Why Low Cost Organic Produce is Bad for Small Farmers

Honey May Nectarines

Honey May Nectarines

For years organic farmers ran small-scale operations because of the intense amount of attention and time involved in growing organic produce. Recently, say in the past 10 years, there have been great strides in research on pest control and more efficient organic farming practices (See post Organic is More than What You Eat). This has made it possible for the big guys to get into the market. This has also resulted in lowering the prices of organic produce due to supply and demand.

This creates a conundrum for supporters of small family farms. How so? The big guys can sell their produce for less since they have such large quantities. They can glut the market and bring down prices for all organic farmers. They are less vulnerable to such market changes since they usually grow large acreage of conventional produce as well. The small- to mid-sized family organic farmers cannot weather the price wars so easily.

The larger corporate farms can purchase materials in bulk for less. Small farmers have to pay full price. Add to that the price of labor. Last year there was a labor shortage in our area. The large packinghouses increased their wages to attract workers. For the first time in our 38 years of farming, we could not get enough help. So, we had to raise our wages so as not to lose the employees we had.  This was great for the farm laborers, but tough for the smaller farmers.

Food safety is another conundrum. Who can argue with the need for a safe food supply? The large guys have lawyers and can hire special personnel just to handle the paperwork and training necessary to comply with the new federal food safety regulations (FSMA). Us little guys have to do all the paperwork ourselves which takes us away from the fields which means we can’t keep as close a watch on our crops which means the quality may suffer.  Thankfully there are two of us to shoulder the work load.  Some small farmers are single, though, and this new legislation has caused many to quit farming altogether.

Consumers and growers of organic produce often also support food justice issues. Low cost organic food is essential to helping underprivileged communities gain access to nutritious and safe food. On the other hand, small- to mid-sized family farms, like any business, cannot continue unless the sales price exceeds the cost of putting it in the box. That is why a recent survey found that the majority of small farmers do not have farming as their only source of income. Many work an off farm job just to keep farming.

Here is a list of costs and expenses for us to grow, pick and pack our fruit. Think about what your family spends on some of these items and multiply that by 100 (approximately how many acres of trees we have).

Water is used nearly year-round to irrigate the trees and we are charged both by use and number of acres.
Electricity is used to run the pumps to get the water to irrigate the trees.
Fuel is used for tractors, trucks and forklifts as well as weed eaters.
Labor: We pay 20 workers $9.00 per hour for 10 hours per day 7 days a week during harvest plus overtime.
Farming materials: Compost, other organic soil and tree supplements, organic pest control materials
Farm upkeep: Planting new trees, leveling the fields, spreading compost, removal and grinding of old trees
Maintenance: Oil changes, parts for fixing equipment, labor for fixing equipment, cleaning equipment
Packing materials: boxes, pads, fruit trays, pallets, stickers and sticker guns
Portable Restrooms and maintenance, shade tents and water jugs
Food Safety: Minimum of $200 per hour for annual inspections that take up to 8 hours to complete
Organic Certification
Insurance for workers, farm vehicles and liability
Mortgage Payment

The prices on most of these expenses has increased steadily over the years.

Approximate cost (taking the above expenses into consideration) to put fruit in the box: $16.00 per box
Income: Average of $28.00 per 2 layer lug box (average 56 pieces of fruit per box)
Approximate net income: $12.00 per box

Now consider we have the usual household expenses as well.

Farmers are experts at pinching pennies. Our pennies are getting pretty thin.

Advertisements
Categories: agblog, family farm, Food Safety, Nectarines, photos, small farm, Uncategorized | Tags: , , , , , | Leave a comment

Post navigation

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: