Thoughts on homesteading: cui bono?

(Cui bono? is Latin for “To whose benefit?”)

Alert reader Ethan points out a brief but important weblog post about the economics of small-scale farming. This part caught my attention:

When I visited Eliot Coleman a few years ago, he was grossing $150k from 1.5 acres. He was also quick to note that after all the staff got paid and some of the costs were accounted for, all that was left over was $20k. Also keep in mind that there are some things he doesn’t have to pay for from the farm income that most of us would, such as his land, which was practically given to him by the Nearings, or his house, which is probably funded by income from other sources (e.g. royalties) and that of his wife, and all the associated utilities (probably part of the house bill). Likewise, equipment may have been purchased through other income sources, so it’s quite possible that if you looked at true costs, he might be operating at a loss.

Jerome told me roughly the same thing about Coleman’s operation, having read in an article by Coleman some years back that Coleman was grossing $100k but ending up with $25k after paying wages and other expenses. I have yet to locate that article, so I’m glad to have it confirmed here. There’s no reason to speculate that Coleman is actually operating at a loss; he is a an experience farmer and businessman, not a hobbyist, and surely understands how to calculate net income for his operation. So let’s take the $150k gross/$20k net profit numbers to be accurate.

Anyone thinking about centering their life around small-scale farming should take the time to wrestle those numbers to the ground. They represent the fruit of a thirty-five year effort on the part of one of the two best-known small-scale farmers in the country, and as such I think they should be taken as an upper bound on the economic potential in such an approach. To do better, one would need to take a different approach, one that Coleman either never thought of or one he considered and ruled out. But if one is thinking about following Coleman’s approach—which is the purest example I’ve seen of a small, diverse, non-industrial, self-sufficient farm which grows produce for market—one needs to be happy not only with those numbers, but with the fact that they are higher than the return an average farmer should expect.

Viewed as a business proposition, it’s not a very attractive one, but viewed as a family economy it is quite attractive. I recall reading but not exactly understanding a point Gene Logsdon raised in one of his articles on Amish economics, namely that a non-Amish farmer counts labor costs as an expense but an Amish farmer counts them as income. The reason is that an Amish farmer pays those wages to a family member, thereby keeping the money within the family economy; if, say, one of the family does $30,000 worth of work, he has actually enriched the family operation by that much.

I don’t know how Eliot Coleman staffs his operation, but I can well imagine a large family intensively working 1.5 acres of land if a few of the children were older, especially if one or two were young marrieds starting their own families. And I would think that for an extended family that was living simply and supplying most of its needs directly from the farm (food, clothing, entertainment), their collective expenses would be low enough that grossing $150,000 per year would make them relatively wealthy.

The important question is this: is the purpose of the homestead to provide comfortable incomes, even for multiple generations, or is it to create a context in which successive generations can live and thrive, i.e. reclaim an agrarian life? If generating incomes is the purpose, then I think that the small-scale farming that Eliot Coleman exemplifies is insufficient to the task; you’ll need to at least pursue along the lines that Joel Salatin has created, or perhaps beyond even that. But for the agrarian, I think that Coleman’s numbers are good news indeed.

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5 thoughts on “Thoughts on homesteading: cui bono?

  1. Is the 1.5 acres (in two places) just a mistype? Other than owning an Elliot Coleman book (that my wife read) that I bought from you, I don’t know much about him. But I’d have guessed it would be 15 acres or so. Anyway, it doesn’t matter, I’m just curious. Thanks for the post!

  2. OK, so a wiser man would have actually googled it before he made a comment. Lesson learned. It looks like 1.5. Forget I ever said anything :)

  3. Good points, Mr. Saenz. I also wonder though, if a family had the land debt-free, would they really need to gross so much? In Amish financial terms, that’s alot (and nothing wrong with alot!).

    It seems like with 1.5 acres, you are really limited – about all of your land has to go to cash crops, essentially keeping you in the same cycle of exchanging fungible assets until you make enough to cover the bills. A bit bigger place, would seem more balanced. Then you could meet your own needs with excess for both charity and sales, but not need so much gross sales because your needs for money are reduced.

  4. Floyd,

    I think it would be possible for a family to supply itself with vegetables by skimming the yield of a 1.5 acre operation. In Coleman’s book, he says that you can make a living using his approach if you can get forty families buying all their vegetables from you; seems easy enough to have the grower’s family be the forty-first.

    Keep in mind that 1.5 acres is the amount of land devoted to Coleman’s vegetable farm; his property is probably larger than that. He’d need more land to keep animals, but I don’t know if he does that, since he doesn’t sell meat or dairy, and I think he is a vegetarian.

  5. In Dec. of ’07, I was able to hear Mr. Coleman speak, locally. He is a facinating man. Some facts I learned that evening: He has 60 acres, which he purchased from Scott and Helen Nearing back in 1965, whom were his neighbors (they have since passed away). The land Mr. Coleman purchased was far from ‘farming’ ground. It was not flat with rich soils…but hilly and rocky w/alot of trees. He did alot of physical labor to make the ground he grows on today… useable. In the past he did have livestock, but got out for a while, due to a research project. His research is done, and now he will be getting back into livestock production, and keeping the vegetables, too. He does eat meat, and to share the work load at the farm, they have a few interns. If anyone has opportunity to hear Mr. Coleman speak, I highly recommend it. Kris in WA

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