Question for Eric: The Financial Aspect of Starting a Permaculture Farm

This is a topic that I think interests a lot of permie folks and that is "what would be a sound financial strategy to start a permaculture farm from scratch?"

The strategy I have been envisioning is to save a lot of money while working on a day job and learning about permaculture in my spare time. When my savings are substantial enough, the next step would be to buy land. I think the first step once on the land would be to start establishing the earth works and food forest system while creating cash flow with animals. I like Joel Salatin's fast money turn around strategy with the chickens, but for some political reasons (quotas on poultry and eggs), this would not be possible in Canada without a substantial investment. So I think I would turn towards grazing animals and pigs. I think the important thing at this point would be to keep expenses low so that the required cash flow would not have to be too big.

However, I have a few concerns with this strategy:

1- The price of land is getting pretty high in warmer parts of Canada and my savings would have to be significant to avoid a large mortgage;
2- I assume that my family and I would like the rural lifestyle, but it might not be the case; and
3- I don't have the required knowledge set when I start.

Any thoughts on this strategy or suggestions for a different one?I think my second and third concerns could be addressed by working on a permaculture site before hand, but that means

Hi Adrien, yep that's a pretty central question.

Sounds like you have a good business model idea but just need the startup financing or access to land.

There was a great recent issue of the Natural Farmer magazine (Fall 2012) focused on creative strategies for financing farm and food businesses. It's definitely worth ordering and reviewing.

Many folks don't like doing it but there are bank and government loans for buying a farm in the US and Canada. Here in the US we even have special beginning farmer loans for up to $300,000, I don't know if that is the case for you folks. These are loans for commercial farms (like yours), not for homesteads. Of course they will want to see a business plan or job income demonstrating that you can pay back the loan.

Also you can get a creative land tenure arrangement. I used to run a farm here in the city that rented 26 acres of prime farmland for $1 a year from a group of nuns who were committed to sustainable agriculture. Many other landowners, conservation groups, and land trusts own land that they are willing or even hoping to rent or long-term lease. To learn more I recommend the guide Holding Ground from smallfarm.org.

Eric

Thanks Eric, that is good information.

I think we have a similar program here in Canada to help young farmers. My biggest concern with such loans would be to make sure that no ties are attached that would prevent me from doing it the permaculture way. I know of at least one program helping dairy farmers start that requires an agriculture course.

Another solution might also be to get away from more populated areas where land price is lower. The only problem is that this would reduce the size of the market and thus the profitability. Getting away from populated area here also means getting into colder climates. Any thoughts on the profitability of a permaculture system in something like USDA zone 1 or 2?

Adrien,

I don't have any specific answers to your questions...just some thoughts

Buying land is not always the best option. a lease, either short or long term can get you access to land without the cost and potential liability included in owning land (as Eric mentioned the $1 per year lease) Many land owners get a tax break for agricultural production (in the US at least) so they lease land to someone to create a product and do it cheaply so their taxes drop significantly.

Basically, I suggest keeping your options open and looking at many ways to get going.

Another resource for this approach, specifically with animals are Greg Judy's books which can be found at his website
http://www.greenpasturesfarm.net/

Greg improves some parcels of land so much that the owners gave him a lifetime lease for free!

In the US we have a FarmLink program in many states.

Another option would be to partner with an aging farmer who already owns land and wants to see it improve and become more productive. This might allow you to manage a smaller system and get a taste of farming life before sinking a lot of money into it. it also means there will be some infrastructure already developed and you will often be improving land that has been disturbed by human use already rather than starting from 'scratch'.

From a business startup perspective, check out my reply to Ben's question regarding a Permaculture zone based approach to production.
https://permies.com/t/20151/financial-strategy/Permaculture-business-plan-templates

Getting ready to listen to Eric's podcast for more ideas on this and other financial strategies.
cheers,
Neil