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Consumer Driven Agriculture

On a recent Friday night, I found myself barreling down Earlysville Road to grab a few pizzas for my family. They had all spent the past week getting the farm ready for our inaugural open house. This night, everyone was tired, hungry, and far too exhausted to cook, so off I went into the night for something quick and cheap.

I wasn’t paying much attention to the NPR interview playing on the radio; I was much more interested in the deer lining the sides of the road, waiting to leap out in front of the truck and prolong my errand. But at the point where the road turns from a serpentine tunnel cut through oak and poplar forest to a series of roundabouts near the airport, I heard something that snatched my attention decidedly away from the ubiquitous Whitetails:

40 percent of food in the United States is wasted.

The rest of the interview went on to explain the many reasons why this is the case: from consumers throwing out food that passes the sell-by date, to distributors being encouraged to cram more product into packages than people will actually be able to eat before it spoils, to supermarkets keeping their produce shelves fully stocked right up until closing time – then throwing out most of what doesn’t sell. I bought my pizzas and drove back into the darkness of Earlysville, paying much more attention to the radio than I probably should have at the height of deer season.

Think about that earlier quote for a moment: 40% of the food in the U.S. is simply thrown out. This is an interesting statistic to reconcile with the steady refrain from conventional agriculture: “We need heavy metal, GMO, and factory production if we’re going to feed the world.”  It hardly stands to reason that we need higher agricultural yields if Americans are only eating 60% of the food grown for us.

Over the next couple of days, however, I came to realize that the problem of waste is not limited to conventional agriculture and supermarkets. The interview I listened to included a couple of small organic outfits finding themselves, at the end of each growing season, scrambling to figure out what to do with vast amounts of unsold produce. The perishable nature of fruits and veggies makes them difficult to funnel to places like food banks that serve the food-insecure, and it’s economically dangerous for a small producer to give away or even fire-sale their late season inventory. As a result, a lot of the excess produce simply winds up in compost. And while this is certainly better than the food winding up in a landfill, growing annual plants for fertilizer represents a glaring systemic inefficiency in ecological farming rooted in our culture of “more is better.”

The focus of agriculture, even sustainable agriculture, is on increasing yields. Conventional agriculture wants to push yields to record-breaking highs while sustainable agriculture, for all its talk of bucking the system, obsessively sets its sights on achieving yield parity with its industrial counterpart. I have yet to see an article in Acres USA – the flagship publication of sustainable farming – that features innovations in the control of production; every article focuses instead on maximizing production in spite of overwhelming evidence that we’re producing more than enough food.

Perhaps there is a belief that overproduction is benign. After all, to say that it’s better to overproduce than underproduce seems like a logical argument. And that would be the case if we weren’t overproducing by such an extreme margin. It’s one thing to waste 5%, but 40% is another matter entirely. Our desire to maximize production is rife with consequences: food is the primary component of landfills. It’s the raison d’etre of both factory farming (which destroys the environment) and GMO (which destroys seedstock diversity and natural protections against mass starvation). It causes farming to be seen as an enterprise requiring large amounts of land and the equipment to manage it – and the money to procure both – thereby discouraging new and innovative farmers from entering the field.

Finally, the massive overproduction of food ultimately threatens the sustainability movement itself. The ecologically-detached science that fuels conventional agriculture produces yields that, ultimately, ecological methods simply can’t match. Add to that the fact that only 60% of our existing yields are necessary anyway, and we soon find sustainable agriculture being outclassed by an opponent in a game that no one is watching.

Focusing on Production Control

Back in July, I found myself mesmerized by Joel Salatin’s talk about buyers clubs. His idea of shunning farmers markets and CSAs was, to me, both revolutionary and liberating; before that talk, setting up a farmers market stand and offering CSA shares seemed as de rigueur for small farmers as sporting a woolly beard and straw hat. I’ll admit to chafing at the idea of “joining the club” of pastoral agrarians funneling natural foods to upper income folks in exclusive rustic-chic downtown markets. Among Sylvanaqua’s three core values is this: “Inclusion: Absolutely everyone deserves to be healthy and happy.”

I came to Earlysville to help democratize the natural food movement, so to see that alternative marketing methods were viable was very encouraging. Buyers clubs looked like a magic bullet that lowers consumer costs while keeping a greater share of the food dollar in the farmer’s pocket through control of all three of the food business’ major facets: production, marketing, and distribution. In simpler terms, it seemed key to making a decent living as a farmer. At the time, however, I didn’t realize that saying “no” to the traditional market concept would provide a vital precedent to fixing the biggest problem with the sustainability movement: production control.

One of the great things about buyers clubs, especially for the production of meat, is their effectiveness in establishing production targets. Once you’ve established a good corps of clubs, you can reasonably estimate how much you’ll need to produce. A little overproduction is necessary to ensure that orders can be filled, but if you can keep it to 10% or less, that amount is easily absorbed by on-farm sales, impulse purchases from club members, and personal consumption.

This model is a little tricky for fruit and veggie production because unit control isn’t so easy. In full disclosure, our farm isn’t heavy in the produce business because our mantra is that end consumers should grow as much of their own veggies as possible. However, we can’t ignore the realities of the modern world. Namely, many people simply don’t have the time to tend a garden, and lots of people aren’t blessed with a green thumb. We’re left, then, with a challenge: how do we get people the produce they need, in the amounts they need, without wasting it, and in a way that’s economical for both farmer and consumer?

