Take a deep breath: don’t try to compete

The pertinent question is not how or if small farms can compete, but why they should compete in the first place.

A week ago, I asked here on the blog for “real world examples of technologies that flip the competition in favour of small and diverse?”

I got a lot of comments on this article, some here, but most on Facebook. While many mentioned various smart technologies, I don’t think anybody could point to that this or that technology could make small farms profitable in competing with large farms. Clearly, you can reduce the disadvantages of being small by being a smart farmer and use the best technology, smart management. And some technologies “de-scale” well. Virtual fences was mentioned. One person suggested that the GPS was a blessing for small farms as it allows you to work at night (assuming that you have a day job to live from)!

Automation was mentioned. While automation certainly could make the life of small farmers easier, e.g. by having weeding or planting robots, I fail to see how that could flip the competition. In real life, I am certain that robotics will favour the bigger farms more than the small ones. The end result of a large scale application of robotics in farming will just mean lower prices, which in turn will lead to larger units.

The opportunities for marketing through social media was also mentioned. For sure, there are apparent advantages with that (we use it as well). But it is mostly valuable as a marketing strategy or a relationship strategy, which is not at all about competing with big farmers in the same market, but creating separate markets. It just strengthen my argument that small farms are not competitive in commodity markets – and that they shouldn’t even try (see more below). They can survive, perhaps thrive (see also more below) in other settings, such as directs sale, community supported agriculture, Reko-rings/food assemblies etc.

Some pointed out that small farms can use old equipment, old barns and repair and maintain them to keep costs low. I guess that is very common, especially for extensively managed mixed farms. We have two old tractors on the farm and most equipment is old. It should be noted, however, that it is the drastic reduction in the number of farms and the growth of big farms, that has supplied the market with all these smaller, older and cheaper machines which can be repaired on the farm. Some market gardeners are more into new machinery. There are different strategies for survival.

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Some seem to interpret my post as a statement of that small and diverse farms are not as good as big farms, but nothing can be further from the truth. The fact that small farms can’t compete is not an indicator of their failure, but an indicator of the failure of commodity farming*.

Some suggested that small farms can have a much better production system and use the land and resources better and thus get high yields, while maintaining bio-diversity. And that is true, but alas, also not something that makes a farm competitive in commodity farming. Again, this is not a failure of small farms but of commodity farming.

Relay cropping: My spinach and lettuce is ready to harvest, in between there are carrots and next to the spinach small radishes are growing. In this way space is utilized intensively, and total yield is high (although the stand of carrots is too thin..). Image: Gunnar Rundgren

Many people seem to believe that small farms produce less food than bigger farms. But that is a mistake. The competitiveness of big farms is that they produce cheaper, not more and certainly not better. Some claim that small farms produce 70% of the worlds food. That is not correct - but they could produce all food.

Quite many pointed out that the “big” are (much more) dependent on fossil fuels and fertilisers (which are made of fossil fuels), so that, in the long run, they are not sustainable. Agreed! Of course they are. Shunning oil and using draught animals or just manual labour is more resilient and sustainable. It is, however, also linked to lower labour productivity compared to diesel-driven farming. This means that the income will be on a similar level.

By and large, small-scale farms are better from most perspectives. They are also more resilient as it is “easier”, i.e. less difficult, to maintain production in times of crisis, war or societal collapse.

It is hard

But regardless if you try to compete in commodity markets, build new markets, use best possible technologies, or do “primitive” farming it is hard to be a small-scale farmer living off the land. Period.

There are many people in high-income countries who start small scale farming with the ambition “to make a living”. Most fail. As Eric Suquet jokes: A farmer wins a million dollars in the lottery. A reporter asks her what she’s going to do with all that money. Her answer: “I guess I’ll just keep farming a little longer until it runs out.”

I commented on a similar story seven years ago:

“you can find evidence all over the world that small farms are not viable as commercial production entities providing a normal income. I see wave after wave of young people who have read a book or heard a lecture about organic gardening, of double digging, of the market garden, of holistic management or permaculture trying to make a dream come true. Other kinds of small farmer hypes is the idea that you find a unique line of production, such as herbs, truffles or raising rabbits for meat. Regardless of method and product, most will fail.”

It has been the same story for as long as I have farmed (i.e. since 1977). Of the farms with which we formed the (first?) organic marketing cooperative Europe in back in 1983, hardly any of them are in operation today.

Why should we be competitive?

It is hard, but I believe it is harder than necessary when you try to be competitive. If you, instead, let go of that obsession a weight is lifted from you chest:

“Do we WANT to be more “competitive”? Why? Perhaps some of us want to be more “collaborative” - collaborating with people, with animals, with plants, with soils, and etc.” (Scotlyn, in a comment on my previous post).

