Today's reflection goes out to my father-in-law, an engineer and an MBA, as well as an all-round well-informed critical thinker. He's one of many people who seem at once bemused and skeptical about our decision to take up small-scale farming. In a recent conversation, he brought up the fact that farming is not just an agricultural operation; it is a business. Business is something he knows a lot about, so he prodded me from that perspective a bit. He wondered how I planned, on a small-scale farm, to deal with the all-important business problem of 'scalability'. My response at the time was rather glib ("I plan to keep the scale small."), so I'm going to try to be more thorough here.
'Scalability' isn't a word that rolls off the tongue. It's a term most at home in board rooms among the magnates of mechanized industry. They use words like this because it gets the job done: it captures something they value and applies to all business models indiscriminately. In everyday parlance, we often just talk about the capacity for growth, a grittier word which conjures up the messiness and interconnectedness of organic life.
Anyway...among financiers, 'scalability' is all about the promise of future reward, because a convincing proof of a business model's scalability would mean that a few dollars invested in a startup can demonstrably translate into exponentially more dollars in the future. Not only that, scalability is necessary in order to grow a firm's market share, which is a key sign of success: being bigger, which means better, than one's competition.
So does it make sense to hamstring myself at the outset by putting limits on the scalability of my business, by endeavoring to operate a small-scale farm? After all, I have no illusions that I am swimming against the current of sound business practices (well, at least profitable business practices). To my way of thinking, two major reasons constrain me to a small scale, one a personal reason and the other a matter of natural limits.
First, a personal reason: I am learning agroecology as a novice. Starting small ensures that whatever mistakes I make early on will be relatively minor ones. Beyond this, I have only two ways of producing more output with my labor on a farm: I can be more clever--perhaps finding ways to capture more of the energy naturally available, or guarding more effectively against diseases/pests/predators who would rob me of the fruits of my labor. Or, I can be more powerful, namely, by purchasing or devising tools that will enhance my own physical strengths and abilities. (Of course, others are also willing to increase outputs by increasing their purchased inputs in the form of expendable fuels, artificial pesticides/fertilizers, and animal feeds; but I'm going to begin with nearly nothing, and I'll keep my annual inputs as close to that as I can...).
The reason this recommends smallness to me is that my intellect will only take me so far. I will ultimately be faced with too many problems to solve, or with puzzles too great for my insight, and I will be forced to work within that limit. Likewise, technology will only extend my labor so far. This is especially the case because I won't adopt technology that requires a non-renewable fuel. My labor-saving equipment will only extend my reach as far as a team of draft horses can carry me (until Elon Musk invents an electric tractor? Probably not even then, if this is his idea of an electric truck).
But I'm not just committed to starting small and growing as big as possible. I am convinced that there is a natural limit to how large a sustainable farm can grow. My conviction comes from reflecting on what sustainability requires here. Obviously, my father-in-law is correct to think in business terms. The business of the farm must be solvent. One way to achieve this is to keep costs as low as possible, which argues in favor of my avoidance of purchased inputs. Without expensive and depreciating machines guzzling up money (and polluting the environment to boot), I can feed my 'technology' with pasture and hay grown on my land. By not practicing monoculture, by rotating crops and grouping species of plants with a view to their effect on the soil, I can maximize the fertility nascent in the ground while fending off disease and pests, just by the power of my mind, like peasants have everywhere for millennia.
