General Discussion

The economics of "locally grown" [split from New England]


General Discussion 7

The economics of "locally grown" [split from New England]

danieljdwyer | Mar 12, 2009 04:59 AM

Sorry, but locally made has to equal expensive. A small farmer's major expense isn't raising his animals; it's paying the mortgage on his farm. Do you know how much ten cleared acres costs in Iowa? Do you know how much ten cleared acres costs in Connecticut? If we're talking about the straight up economics of it, to make the same profit as a function of costs of living, a farmer in Connecticut would have to charge an order of magnitude greater than an Iowa farmer to clear the same functional profit. Forty percent more doesn't even come within a thousand percent of profiteering.
It is also a far greater strain economically to be a small farmer than it is to be a big agribusiness. It's virtually impossible to set up anything but a small farm in CT. To start with, go ahead and try to find over a hundred cleared acres. You won't succeed. Now try to find a hundred acres, cleared or not, that a town is willing to let you use for farming. Possible, but very difficult. Most towns in Connecticut want to keep any large lots zoned for residential subdivision, because they'll make more in taxes from ten half acre residential properties than they will from one hundred acre agricultural property. Now, here's the hard part: try to get any bank in the northeast, even with the help of the state department of agriculture, to give you an agricultural loan for over a million dollars. Maybe if you're an established farmer, looking to expand, you have a chance. But a start up? No chance in hell.
Now, since you can't set up anything more than a small farm in Connecticut (and yeah, there are a few large farms in the state, but they're all either not locally owned, or have been in the same family for generations), you can't collect much in the way of federal farm subsidies. Farm subsidies are designed to keep the costs of factory farmed products low. They do almost nothing for the farmer producing a product that's worth buying. So, not only does that big Kansas agribusiness pay substantially less for the land that it's able to pack more chickens on to (think something in the order of a nickel for every dollar, combining the factors of the cost of land and free range versus feed lot, and that's being generous), but they are given federal tax dollars. Now, thankfully we finally have a certain someone in a certain highest executive office in the nation who understands that this is an equation that is leading to our nation producing mostly really shitty food, and we'll soon see an end to subsidies for agribusinesses with over half a million in net profit.
But, wait a second, half a million in net profit? Think about that for a second. That's an improvement over the current system. And it's still putting the limit at half a million in net profit. Your Connecticut small farm is lucky if they're making one fiftieth of that in profit. Most Connecticut farms barely break even. To be fair, for a small farm, breaking even still means you have your home and food covered. But don't pretend like any of these guys are wearing Gucci suits and driving German luxury cars. In most of the towns in the state that are still lucky enough to have farms, farming families are the poorest in town. I grew up in a town that had about two dozen small farms when I was in elementary school, down to a dozen by the time I was in high school, and less than half a dozen now, a decade down the road. All of the kids I went to school with that had parents that farmed got their school lunches free, and wore clothes from Goodwill. Half the other kids in high school drove a BMW to school every morning.
Profiteering? Honestly, you've got to be kidding.

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