While beginning farmers often start their operations with a passion for local food and agriculture, many struggle with the day-to-day financials and other intricacies of running a business. Tom Cary, manager of the Beginning Farmer Program at Michigan State University, aims to remedy that. The program hosts a series of Farmer Field School workshops to help prepare people to manage the business side of their farms. The program will hold a farm labor roundtable to discuss best practices in attracting, retaining and managing employees on Wednesday, Dec. 14 from 1-4 p.m. at the MSU Student Organic Farm at 3291 College Road in Holt. Cary spoke with MiBiz prior to the workshop about some of the main issues facing new farmers.
What’s holding beginning farmers back?
A lot of farmers come in without a lot of financial knowledge. They’re more driven by the passion for farming, building community and local food systems, all of which are extremely important values that make for a strong business. But without those financial fundamentals, it’s just really hard to run a successful business. One of (our) focuses is trying to frame everything with thinking about return on investment.
Can you provide an example of that?
People make expectations about their initial business plans thinking about growth. They think ‘I’m just going to go to the Fulton Street Farmers Market, and I’m going to be able to sell vegetables.’ Well, you might not be able to get into the farmers market. They might be full or they might not want you because they already have twenty other vegetable farmers. People also may think, ‘I want to buy a piece of equipment that will save me time and labor.’ Maybe that’s true, but at some levels of scale, some equipment just isn’t as functional or profitable because it takes too much time to set it up or turn it around. It’s just trying to think about the tradeoffs with money or labor and those other things and make sure it’s a good decision for you at that point.
Your upcoming session focuses on labor. What are some of the key labor challenges farmers face?
One of the things that’s a fundamental challenge for a business like ours is what do you do for the other three or four months out of the year when you give 100 percent of your time to this farm that doesn’t run year round. How do you deal with that turnover? What kind of training and skill development works best and how do you implement that so you get the best for your workers and out of your workers? How do you help them feel involved and give them leadership opportunities at the farm and help them want to stick around because they’re part of something?
How can farmers address concerns over employee turnover and retention?
Farms are thinking more about year-round production. That’s a game changer to retain labor. I think that’s a smart move, but how do you implement that? … Hopefully a lot of the people who are actually working on farms as workers can chime in and help guide the conversation about some things we’re not thinking about as owners.
Do farmers come into the industry understanding the importance of financial and productivity tracking and other office work outside the field?
I don’t think they often do. For a successful farm, you need to spend some time behind a computer and spend some time on the business — not in the business. Maybe you can start a farm by doing everything yourself, but at some point, unless you’ve designed it for you and one person to run, you have to stand back and spend more time on management, oversight and measurements because you can’t make decisions without good information. It’s just a shot in the dark. Those are the things we are constantly trying to emphasize with the program, not to make it a boring thing that’s just about spreadsheets, but to understand there needs to be a balance of information gathering that goes into your decision making.
It seems like farmers struggle at times with access to capital. What can they do better to attract investment?
They don’t know how to present the information to a lender in a way that they’re going to be successful. The first step is just a fundamental knowledge of getting your ducks in row and having good financial measures and knowledge of what your assets are and a track record of how you’ve been able to be financially successful.
Is there a general avoidance of debt among small farmers?
On our farm, one of things we were afraid of was debt, but it may have been smart for us to go to John Deere and ask for a zero-percent loan on a brand-new tractor. Some farmers think they have to buy everything used, but a surprising thing I’ve learned is that you can’t always afford to buy used. Sometimes it’s much cheaper from a cash flow standpoint to get a zero-interest loan, get the equipment you need and pay it back through the production of your annual vegetable crop. I think there’s a danger in starting with too much overhead, but at other times it’s responsible. So it’s knowing where you are and when you can afford to take out a loan — and should take out a loan — because not having that infrastructure or equipment is an incredible barrier to your success.
What concerns does the farming community have regarding the incoming Trump administration and how it might prioritize small or organic farms?
If anyone knows what Donald Trump is going to do, I’d like to hear it. I think that viable, local communities really depend on having support systems for small businesses in order to compete. The other thing is with the incredible changes that are going on, both in global dependency of food and climate change, I think it’s critically important that we are focused on trying to focus local and regional food system infrastructure so it can be resilient and a backstop as these extremely long and tenuous food system connections might be stressed in the upcoming years.
Do you expect to continue to see an influx of young farmers?
Everything I’ve seen makes it seem like it’s only growing. More and more colleges have student farm programs, whether it’s food-related programs or trying to connect local culinary programs to food production. Attendance and participation in these programs like the Organic Farmer Training program have remained high. There’s more money going into funding it from the government and universities that see this as a relevant part of their education programs.
What’s the overall goal of your organization?
The big question that remains out there and that we want to prove is that first-generation farmers can be successful and that they can build successful farm operations from the ground up and they can transition into the next generation of farmers passionate about local food. That experiment right now is ongoing and there’s a lot of community support for local food. We’ll find out how well it works.
