Would local farmers be stronger without profits?

[Pat Coyle]

Demand for healthy foods grown locally is on the rise, yet most local farmers struggle to earn profits. The situation is especially tough for small farmers growing organic produce, and raising drug free, free-range, grass-fed livestock. This is a bad situation. Our people are getting fat eating processed foods. Pollution keeps getting worse as we ship food around the world. Meanwhile, our energy supply - the gas that drives the tractors and the trucks - is in jeopardy. , and our best source of healthy food - grown near where we live - is hanging by a thread. Is there any way to save the local farmer?

Here's s thought: What if local farmers became not-for-profit organizations? Or what if farmers partnered with existing 501C3s? The non-profits could become fiscal agents, and the farms could provide educational services and programs for the 501c3s/.

Would this strategy save the local farm? Could farmers use their new not-for-profit status to raise money from donations, in order to provide food and educational or ministry services to the public? Would this strategy help farmers feed people and strengthen their financial position at the same time?

Before you throw this idea out as hogwash, recognize that it has been suggested lately that the NY Times might become a not-for-profit institution...this idea follows the same logic described above...take an institution that is indispensable to society, yet losing money, and save it by changing its tax status and business orientation. If this can happen with media companies, then why not local farms like this one?

Do you think loyal customers combined with charitable subsidies could help our local farmers grow? Share your thoughts here

[Joe Weingarten]

They would be out of business in a flash and we would be very hungry.

[Pat Coyle]

They're going out of business now...you think helping them save a few thousand dollars a year on taxes, and allowing them to raise a few bucks from donations would speed this process?

[Beth Henkel]

While it is interesting to consider an NFP status for farms, farmers now do not pay income taxes -- if they play it "right," they get checks from the federal government. But that happens when they grow commodity crops -- monoculture type crops. The problem is that our farm policies are counter to the needs for locally based produce. California and Florida and other states get subsidies to grow produce -- not Indiana. Here, farms are subsidized to grow is corn and soybeans. If they do not grow those crops, farmers lose their subsidies.

What we need to change is the farm subsidies.

See, for example,
http://www.organicconsumers.org/ofgu/subsidies.htm

[Robby Slaughter]

The economics of farms are tremendously complex. Any major change must take into account two inescapable factors: subsidies and climate change.

When the government provides tax credits or cash payments to corporations, it is seen as an incentive to take risks and a way to stimulate the local economy. But when the government does the same for non-profit organizations, we tend to think of the action as social welfare. In fact, many non-profits actively advertise how little money they receive from government grants. If we have subsidies for non-profit farms, but we don't want government-run farms, then we need a reasonable explanation for why there should be a middleman between the government and the farmer.

Climate change is perhaps more of a challenge. Record heat waves (like in 2003) are threatening the wine industry. Historically, most record innovation comes from risk-taking, for-profit corporations, and the demands of climate change may require the aggressive nature of business. Alternately, one could argue that poor stewardship and a profit-driven obsession with genetically-modified crops has helped to create the problem. Even if you don't believe in global climate change, the rest of the world may continue to limit carbon emissions and cause price hikes for oil and gas. Even non-profits pay full price for fuel.

I think a better approach is to encourage urban farming. First Lady Michelle Obama has a garden at the White House. The book Food, Not Lawns suggests a radically different approach to the American dream. The
vertical farming movement is gaining momentum. All of these approaches are relatively untested and might be well-suited to both a for-profit and a non-profit model. And of course, farmers can continue to provide crops that are better suited to traditional approaches.

[Sean Feeney]

Agreed, vertical farming is a far better solution than further subsidization.

[Neal Brown]

Word!

[Brian Thurber]

I think this goes back to education. Most people don't know that the cow they ate came from a barn with 10,000 other cows jammed in there. If one gets sick, they give them all antibiotics. At the store it all looks the same, whether it came from a healthy cow or not. We therefore buy hamburger on price alone. When consumers are educated enough to care, local farmers will be able to charge the premium they deserve for not taking short cuts

Brian

[John M. Feeney]

How can changing the Tax status help, when the entire farming industry has been leveled, butchered and in no means reflects anything we once concieved this natural industry to be. One minute your paid NOT to grow something, the next you have to with the certain conclusion when the smoke clears your still in debt. Every year we see the same thing - businesses running Debt Equity operations.

Until real Government policies are changed that support, enhance and put the American Farmer FIRST, all the strategy ideas will never help. We cry about the Auto Industry that needs a bail out, yet we have been pleading through (4) Presidents the American Farmer is the corner stone of what made this country.

When the LOCAL FARMER IS GRANTED THE OPPORTUNITY TO SELL THERE PRODUCTS TO THE HIGHEST BIDDER, LIKE ANY OTHER GLOBAL MANUFACTURER, only then will we have the potential to see change.

[Thomas Dale Zabel]

I can't speak for the NY Times. Maybe we would be better off it they simply went away?

It seems that the best ideas had to do with restaurants and individuals buying direct from the farms. You get fresher food and maybe save some money while the farmer makes more than selling through a large company.

Of course, while a lot of us may enjoy the farmers market or going out to the farm to get our produce, others want to get the convenient items (like frozen veggies) from the supermarket. We may well be better off in some ways, though, if the individual farmers are more successful. What about the idea of committing to buy a certain amount of produce from your local farmer at a certain price? Maybe, if you pay in advance you get a discount and the farmer gets some working capital? I'm all for people working out their own deals and making their own choices about what is best for them.

[Kevin Pastore]

It's an interesting concept, but I have difficulty thinking any industry would prosper under such guidelines. The entire engine of commerce is based upon the desire for a return on the work put into it. If there is no profit, where is the motivation to create a good product? And if the product is no good, then why produce it in the first place? I know there are going to be arguments by those on the other end of the political spectrum who may suggest that capitalism is the root of all that is wrong, but I still believe that without a motivation for success, no one can achieve to their full potential.

When you start talking about subsidized big farms, etc... I understand that the competition is unfair. The solution, then, is not to force farmers into not-for-profit status, but to remove the subsidies (read: yours and my tax dollars) from the big producers, and make them compete. Couple that with a change in the tax code (flat tax, fair tax, or anything to make it more level), and let capitalism work! The big producers, with inferior products, would lose out every time, and the small farmer could even make a comeback.

[Pat Coyle]

My experience is limited to my farmer. By that I mean, the farmer who produces 100% of the milk for my family and most of the eggs we buy. He loves being a farmer. Loves producing good food for people. Loves to see the blessing good food is to the body...those are his incentives. But he cannot live without some cash margin in his business...all I was suggesting from this concept is that it might make up the small % of income he needs to go from small loss to small gain each year. There are other incentives which are nonmonetary. The same reason many people like to use social networks, for example. For that matter, it seems to me that people used to go into medicine because they felt gifted in that direction and wanted to help heal people...when it get to be about primarily money, whether we're talking about food, healthcare, energy, educationthings get distorted, don't you think?

[Shari Boultbee]

Here is a CSA that is up and going in Upland. http://www.vicm.org/whatisacsa.htm
They are part of a not-for-profit ministry. Here is the site: http://vicm.org/index1.php
We visited the farm last week. Very interesting. Fun for the kids, food for the family.