Will I lose a competition with conventional farmers based on output in bushels per acre? I would think so, most years. However, that is not a measure of the profit per acre. And since my fixed costs will be minimal, my practices will be able to turn a profit even when prices per acre dip beyond the breaking point for others. Moreover, by eschewing the mania of monoculture, my small enterprise is less susceptible to an unpredicted blight or climate disaster that wipes out a single type of plant. What is highly successful under ideal conditions can portend a famine in the wrong conditions. Diversity and a little wildness are not just necessary ingredients for evolution throughout earth history: they are necessary safeguards for farms in the present. Such diversity and wildness can only happen if many more small farmers make decisions for themselves, unconstrained by price fluctuations in oil or federal policies in a given year. Conventional, large-scale agribusiness comes with further costs, besides the risks of monoculture. They achieve economies of scale, but only by 'externalizing' many concomitant costs. A crucial cost is the production of food at the expense of destroying the soil, which ultimately becomes a lifeless place-holder for the roots of plants and not a life-giving earth teeming with nutrients. How does this happen? Vast fields planted with a single crop require huge and heavy machinery to prepare the ground and drill the seed in neat rows with maximum efficiency. This compacts the soil, making plant growth difficult even with optimal sun and water. Hence, chemicals must be deployed to stimulate an otherwise natural process of growth, and more must be supplemented to prevent disease and pests from devastating the entire crop (whereas crop rotation and natural predators perform this function on a small farm). Even as these methods erase the life cycle previously natural to the soil and put it at risk of erosion, the chemicals do not stop their damage but leech into groundwater, giving rise to dead zones in major waterways.
That's just accounting for some of the waste in the environment (and I didn't mention the similar problem of polluted streams near concentrated animal feeding operations, or factory farms, which cannot recycle the overwhelming mass of animal excrement back into soil but lose these nutrients as unwanted 'waste', to the detriment of nearby ecosystems. Ok. I did mention it). What about the impact of large agribusiness on the farming family? The difference between a small farm and a large farm could helpfully be defined at this level of analysis: A small farm is one in which the farming family produces all they need from the resources and energy naturally available on their land, such that their own labor supplies them with a living and anything they do not consume earns a profit. The leap to a large operation depends upon importing energy and resources from outside the farm itself, and this brings increased costs. Importantly, very many of these costs will be exacted whether or the farm is productive. Such costs include: The price of machinery, the erection and maintenance of infrastructure to house animals or store unsold plants, fuel for said machinery and heating/cooling any buildings.
Under the small-farm model, if a given year was not very productive or prices dropped unexpectedly, that only meant the family enjoyed lower profits. They could usually get by on less, since the farm was sufficient for their own needs, and plan for improving on the outcomes next year. Part of that plan might be to shift away from what had failed. So if the price of hogs wasn't enough incentive to keep raising them, the family might take the meager proceeds from this year and try raising sheep, a change to which the farm could easily be adapted.
But this isn't possible anymore for a large farm. The only way a large farm can survive a cyclical downturn in income is by immediately discharging its monetary expenses (often leveraged), and its only source of income is to sell its specialized output. When that one thing has a bad year, assuming the business survives at all, the family must make up for this loss by...producing more the next year. But the problem for this model is that low prices are a cause of the family's struggle, and their only viable response is to increase supply, which will further drive down prices.
This, and other factors, are how large-scale farming methods actually run counter to the interests of the farming family itself, and pit this methodology against neighboring farms. In the short term, this may even make the business model of small-scale farms less competitive, forcing them to sell their land when prices drop so low that they can't even recoup minimal costs. When this happens, a neighbor practicing unsustainable but presently profitable methods will likely step in to enlarge their own farming interest. But do not be deceived: The smaller farm was sent packing not because the methods were deserving of failure, but because the competition was not playing by the same rules. It's like trying to beat against someone using performance-enhancing drugs, to their own detriment, and that of the sport itself. The winner, in the long run, cannot be the one who cheats the local soil and water and community of health. Let's not forget: the large farm suffers under the strain of downward pressure on prices even more than the small farm, because the large farm has high fixed costs and little versatility in output. The only way a large farm survives is by killing small farm competition, thereby decreasing competitor supply. But these competitors are nearly gone...and who will be left to keep feeding the growing agribusiness giants who claim to want to feed us 'affordably'?
We can't afford this going forward. Both the business model and the ecological impacts of large farming practices are unsustainable. And since we're talking about food here, we simply cannot be complacent about the survival of this sector of the economy.