This excerpt is adapted from Mike Madison’s book Fruitful Labor: The Ecology, Economy, and Practice of a Family Farm (Chelsea Green, 2018) and is printed with permission from the publisher. Be sure to read Civil Eats’ companion interview with Madison, also published today.
There is a widespread tendency in our culture to view all human activity in financial terms—dollars acquired and dollars disbursed. At no other period in history have human values been so thoroughly monetized.
I reject that view. For me, farming is not primarily about money. It has more to do with an interesting and enjoyable way of living, and with having a useful role in my community (a community that includes not only humans, but also the other organisms with whom we share the region).
Nonetheless, I am forced to deal with the economics of farming as part of the reality of 21st-century life. The farm is our sole source of household income, and there have been years when an insufficiency of income has been inconvenient and stressful.
A good way to get a snapshot of the economic status of the farm is to look at the income statement that is submitted each year to the Internal Revenue Service. This is reported on Form 1040, Schedule F: Profit or Loss from Farming. An example is given in the accompanying figure, and it is worth going over it line by line, as this will illuminate many of the economic aspects of farming.
Line 2: This is the gross income from sales, both retail and wholesale, of products produced on the farm.
Line 4a: According to the USDA census of agriculture, farms with gross incomes similar to mine receive, on average, $6,500 each year in direct subsidies from the federal government. The subsidies are not distributed equally. They are as much political as economic, and they are heavily slanted toward commodity crops. Specialty crops such as those that I grow are not subsidized.
I am eligible for a partial refund of the $725 fee that I pay for organic certification through a USDA organic program grant. In the past I sometimes took advantage of this, but I no longer do so. The organic certification industry is a racket—another bureaucracy carried on the backs of farmers, and so some relief from those expenses seems fair. But this strikes me as an inappropriate use of funds from the public treasury, and I’m reluctant to take part in it.
I know farmers who make a deep study of federal and state programs, and grab every dollar that might be available to them. My practice is the other way; I have not taken advantage of subsidies for solar power installation, conservation practices, development of value-added projects, efficient irrigation, and others of my farm activities that would be eligible for tax credits or grants.
Similarly, there have been years of low income when we were eligible for food stamps and other sorts of public support, but we have never enrolled in those programs. My convictions on this topic are still somewhat fluid, but it seems to me that one should do whatever it is that is the right thing to do, and to accept public monies for it is irrelevant and dishonorable. (I also must confess to a certain element of laziness about completing all the paperwork that claiming public funds requires.)
Line 6: I do not use crop insurance—I just take my losses as losses.
Line 7: This income represents custom milling of 5 tons of olives for friends at $400 per ton.
Line 10: We are only 8 miles from our farmers’ market and from a supermarket where we sell our products, so our annual mileage for farm business is small. We know other farmers who log 500 miles a week or more trucking their produce to markets in the San Francisco Bay area. The dollar cost of trucking (as well as its time cost and ecological cost) is quite high in those circumstances.
Line 11: Chemicals. On conventional farms, this is a significant item of expense.
Line 13: This charge is for a contractor who brought in a chipping machine to chip all the prunings from the orchards.
Line 14: Depreciation. This includes machinery, tools, and buildings. It is somewhat fictional in the sense that a well-built and well-maintained building is actually increasing in value, not decreasing.
Line 16: Because we do not sell the eggs, but give them away, we cannot deduct the cost of feed for the chickens. Nor can we deduct the cost of feed for cats, even when they are kept primarily for rodent control.
Line 17: Compost and gypsum.
Line 18: This covers a repair part for the olive mill sent from Italy.
Line 19: Fuel for tractors and tools. Fuel for vehicles is covered in line 10.
Line 21: I have no debts, so I pay no interest. I understand that credit is a tool, but it is one that we do not use.
Line 24: Rental of a trailer and of a trenching machine.
Line 25: This includes expensive remedial work on a water well. Every year it seems that some major repair will be required. I don’t know in advance what it will be, but I know that something will break in a way that is costly to repair.
Line 26: We plant a lot of bulbs every year (tulips, iris, ranunculus, lilies, etc.), and also continue to add trees—primarily citrus and olives. Some seeds, such as hybrid flower seeds, may be very expensive.
Line 28: The majority of this is packaging: bottles, caps, capsules, jars, lids, labels, bags, and boxes. We have not found suitable domestic glass, and so the bottles for olive oil are imported from Italy. Customers return about 40 percent of the glass, which we are able to clean, sterilize, and re-use. Also included in this line are a hundred dozen other little things—work gloves, paper towels, mouse traps, saw chains, sugar for jam, etc.—that add up in the course of a year.
Line 29: This includes that portion of the property tax attributable to the farming business, as well as sales tax collected on taxable items (flowers) sold in the farmers market. When we sell a bunch of flowers for five dollars, the true price is $4.63 plus 37 cents tax. That tax must be remitted to the state.
Line 30: Electricity for pumping water, running the cooler, running the olive mill, and charging the electric truck. Lighting is all LED lights, and does not use much power.
Line 32a: The farmers market fees are based on a percentage of gross sales. They pay for management, trash pickup, insurance, utilities, and the like. The market is very well run, but expensively so.
Line 34: The net income (incorrectly called “profit” on the form) is only about one-quarter of the gross revenue. This is typical of farming operations whether they are large or small.
Late one evening there was a knocking on our door, and I answered to find a man from China who had heard of our operation and wanted to talk to me. I invited him in and we talked for a couple of hours, and at the end of our conversation he offered me a job. The proposition was to plant 5,000 acres of olive trees in far western China where he had an option on suitable land, to set up an olive oil mill, and establish an olive oil company.
“Name your salary,” he said. “There’s plenty of money in this project—any amount is okay.” When I declined his offer, he said, “I don’t understand Americans. No one seems to have an ambition to be rich. In China, everyone wants to be rich. It’s all we think about. It’s all we talk about.”
I explained my views on this, and I drew a graph on the back of an envelope. One axis was money, and the other was happiness, and I pointed out to him that the graph has an inflection point beyond which further money in any amount does not increase happiness. He studied my drawing, but seemed unconvinced.
Dianne and I have never been motivated to be rich in terms of money. We live in a beautiful place, we have many friends, we’re healthy, we have meaningful work, and we have wholesome food to eat and good local wine to drink—what would we want with more money? Our aim has always been to stay within what Ivan Illich called “the narrow range that separates enough from too much.”
Our current income keeps us in that range. It seems adequate, and we’re not motivated to increase it.