Underpaid Genius

Economic realignment in the industrial agriculture world — based on a shortage of migrant workers, due to the economic growth of Mexico — means that local, smaller scale food production is becoming more competitive in price, and that is stabilizing the capacity for production. As a result, more money is flowing into local food producers hands:

Small-Scale Farmers Creating a New Profit Model - Kirk Johnston via NYTimes.com

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 that 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 that, 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 Professor 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.

And of course, with the local money effect, the money is spent locally. In industrial agriculture, the farms are in — for example — California, so when you buy a tomato at your Philadelphia supermarket, the money moves out of the local community. But if you buy a local tomato at a farmer’s market, that money gets passed around locally, increasing the resilience of the local economy.

Jason Calacanis has taken to sending an email newsletter out, in lieu of the blogging he used to do (personally, for the sake of open social discourse, I wish he would go back), and in the most recent missive he has laid out a modest proposal. Basically he argues that everyone involved in the Econolypse — politician, bankers, stock market mavens, housing speculators, and the average person on main street — are all to blame for this mess.

One small recommendation to start turning things around?

If we’re going to have any chance of bringing America back to greatness, we’re all going to have to work 20% more than we have been.

I’m suggesting that, until America takes care of its debt, untangles the housing mess and gets unemployment under control, we all commit to working six days a week. Yep, move the standard 35-40 hour work week
right up to 48 hours.

For me and my team, this is a non-issue, since we only hire folks who are looking to absolutely kill it, love what they do and don’t consider it a job. Of course, positions at a startup company, where stock options make for a great reward if we hit a home run, have certain advantages over normal day jobs. In the technology industry, a 48 hour work week would be, for most, a vacation.

It was our collective sloth, consumption and sense of entitlement that got us into this mess, and the only thing that will get us out of will be lots of hard work.

While in principle I am for hard work — I work way more than 48 hours a week as it is, already — and I believe we will all have to work hard to make ends meet going forward, I disagree with the fundamental premise of Jason’s approach.

I don’t think that individuals should be coerced into pouring more of their time into the company that ‘employs them’ for the benefit of holding onto their job. And, yes, Jason, for many many people it’s just a job, not their sole obsession.

Of course this is not the case for Jason and other industrialists.

Note that Jason never touches on how this could impact families, many of who are at the breaking point as it is. How does a single mother work Saturday, Jason? It would mean a non-marginal increase in costs for her to hire a baby sitter for a full day. What about people caring for their parents? Will the companies cover these costs?

I think Jason is thinking solely of young people with no children, or families with one breadwinner. But the world is richer than that.

What I think people should do is take the 20% of time that Jason is suggesting should be given to their company as a free donation (or a discounting of their work value), and instead they should dedicate it to other activities that might benefit their lives or those of their friends and neighbors. In particular, dedicating a day a week to food production or distribution could make a material difference for the individual and for their families and localities.

Planting your own garden is a lot of work, but their are numerous regional groups springing up where people can collectively share the work and outputs of gardening. Likewise, many CSA farms are open to people getting involved in food production. And last, getting involved in food coops — helping to cut and weigh the cheese, move the eggs from the reefer to the cooler, work the cash register — and the contributed labor drastically drops the cost of the food, which is shared among the members. Or create you own small scale coop with friends, buying in bulk and sharing the discount. Make your own salami, cheese, and spaghetti sauce.

And of course, the time contributed in these activities is being added to and strengthening the local social fabric: social capital is increased and ties are strengthened between us. Even growing your own veggies leads to more social contact, since you can involve your kids and paents, and people almost invariably share with friends, or have a canning party, or give people pies.

Jason’s suggestion is that of an industrialist. “Economy down? The workers must work more!” And implicit in that is the threat that those that do not will be in the next round of pink slips.

Calcanis wants us to pour more of our time, sweat, and selves into the great airy vastness of the work economy, which will make no commitments to us at all. There are no pensions, no real guarantees of health care, no employee contracts.

I suggest we tie ourselves closer to the earth, by working with others on taking food outside market economics as far as we can. Grow it yourselves, or cut out the super markets and the global agribusinesses that dominate food, share the discounts and work with your friends and neighbors. Become grounded in the earth, which they won’t be able to take away with that pink slip.

If you get a large part of your food ‘free’ — after the investment of your time — you are that much closer to being free from fear, and you are stronger when times are bad.

My hunch is we need to take this time — when companies are cutting thousands it seems, every week — to strengthen the ties we have with other people in our communities, because the ties we have with those who employ us are made of thread, and can be broken with the first strong breeze.

But as groundlings we have at least some ties that are stronger, and pickles on the basement shelves.

[update: Jason informed me that his email newsletters are being posted at his blog, so the 120% Solution can be read there. Sort of a funny way to ‘stop’ blogging…]

Major supermarket chains are trying to integrate local food into their operations, and the problems they encounter reminds me of a saying from Lee Bryant: “When you try to adopt bottom-up practices, everything has to be bottom up.”

[from Supermarket Chains Narrow Their Sights by Marian Burros]

“Regional agriculture systems in the Northeast, mid-Atlantic and Southeast are really quite broken,” said Karen Karp, the president of the company. “Small farmers can sell direct, but there is no infrastructure for middle-sized farmers to get stuff into supermarkets.” There are no warehouses, limited trucking facilities and few distributors.

These growers are used to picking the zucchini and bringing it to a stall at a farmers’ market. In order to sell to grocery stores, they have to learn pricing, invoicing and ordering systems as well as post-harvest handling techniques that include chilling, sorting and grading for size and color.

Big retailers have even more work to do. Used to making just a few phone calls to large produce distributors, often thousands of miles away, they do not have the setup or the personnel to deal with individual farmers who deliver to the back door.

Some of them are reluctant to do so and small farmers either have to join a co-op or find a distributor who can deliver to the supermarket’s warehouse.

The chains also have to change their purchasing practices to make room for seasonal local produce instead of being locked into a year-round contract with one source in order to insure the lowest prices.

“It takes innovation and reallocation of resources,” said Mr. Nicholson of Red Jacket Orchards. “It takes passion, and patience to get good collaboration. They have to be willing to spend more money because it’s costlier buying from small growers.”

Ms. Karp said: “If retailers want to deal with these farmers they can no longer push all the risk about food safety and quality assurance back on the individual farmers, who can’t bear those costs.”

Which could be called the ‘Walmart effect’ — as when Walmart ordains the dimensions, variety, and price for tomatoes, effectively controlling all aspects of the entire agricultural food chain for tomatoes based on their control of the end point of sales.

One of the attractions of a fully localized economy is taking control out of the hands of large chains, and seeing the possibility of small groceries buying in smaller quantities from local, small food producers. Cutting out the (growing) costs of long-distance transport — and the subsidies implicitly being provided to the transport industry by taxation and government support of the highway systems and related infrastructure — could translate to good economics around local distribution.

At certain times of the day, in many American cities, 30% or more of the traffic is related to food distribution. The costs of that are reflected in the atmosphere, the funds allocated to roads and intrastructure, and the direct costs of food.

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