Flee to the Fields, part 1: Why farming is not a business

 For years I've been vaguely aware of the Catholic Land Movement that was initiated in England in the interbellum period between the two great world wars. Its promotors included G.K. Chesterton and Hilaire Belloc, writers whom I've admired for years. Their project, in short, was to foster a return to the land. They saw the rise of industrialism in England -- the self-styled "workshop of the world" -- as being inherently inimical to basic human thriving. Man has "an affinity for reality," one of Land Movement's promotors argued. "The elements of life -- the cleansing earth, the seasons, the contact with primary things -- are necessary to sanity."

The highly idealistic Land Movement sought to train Catholic men in the agricultural arts and settle them on small plots of land, both to farm and to raise their families in small, closely knit, faith-centered communities. Then World War II intervened: the world changed dramatically, many of the most prominent promotors died, and, sadly, the budding movement died out.

But the Land Movement's founding documents endure in a book entitled Flee to the Fields, which Rosemary purchased for me last month as a Christmas present. Having started reading the book just yesterday, I'm only two essays into the slim volume. But I'm so taken by the ideas expressed therein that I'm inspired to restart the old Garlic and Sapphires blog. My intention here is to write a series of posts on particularly pivotal insights that I've come across in my reading. In each entry I'll lay out in the insight in context, and then I'll reflect on it in light of my own farming experience. Perhaps I'll be enthusiastic enough to write daily; perhaps life will distract me, and I'll slow down. 

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The problem of simple versus compound interest

The first essay in Flee to the Fields was composed by Herbert Shove, who was a British naval commander in both world wars as well as a self-taught economic theorist. Among many other insights, Shove notes that modern capitalism thrives off of compound interest. The idea is that profit is calculated from ever-increasing principal balance. With burgeoning enterprises, this makes sense because such businesses have the potential to be ever larger; they are held in check only by the market forces of supply and demand. If there is a demand for flat-screen televisions, then a maker of flat-screen televisions can chart an upward trajectory in production, consistently showing a profit that compounds as the business grows in size. While one may certainly question whether such a trajectory can continue indefinitely, even in industry, that would be a matter for another essay.

What works (at least temporarily) in industry, Shove argues, does not work in agriculture. A farm may briefly take on the trappings of compounding profits by improving its efficiency to squeeze more out of a flock, a herd, or a parcel of land. But eventually the interest stops compounding because nothing more can be squeezed out of what is available without adulterating the quality of whatever is produced. The principal is what the principal is: so many cows produce so many hundredweight of milk per year; so many acres yield so many bushels of wheat per season. There are limits to what the land can produce or the size that an operation can be. Interest in farming is simple, Shrove writes, not compound, because the principal remains constant.

When agriculture is run like an industry and has industrial profits demanded of it, it's quickly run into the ground. Whereas industry turns a profit by "reducing the time cycle of manufacture," agriculture is bound by a "rigid seasonal time factor." Also, both industry and agriculture reduce their wage bill by turning to mechanization. But whereas industry pays for that mechanization by expansion and by diversification into an near endless array of manufactured goods, expansion in agriculture can only go so far because a nation only needs so much milk, so much wheat, and so much corn and soy. 

And thus capitalistic agriculture-as-industry rapidly becomes a dead-end. "The seasonal 'simple interest' return from land must, as the speeding-up process continues, lag ever further behind the cyclic 'compound interest' return from trade or manufacture."

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Reflection

Shove's argument spoke to me because I see the market pressure on farmers all around me here in Wisconsin, the home of a dying dairying culture. It seems that dairy-turned-industry is in the last throes of the dead-end that Shove predicted for industrial agriculture more generally. Farmers were encouraged for years to turn a profit by expansion; for years they looked very much like a burgeoning industry, and they expanded and mechanized accordingly. Now the market is glutted, the milk price has tanked, and farmers are saddled with the debt from facilities they can no longer afford and with more milk than they can sell, at least at a price that off-sets their debt. Ironically the only way out that many farmers are able to see is to produce even more milk. 

The expansion approach may work for a few mega-dairies in the short term. But how long will it be worth it as the profit margin narrows even more? What are independent mega-dairies to do now that Walmart and other major retailers operate their own milk facilities because their loss is less than the commission they'd have to pay to independently owned dairies? Expansion, it seems, is no answer at all in the long run: ultimately mega-dairy agriculture will be swallowed whole by the commerce industry. We know this because it's already happened with poultry farming, and this is exactly the pattern that retailers are following with dairy. Most all of poultry sold in the States is raised under exploitive, non-negotiable contracts with companies like Tyson delivering the birds and the feed and the farmer (contract employee, rather) taking on all of the risk. This is the bleak future for dairy too.

I don't pretend to know the path forward for my fellow farmers who are invested in dairy or poultry. In fact, I don't know what the path forward is for any farmers of any stripe, given that the general presumption is that farming is an industry and therefore must expand in size and scope in order to turn an ever increasing profit. I remember being asked about cashflow by the FSA farming representative last year while applying for a loan for our small, second tractor for our farm. Apparently it was a red flag that so little cash was "flowing" through our farming operation. It was explained to me that, ideally, I'd sign up to grow significantly more produce next year in order to raise the cash flow. It mattered not in the least that it would require me to hire an employee or to further mechanize, or possibly both. Apparently the important thing was that I become larger and therefore have more "profit potential."

The irony seemed lost on the FSA representative that our little farm had made more money for our family that year than many other, far larger farms that had much more "cash flow." We had no employees to pay and (until that second tractor loan came through) no debts to service. We made plenty of money. It's just that our static enterprise was producing simple interest; it was not compounding. 

My resolve then -- now confirmed and strengthened by my reading of Shove's essay -- is that I need to avoid the industrial treadmill in my farming enterprise. Farming for me, ideally, will bring in the "simple interest" of a living income. We do have some growing yet to do as we learn fully to utilize our beautiful plot of land. Indeed, the income will grow together with my growing gaggle of boys; then it'll slowly ebb as they age out and move on to whatever God has in store for them. I have no pretensions to "growing a business." I'll stick to growing squash, brussels, garlic, and cabbage for those few folks who appreciate good food enough to pay what it's worth.