My own farm experience started with a very high level of self-sufficiency and very low costs and a corresponding very low income. After a while we became more commercially oriented, tried to develop small scale technologies, stopped making butter, keeping hens, tanning leather, working with horse and focussed on organic vegetables. We became a sizeable producer, with at the peak some 7 hectares of vegetables every year, the rest of the land in green manure crops or forage to a neighbour from which we got manure. But in the end, we, the two families running the operation, had to work much more with a much lower pay than our employees (who were properly employed with union contracts). After spending all time on the farm the first 5-6 years, I worked as a consultant and organiser of the organic sector in Sweden as the main job. After a while, I got well paid and poured money into the farm. As the organic market grew, economies of scale became more apparent and we had to compete with bigger farms with better logistics (our farm was far from markets and logistic corridors which made transportation costly). Gradually, the farm scaled down operations and became more oriented to local and regional sales again.**

In the current farm, Sunnansjö, my wife and I have dropped all ambitions of being competitive or profitable. The farm is oriented to:

- providing excellent food for us and some more people

- optimising multifunctional ecosystems

- being resilient

- creating more bio-diversity, in particular by breaking up rigid land-use categories such as forest, arable land and grasslands.

- providing a nice place to live

- learning

These things don’t pay bills. In order to survive economically, we pursue several complementary paths (in no particular order):

- getting income from outside the farm,

- keeping costs low, both for the farm and for private consumption,

- a high degree of self-sufficiency, including a lot of food processing,

- sales of meat, hides, fruit and vegetables, and

- having courses and events

- having no debt (will pay off the last this month).

Some would say that, our farm is not sustainable. But essentially, I believe the sustainability discourse is flawed. Sustainability, especially social and economic sustainability, is not something that is based on hard scientific analysis but totally dependent on the society and politics, and subject to all kinds of assumptions. Economic sustainability defined as profitable is an oxymoron, profit-orientation is not sustainable at al.

In addition, most farmers, in Sweden at least, have had numerous income streams for centuries. Earlier, they produced all sorts of handicraft, made charcoal, logged or provided transportation services. Today, they are clearing snow on roads, have various side jobs, rent out houses etc. As a matter of fact, also big farms often have non-farm income and often one of the partners have a day job.

One could argue that this is a luxury position that is easy to take for someone who is existentially secure and have various resources. I guess it is. Poverty is a real problem for most small farmers in the world and also in low income countries. But I have observed (I did work with smallholders in third world countries for around 20 years) that also there, successful small farmers have often got income from other sources. And they are also likely to become the big farms in the future. So the dynamic is quite the same. An important difference is that a “failed” smallholder in a very poor country may starve.

The way ahead

Some believe that free markets*** where independent farmers can sell their stuff to consumers represent an ideal; that it is interference by governments or big corporations that corrupt free markets. For sure, that is problematic, but free markets are never fair, powers are never equal, capital will be accumulated by some and not by others. The forces of competition are by themselves as much a problem as government rules and big corporations´ monopolist tendencies (which certainly also are problematic). Therefore, we need to build up systems outside of the prevailing markets. We need to challenge the producer-consumer divide and the notion that food is mainly a commodity to be sold.

I have come to the conclusion that the market mechanism itself is problematic as it reduces food and agriculture to products to be sold and the land to commodity. On our farm, we want to work with relationships instead of transaction as the leading principle. Relationship food is based on personal relationship between those that produce and those that consume and the management of the farm is a relationship between us and nature, formulated somewhat idealistic. Food is in this way an expression of these relationships.

We should see farming as a kind of human ecosystem niche construction****, where thriving ecosystems is as important as the production of food. Exact details will vary, and should vary as culture and ecological conditions differ, but I am sure small-scale farming will be a key feature.

I am well aware of that this vision doesn’t fit well with cities of 20 million people sourcing their food from all continents. But the right question is “Why should there be such cities?”

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* I use the expression of commodity farming here as shorthand for the production of commodities sold in competitive markets. Most farmers just produce a commodity like, wheat, milk, coffee, cattle and sell it in a wholesale market, where they are basically price-takers. The more specialised and niche you are, either in what you produce, or how you sell, or both, the less affected you are by (global) commodity markets.

** There are many more things to say about the development of the Torfolk farm, which I left in 2008. I describe it more in Swimming in a river of change.

*** Free markets don’t exist and have never existed on any kind of scale. On the contrary, markets were created by rulers to control and profit from peoples’ cooperation and exchange. Markets are also dependent on state infrastructure such as private property, standardisation of measures, rule of law and money.

**** Niche construction theory is an ecological concept that is based on that organisms actively modify their environments, altering natural selection pressures and co-directing their own evolution. I use it in a wider sense, not mainly applied to genetic evolution, but also to cultural evolution.