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Leasing Land Archive

Debt and American Chicken Farming

August 2, 2016

 

"What do you mean 'I have to move'? I live here."

“What do you mean ‘I have to move’? I live here.”

This handy infographic explains the economics of poultry production from the perspective of the typical American chicken farmer. It’s not just a tough life: farmers bear a great deal of the economic risk (in the form of debt) that allows you to buy that cheap broiler bird in the supermarket. Farmers take on long-term debt in the hope of acquiring short term poultry production contracts, the terms of which are skewed in favor of the big poultry buyer.

Does this knowledge encourage you to buy from a farmer that does not participate in the “Big Chicken” system?

Hat-tip, Jordan Green – Farmbuilder.

Smart Leases for New and Beginning Farmers

February 12, 2015

by Jason Foscolo

Everyone interested in becoming a farmer should read this piece from Salon entitled “What nobody Told Me About Small Farming: I Can’t Make a Living.” The author, Jaclyn Moyer of South Fork Farm in Placerville, California, shares some important insights into the financial hardships that are a fundamental part of being a new farmer. As you can tell from the title of the article, she is open and honest about the financial difficulties she and her partner face. This kind of honesty is too rare within the new and beginning farmer movement, and Ms. Moyer should be commended for sharing her insight with such candor.

This bit go us thinking about the importance of good negotiating during the agricultural leasing process:

I didn’t say that despite the improvements we made to the land— the hundreds of yards of compost we spread, the thousand dollars we spent annually on cover crop seed to increase soil fertility, every weed pulled — we gained no equity because we didn’t own the land.

The loss of equity is an astute observation that not many tenant farmers realize, and it’s particularly true for South Fork, which is organic certified according to its website. It is more challenging and expensive to increase soil fertility when working within the restrictions imposed by organic certification. These additional costs do indeed amount to a transfer of equity from the tenant to the landholder. When farm tenants assume costs in order to improve soil quality, we generally recommend negotiating either for:

  • A rebate that returns all or some of the cost of those agricultural practices to the tenant; or
  • A long term lease that enables the farmer to recoup the expenses over several seasons.

Soil fertility is not some switch that can be turned on. Often it takes several seasons for farmers to achieve their desired profile. It is, therefore, important that the farmer gets a lease that allows them to stay on the land long enough to reap the benefits of their efforts. For farms that are converted from conventional to organic production, a year-to-year lease is not advisable.

It sounds like an easy case to make for a farmer, but sustainable lease agreements require sustainable landlords. Private landowners may not always appreciate the additional effort and expense incurred by farmers like South Fork. Land trusts, however, have the nonprofit motive to promote conservation and soil-enhancing agriculture, and are ideally placed to execute terms that recognize the capital contribution some farmers make to their soil.