Small farmers creating a new business model as agriculture goes local

The cultivated rusticity of a farmers market, where dirt-dusted beets are status symbols and earnest entrepreneurs preside over chunks of cheese, is a part of weekend life in cities across the nation as the high days of the summer harvest approach.

But beyond the familiar mantras about nutrition or reduced fossil fuel use, the movement toward local food is creating a vibrant new economic laboratory for American agriculture. The result, with its growing army of small-scale local farmers, is as much about dollars as dinner: a reworking of old models about how food gets sold and farms get financed, and who gets dirt under their fingernails doing the work.

“The future is local,” said Narendra Varma, 43, a former manager at Microsoft who invested $2 million of his own money last year in a 58-acre project of small plots and new-farmer training near Portland, Ore. The first four farmers arrived this spring alongside Varma and his family, aiming to create an economy of scale — tiny players banded in collective organic clout. He had to interrupt a telephone interview to move some goats.

Economists and agriculture experts say the “slow money” movement that inspired Varma, a way of channeling money into small-scale and organic food operations, along with the aging of the farmer population and steep barriers for young farmers who cannot afford the land for traditional rural agriculture, are only part of the new mix.

A looming shortage of migrant workers, with fewer Mexicans coming north in recent years, could create a kind of rural-urban divide if it continues, with mass-production farms that depend on cheap labor losing some of their price advantages over locally grown food, which tends to be more expensive. From the vineyards of California to the cherry orchards of Oregon, big agriculture has struggled this year to find willing hands. Local farm sales are becoming more stable, predictable and measurable. A study last fall by the Department of Agriculture said local revenues had been radically undercounted in previous analyses that mainly focused on road stands and markets. When sales to restaurants and stores were factored in, the study said, the local food industry was four times bigger than in any previous count, upward of $4.8 billion.

More predictable revenue streams, especially at a time when so many investments feel risky, are creating a firmer economic argument for local farming which, in years past, was more of a political or lifestyle choice.

“How you make it pay is to get closer to the customer,” said Michael Duffy, a professor of economics at Iowa State University, capsuling the advice he gives to new farmers in the Midwest.

Labor, as it has been for generations in the United States, is still the big wrinkle for local growers. But in many cases, experts like Duffy say, the local food system is increasingly going its own way, differentiated from the traditional labor pool of migrant workers that the United States’ mainstream produce system depends on. Many larger local farms hire Hispanic workers, but at more farm stands and markets, buying local also means, in subtle or not so subtle ways, buying native.

“A byproduct of local food is that local hands are more likely to be producing, harvesting, packing and marketing it, especially for new farmers on small-scale farms,” said Dawn Thilmany McFadden, an agricultural economist at Colorado State University who is part of a leadership team for a training program for beginning farmers.

In other instances, Hispanic entrepreneurs who had worked as low-wage laborers are now becoming entrepreneurs. A 3-year-old nonprofit group north of Seattle, Viva Farms, specifically aims to help Hispanic farmers get started, with assistance in language training and in understanding the vagaries of the marketplace.

“We work harder now,” said Misael Morales, 35, describing the main difference between life as a farm laborer and as an entrepreneur.

Morales came to the U.S. from Oaxaca, Mexico, as a teenager, and last year he started, with his brother, Salvador, 32, a 1-acre plot at Viva Farms. They mainly grow lettuce for markets and restaurants in Seattle.

“Early or late, when something has to get done, you do it,” he said.

Viva Farms’ director of business and organizational development, Ethan Schaffer, said former wage workers like the Morales brothers are often shocked when they realize the prices and profit margins that local organic produce can fetch — something, he said, that rarely penetrates down to the daily life of a migrant picker.

“They get the ag part, and once they realize how the market works, they’re off and running,” Schaffer said.

Other new farmers, like Christopher Brown, 26, a former Marine infantryman who worked his first day last month at Grow Washington, an organic farm north of Seattle, have more complex motives. Taking a break from the carrot-cleaning table, he said he dreams of building an organization to help bring other veterans into local farming.

Other urban-focused farms, including one in Oregon City, Ore., called C’est Naturelle, are offering, starting this month, one-stop shopping services: community-supported agriculture subscriptions to supply a family a full diet of food from one place, from eggs and butter to beef and greens.

Varma’s project near Portland, called Community by Design, was inspired, he said, by the Slow Money movement, which has emerged in recent years as a vehicle for financing local, organic food production through groups like Slow Money, a nonprofit based in Boulder, Colo., that connects investors, entrepreneurs and farmers. Of $18 million raised in the last two years by Slow Money, $4 million — the biggest chunk — landed here in the Pacific Northwest, said Woody Tasch, the group’s chairman.

But the economic path forward for local food is still in many ways difficult.

The federal farm bill, passed by the Senate last month, has provisions to support farmers’ markets. But in Washington state, a program aimed at helping growers build direct marketing relationships with grocers or restaurants died last year in a round of budget cuts.

For Jenny and Alex Smith, both 25, a couple since they met in college — now first-year farmers on a tiny plot about an hour north of Seattle — the economic equation comes down to lowering one’s costs and needs.

They live in a recreational vehicle with no television or Internet service, and they hope to break even this year, earning perhaps $1,600 a month through farmers’ markets and subscriptions for weekly produce packages, so far mostly from friends and family. But they say a farming life still feels, to them, full of promise. They had boring office jobs in Seattle, they said, and now they have a farm dog named Banjo.