able to cut meat and make sausage. Then we'll add on-farm slaughter. Had we hired it done instead of doing it ourselves it would have been about $1.5 to $4.5 million and still would have taken an average of four years according to all the reports and studies I've read. It's been a great homeschool project.

This vertical integration (produce food, on-farm processing, etc) and just-in-time farming (weekly deliveries as the market needs them rather than big batches) lets us maximize the return on each animal. It's a system. There are other details such as our chickens, although we don't sell meat or eggs, are an integral part of making the pork get to the fork through co-grazing, organic pest control and supplying additional protein in the form of eggs for weaner pigs.

Some people have asked if we're Amish(ish) or Mennonite, etc. We're not. We have some similar values but I also value the use of technology in an appropriate manner. However I would never let myself be dependent on it in ways I think will fail. That principle guides a lot of how we do things. Things as simple as not having water pumps but instead using gravity. I know of all too many farmers who fight frozen pumps all winter long. Another guiding principle for us is going slowly. It irritates tailgaters but is safer.

Numbers:
We do the work. No hired hands. No employees. No interns. No volunteers. It is more efficient for us. We're used to working together and know the systems.
We have pros do some work for us where special equipment is needed. Rare event but sometimes worth it. Know when to hire and do it by the job.
- replacing our tractor's transmission.
- having a bulldozer and trackhoe put in a major road, etc.
- Putting in a new utility transformer - I did the underground electric, they installed and hooked up the transformer on the pole.
- Concrete and pump truck for high volume pours. Faster than a hand mixer and a lot easier! I still man the pump hose and we do the concrete work.
We built our house for about $7K. That heats with about 0.75 cord of wood a year and keeps our costs, maintenance, utilities, etc minimal.
- I know many people who spend more in rent or utilities each in a year than we spent to build our house.
- Since the house is small the taxes are minimal.
We're building our butcher shop ourselves too. $150K which will save that in just a few years.
- We do construction every year for something - one more reason to own, not lease.
- Figure out what you need to be able to do and develop the skills.
- Get good at what you need to do and then do it a lot.
We do 2 to 10 pigs a week selling for $500 to $630 typically plus roasters and spring weaners.
- 4 pigs a week on average covers all of our farm expenses and gives us about $15K a year to live on which is sufficient.
- Rinse and repeat. 52 times a year for years on end gives us a lot of cycles to learn on. You get very good at the details.
It's far better than a 5% return.
- The land pays the mortgage, the farm expenses and us. If you hired anyone that would eat up your return quickly.
- Yes, it does take work - This is what we do. This is not an annuity or investment income. File on Sch.F not Sch.E.
- Maybe if you let the land sit, hired people to work it, etc then you would only make 5%. Probably less. Not our style.
It is a style, a life style.
- We choose to live here and there are a lot of benefits that the 5% type math simply misses. This is important.
- Living out here would drive some people nuts. City would drive us nuts. Everyone has their place.

I have a detailed business plan that I keep up to date but these numbers will be meaningless for other people's situations. There are way to many localized variables. Realize things change year to year and month to month. Have fun pushing your pencil. Math is fun but reality is a bit different. Generally it is better - Perhaps in the ways a pencil won't show.

Thank you, Walter.

Tyler Ludens wrote:

Fred Morgan wrote: Often all you can hope to earn off land is in the neighborhood of 5%

Do you mean 5% of the value of the land annually?

Yes, it is a good working number because it is easy to do. Not saying you can't do more if you work hard at it.