Sylvanaqua Farms is piloting a concept we call MyFarm, which boils down to a commercialized community garden. Customers “buy” a set of garden beds by putting down a deposit and selecting from a list of plant sets they want grown. We grow the selections and allow the customer to come in whenever they want and harvest from their own set of beds. What they pick is debited from the deposit until the deposit is exhausted, at which point customers pay as they pick.

With this system, we don’t have to worry about transport spoilage or the risk of throwing out large quantities of unsold produce. The customer has all the abundance and selection of the supermarket, plus the freshness and local ethos of the farmers market. Finally, we can offer extremely competitive prices since we don’t have to factor in costs of picking, washing, storing, transporting, covering spoilage loss, and selling. The only downside is the relatively small number of families we can support, though this number increases when homes grow more of their own produce and require fewer of our beds.

Consumer Driven Agriculture

Agricultural waste ultimately stems from production being driven by suppliers. In conventional and large-scale organic agriculture, farmers produce for commodity markets that erect a firewall between them and the end consumer. The farmers produce high to gross high, with the demand level of end consumers only vaguely reflected in commodity prices before being rendered irrelevant by Federal commodity subsidies. Farmers in smaller scale agriculture are more in touch with end consumer markets and are more efficient, but the primary distribution vehicles – smaller scale wholesaling and farmers markets – still foster an inelastic production chain because it is the producer, rather than the consumer, that initiates production. In both systems, there is no verification that the products being developed are mapped to an actual consumer need.

The term “Consumer Driven Agriculture” (CDA) popped into my head owing to my days as a software engineer, in which we often practiced a concept called Test Driven Development (TDD). In TDD, the programmer writes a test to verify code before the functional code is actually written. If I were writing an “add” function for a calculator program, the first thing I’d write would be a test that plugged 1 and 1 into the add function and checked for a result of 2. The test would initially fail since I haven’t written any code yet. Then I’d write the code to pass the test (or tests), then write another test, code to pass it, and so on until the program is complete.

Applying the concept to agricultural production means verifying that your production units have a buyer (or a very reasonable chance of a buyer) before you actually produce them. This is why buyers clubs and MyFarm are such powerful tools for production control compared to open markets: demand in open markets is nearly impossible to predict.

Buyers club members will usually settle into a pattern of purchases –  3 broilers, 5 dozen eggs, 4 pounds of bacon per month, as an example. From these data we can closely estimate a customer’s seasonal purchases, and since they have such a close relationship with our farm, we can contact them ahead of time to see if they anticipate changes in their purchasing. Perform the same steps for all buyers club members, and now we have our “test” which we will try to pass by matching livestock production to those numbers. In the realm of produce, the MyFarm system puts crops in the ground only when a customer pays us to do so. In both cases, the key to reducing waste and improving efficiency is to insist on a direct consumer demand to initiate production. Hence, Consumer Driven Agriculture.

(Note: If you Google “Consumer Driven Agriculture,” you will find that the term is already being used to describe broad, macro-agricultural shifts in food production being driven by rising, aging, and ethnically diversifying populations. CDA at Sylvanaqua refers, instead, to the specific technique of using concrete customer demand to drive what and how much to produce on an individual farm.)

Challenges for CDA

CDA is hampered by several factors. Chief among them is the fact that the method relies heavily on two things most farmers don’t enjoy: analyzing metrics and high-touch relationship marketing. This isn’t something that would just turn off lifelong farmers either; the growing number of young people trading in their cubicles for pastures may balk at the tedium of data analytics and eliciting/managing the expectations of customers… tasks many were specifically hoping to avoid by starting a farm. The fact is that most farmers just want to grow food and brag about how much they grew.

There is also the fact that creating the data to support effective CDA would take at least two or three seasons to compile into an accurate predictor of production demands. Not only must the producer account for her existing clients, but she must also factor in a growth rate that can only be accurately measured from multiple seasons of data. This may not be much of an issue for seasoned farmers already accustomed to the notion of a program taking several years to bear fruit, often literally.

A market opportunity certainly exists in CDA analytics since practitioners could (in theory) offer farmers increased margins and reduced costs. For the farmer, however, there is a risk in sacrificing that part of the marketing/distribution food dollar. Whether or not this system could be made cost effective outside the farmer’s locus of control would need to be verified.

Challenges aside, CDA promises to improve efficiency in agricultural production by more strongly linking it to consumer demand. Successful implementation would result in manifold benefits very much in line with the true goals of sustainable agriculture:

  • Increase in margins for farmers and reduced costs for consumers
  • Reduction in the size of individual farms, leading to increases conservation areas and reductions in both cropland/pasture conversion and barriers to entry for new farmers
  • Reduction of the environmental impact of food waste
  • A market- and data-driven solution to the destructive “more is better” ethos of industrial agriculture, and a reorientation of the sustainability movement away from industrial goals

Applied correctly, CDA could do for agriculture what Just In Time production did for automobile manufacturing.

Chris Newman
Proprietor, Sylvanaqua Farms

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