save the family farm
"When our existing assumptions break down, it's … those who dare to think differently, who are needed to reboot the system…. The new is struggling to emerge … to move beyond ideology.”
—David Fuller, founder of Rebel Wisdom
The anti-establishment on both right and left is concerned about economic sustainability. Within both groups are many who see the fragility and unfairness of our current global economy. We need to support thought leaders who provide a common ground and foundation for respectful dialog, which may enable us to find ways to cooperatively advocate for policies. We can also share work-arounds to help us get thru what may be a looming economic crisis, or simply a slow decline of prosperity.
Market Pressures
When financiers get creative, it often hasn’t gone well for those of us who have trusted plain old savings account plans. Instead of getting pissed about losing out, maybe it’s time for us to follow their lead. Let’s get creative with ways to manage far more valuable savings: the farmland.
If you have friends who are farmers, you may know many have been struggling to keep their small farms. Although there are a few hobbyists who take the farm tax breaks and only produce a few token products, many whose families have farmed for generations work a side job to make ends meet, and still are looking at foreclosure or farm bankruptcy as a likely outcome. Small farms can’t even manage a subsistence lifestyle any longer. Most of them aren’t the type to complain, so they need others to complain for them. It’s not widely known there has been a growing mental health crisis because of the stress they are under. They fervently want to maintain their farm and small community culture. It’s important to find new solutions, because they provide essential food security in an increasingly fragile food economy. The world only recently reached a point where more than half its population lives in cities, because small farmers worldwide face similar pressures to find a better-paying livelihood. This shift to an unsustainable mass food production and transport model is based on maximum short term profit. For example, fish caught near the U.S. is sometimes shipped to China for processing then back to the U.S. for consumption, to take advantage of cheaper labor. This not only creates pollution, it keeps U.S. wages lower.
Government Help? Too Little, Too Late
The government knows that many small family farms have found it impossible to compete with government-subsidized agribusiness. Small farmers can’t and won’t buy politicians though, and the small concessions made for these farms aren’t helping much. Most don’t qualify for FDA small grants or loans, and loans put them at risk of mounting debt. Property taxes are a problem where they measure land value as residential real estate instead of taking into account of farmland that has low profitability during some years. Most help comes from state or local levels if it comes at all.
Creating New Financing Models
For decades, ecovillages have been developing and testing financial models for co-ownership of land, some more successfully than others. Understandably, most farmers do not want to co-own their land or farm operations, but if given a choice to sell shares of ownership to trusted family members and friends, instead of potentially losing the farm to the bank or failing to qualify for a loan, many might be willing to. They need only to have this presented as a viable option with low-cost implementation and a clear contract, which might include a plan for the farmer to buy back shares eventually. Here are a few models:
Credit union financed: This has been done, and at some point the details may be posted here. A credit union that is willing to manage a multiple-owner loan would hold the title after arranging a loan. Ask about "mixed mortgages." The members who contributed to the down payment, or who are buying in at a lower level of shares, would each have their share of payment to make, and their share of ownership. In a worst case scenario, the land would be sold and investors would get their investments back, with the credit union getting their percentage.
Group-financed: It benefits banks to have all the risk be on the individual; it's simple that way. It is a challenge to find small banks or credit unions willing to take on co-ownership as described above. Alternatively, if the farmer’s family and friends pooled enough to pay off the land entirely, such as by moving retirement funds into the land purchase, it could be fully co-owned by the group. The investment would be more secure than many types of investment, because it would be backed by land. The title could be held by the farmer if title companies are unwilling to have co-owned titles, but with a legal document that divided the ownership trust. The farmer would make payments not to the bank but to the shareholders, who would have the added security that in a time of crisis or disaster, they would have a place to go. The farmer and another member would have the responsibility of record-keeping for the group, and making sure their records match.
Grant-financed: Most of these foundation-funded grant lists are available for individuals to apply for. You don't need to partner with or be part of a non-profit.
Additional financing options: Here are several financing options for cooperatively funded projects.
Cost-sharing hasn’t become a wide-spread practice because our economic model and our culture is focused on individual ownership. It’s a solution that presents new challenges, but we are at a crisis point in so many ways. It’s time to try unconventional but proven models.
How Greens Can Help
Left-leaning conservationists, is preserving small farms a cause you could get behind? Many non-profit organizations offer what help they can, yet they often have few resources. If you’re interested in self-employment, you could make a side project and possibly eventually a consultancy of finding relevant farming grants funding and partnering with non-profits to apply, or working with farmers to apply directly. Most farmers have neither the time nor the experience needed to (a) investigate which programs they might qualify for, then (b) negotiate the complex application process, with no guaranteed outcome. They need a more direct route for reliable funding. You may find grant resources available to help farmers in various ways:
Relevant to the financing options above, grant funding could be used to pay experienced lawyers familiar with real estate finance to set up the contracts referred to above.
A non-profit that found the right funding partner could act as a land trust manager. It might set up mini conservation easements, with requirements for organic farming or certified cruelty-free animal husbandry, in exchange for helping farms get the legal work completed with minimal expense and helping to coordinate or contribute to the financing. Farmers are interested in this option, but it is typically only worth the expense and effort for large ranches. Affordable small-scale options are needed.
A non-profit could hire tax accountants to give low-cost sessions to farmers so they can get tax breaks they qualify for but may not know of.
You could get mediation training so that you could be on staff at a non-profit or on call as a consultant to help manage disputes that may arise among co-owners.
Grant funding could also be used to disseminate information about funding resources by direct mailing flyers to small farmers or to farm-specific publications everywhere. Yes, the trees…but farmers overall are an aging group, and many don’t have the time, easy access, or experience to look up online information.
Movements to eat local are gaining traction, but many for-profit ventures still can’t prosper with market forces that make mass produced food so much cheaper. Partnering with a non-profit could help farm-to-table and other for-profit farm businesses to stay afloat for a critical time period. Just as rooftop solar power needed time to reach a tipping point to be on parity and now in many locations cheaper than coal-electric, we can expect a time past peak oil when locally produced food costs less than food transported from the southern hemisphere.