As you may know, food has been the main focus of my life now for some time. Improving the inefficiencies that exist has been a priority since my journey to Costa Rica one year ago. Tonight I had a moment unlike many others, a vision of what’s next and my role in it: a transitional role to a new market optimal.
First a brief overview, then the idea.
How conventional food systems work (I’ll use coffee for the example) is that farmers produce the crop, sell to a local intermediary who then arranges for it to be picked up, processed, and sold through various [anonymous] supply chains. Essentially, before the coffee is brought to a supermarket it is combined into some “least-common-denominator-quality” brown grind and then set into cans that can compete on lowest price (think big Maxwell House tin). The farmer gets almost nothing for his crop (while in exchange not much is expected of him) and is subject to the price variability of the free market, not to mention the mercy of nature on his plot. Unorganized producers selling to intermediaries is the worst, and has resulted in many small farmers going out of business to larger plantations. It’s simply too inefficient.
Fair Trade can be seen as a direct response to that. Its goals are to a) ensure a more constant price for farmers b) raise awareness through consumers about the product they buy, and c) encourage cooperative selling and investment among small farmers. On these scales it performs very well in providing a more just cup of coffee. Unfortunately it requires that farmers already be organized, which excludes most smallholders.
Organic production is another step up. It is certified for its a) gains to farm and crop biodiversity, b) soil health and sustainability, and c) minimized reliance on external inputs which are energy-intensive, unessential, and harm the environment. If a farmer is fair trade and organic, he gets a better price. In the US, an organic farmer is likely a happier one that sells locally. It’s also a beloved industry that has been growing 12-20% per year for its [perceived] benefits to food quality, freshness, health, and safety. Take a minute to look at these goals, until you see a farm system that is advantageous to the abomination of factory farming.
…if it’s feasible..
See, one big problem with organic for small farmers is the certification necessary. Certification differentiates the food in the consumers mind, effectively making it so that the market can support a better-quality (if higher-priced) food “commodity”. It’s been exploited and confused shoppers with their variety, but both of these are symptoms of a growing market and will be resolved within 5 years. At it’s heart, certification is a process. It takes 2-3 years on average for a low-input small farm to implement the techniques and remove trace chemicals from the land. During that time, farmers are stuck with the higher costs of land-maintainence but dont see the price benefits of their organic farm, and likely don’t have access to the credit. This is prohibitive for many small farmers.
Phase I of business role:
Transition, then, is so important. From contact to education to credit to investment, adoption to finding a buyer to getting the full certification, farmers are extremely vulnerable and alone. Specifically these steps are more than any single government policy can promote, and is often done on an NGO- or cooperative-investment level. If a transparent farmer-help organization facilitated in this role, it could greatly increase the number of certified organic farmers. Once complete, the same land yields up to 3 times what it formerly did, and is fundamentally more productive than corporate monoculture. In economics, the model provides optimal incentives for land productivity, and the techniques of intensive management are more productive in labor and land.
And the Endpoint: Certified, educated organic farmers.
Traditionally, farmers sign a contract with their middle-man. This then pays the price of passing through many hands before finally reaching the supermarket and consumer. =inefficient.
In a cooperative model, the buyer pays the producer organization, who then pass on to farmers an amount less than that premium based on its costs of marketing and organizational overhead, plus whatever incentives it provides for growing different types. =better, but still missing…
Increasingly, we are seeing the ability to match buyers with sellers directly. Taking out more links of the supply chain always means better prices at both sides and if done correctly can mean a more efficient supply chain. Given the great demand for organic produce and increased communications technology, this should not be too hard to do. =best trade system
BUT they need to be certified first! Enter Phase II of the transition process: A farmer would then be well versed in farm techniques, business negotiations, English, savings and investment, cooperative formation, seed breeding and record-keeping. He graduates the process with these skills, free of the organization overhead and anything is possible for him. The head farmer-turned entrepreneur has choice over his crop, contract, and size of farm. He receives a higher price by trading directly, and is able to form both regional (cooperative) and international (food coop/grocery store) ties. Also, he has the possibility of a veritable “genetic lottery.” If he knows his crop is the best, specialty coffees have been known to go for $40 a pound to specialty roasters. This would provide an attractive incentive to go through the steps, and stimulate added interest in the rural sector.
Phase II, continued: A more efficient supply chain also means added price attractiveness for US businesses. It could shave crucial cents off of the price of organic food (while meanwhile monoculture commodity prices will only rise with oil) and could be better certified and monitored to know exactly the quality of care given throughout the chain. They would then negotiate not as a chain, but one region to one region, one medium-size supermarket to one or a few producers. Consumers would LOVE that more of their dollar is going directly to the farmer, and can even see the specific farm/region where it’s coming from. A farmer could even provide an entire section of organic food, and respond to what happened to be in demand in that locale. This forms international partnerships in a new way, all aided by the advent of direct communications technology and a strong base for educated farmers.
The rest is history. Why should we expect produce to be produced any other way? To match suppliers and consumers in a region-to-region way is not local production, but provides variety as the next best thing. Certification, rural development, and farmers all catch up with the demand and a more equal and sustainable food system is constructed. *my* institution and similar developments all try to increase the number of certified organic farmers, and the pool (read: market) of potential partners. Price falls as standards emerge, and demand grows which encourages more farmers to come out to cast their lot (why wouldn’t they want to?). Our old plantation-slavery-artificial-unsafe-corporate system cracks, and real food can become the norm again.
That’s it. The idea that will make a business, make a paradigm shift for small farmers. I await your comments and clarifications.
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