Profitablility of Small to Mid-Size Farms by Domonique Juleon

Profitability of Small to Mid-Size Farms in Washington State

System Analysis domonique juleon | dorothy mitchell | colby ochsner | sash sunday | anna richter

Project Context This report, created by 5 MBA graduate students, was submitted as a final paper Fall Quarter 2012 at the Bainbridge Graduate Institute. While twelve weeks of research lead to many questions beyond the scope of this paper, we believe that the information compiled here might have value or be of interest to others working in the Food Systems field. We invite feedback and questions at bgi.farms@gmail.com

Acknowledgements Thank you to everyone that contributed their knowledge, stories and support to this paper. Fred Berman, Education and Outreach Specialist, Washington State Dept. of Agriculture Emma Brewster, Marketing Coordinator, The Northwest Agriculture Business Center Tim Crosby, Director, Slow Money Northwest Joseph Gabiou, Founder/Farmer at Wobbly Cart Farming Collective in Rochester, WA John Gardner, Dean, BGI Dan Hulse, Owner/Farmer at Tahoma Farm, Orting, WA and Owner of Terra Organics in Tacoma, WA Bert Loosmore, Faculty, BGI Erin Majors, Olympia Food Co-op and member of its Local Farm and Food Committee Megan Marini, Owner/Farmer at Calliope Farm in Olympia, WA Lucas Patzek, Director of the Thurston County Extension Agency of Washington State UniversityBeth Robinette, Owner/Farmer at Lazy R Ranch in Cheney, WA Trav Williams, Photographer , Broken Banjo Photography Ethan Schaffer, Director of Business and Organizational Development, Viva Farms Becky Warner, Farmer and Business Owner, City Grown

cover photo credits include: Trav Williams Sash Sunday

Profitability of Small to Mid-Size Farms in Washington State

System Analysis

Contents Setting the Stage ......................................................5 The Trend ..................................................................9 System Boundaries ..................................................11 The System Diagram Map and Variables ..................13 The System Diagram ...............................................17 Identifying Leverage Points ......................................27 Stakeholder Analysis Matrix ....................................33 Business Players: Opportunities and Threats ...........35 Conclusions .............................................................39 References ..............................................................40

domonique juleon | dorothy mitchell | colby ochsner | sash sunday | anna richter

the stage

Setting the Stage On the surface, the state of Washington looks like a thriving agricultural region. Rich soils and diverse climates allow Washington producers to grow over 300 crops yearly, while deep water ports provide access to export opportunities. The state’s $40 billion food and agriculture industry employs approximately 160,000 people and contributes 12% percent to the state’s economy (WSDA, 2012). Despite these state-level economic successes, however, not every producer in Washington is flourishing. In fact, many of the state’s small and mid-sized farmers lose money every year (USDA WA Summary by Market Value, 2007). While most are not direct participants in the state’s thriving export economy, they are still affected by an intricate structure that extends from their local community to the regional, national, and even international level. To understand the challenges faced by Washington’s smaller producers, first we must examine this larger system. Food plays an essential role not only in human survival but also in the United States economy: US consumers spend over $1 trillion annually on food, or close to 10% of our country’s GDP (USDA, 2012). In Washington State, and in most parts of the country, the majority of food bought and sold originates outside of the consumer’s community. Our increasingly global and industrial food system relies on vast, consolidated production mechanisms and far-reaching distribution channels to sell food products around the country and the world at relatively inexpensive prices. Unfortunately, wide distribution and low prices have a hidden cost. Negative externalities of the industrial food system abound, such as pollution of the land, water and air from man-made chemicals, fossil fuel emissions, and animal waste (Foley, Goodman, & McElroy, 2012). This food system relies heavily on technology rather than ecological processes, and its so-called efficiencies often harm human workers and animals. Its concentrated production techniques can lead to food contamination and foodborne illness on a massive scale (O’Hara, 2011, p.15). The health of human consumers also suffers, because the foods that hold up best through the many checkpoints between farm and table in a global market are those that are highly processed. These highly processed foods are usually high in fat and low in fiber and micronutrients, due to their high proportions of oils, solid fats, starches, salt, and sugar (Nestle, 2010). Furthermore, revenue in this food system is concentrated in the hands of the largest farms and agribusinesses, which means that profit flows only to a small number of players in a limited number of communities. Twenty seven percent (27%) of agricultural revenues in 2007 were earned by less than a quarter of 1 percent of US farms. The country’s small and mid-sized farms, which make up 90% of US farms, earned only 15% of total sales revenues that year (USDA Economic Class of Farms, 2007). Beyond the troubling conditions outlined above, there are the consequences of this type of food production for humans as a co-existing species. As Frances Moore Lappé has eloquently expressed: “Corporatism distances us from one another, from the earth—and even from our own bodies, tricking them to crave that which destroys them” (2011). In other words, this industrialized system allows us to forget where our food comes and who produced it, making it easy for us to ignore the environmental and social consequences of our purchases and focus instead on convenience and price. When food is the vehicle for corporate profit, products are specifically engineered to fulfill our cravings, encouraging us to purchase and consume those items that are also harmful to our health.

photo credit: broken banjo photography

“Despite these state-level economic successes, not every producer in Washington is flourishing. “

photo credit: domonique juleon

the stage section title

“Corporatism distances us from one another, from the earth—and even from our own bodies, tricking them to crave that which destroys them.” - Francis Moore Lappé

Meanwhile, another type of food system operates simultaneously. In this model, smaller farmers and food businesses supply food primarily to consumers in their own communities, meeting unique local needs rather than competing on the national and international market. One hundred years ago, when many more Americans lived on a working farm, it would have been odd to think of this system as outside of the norm (Pollan, 2008). Since World War II, concentrated, industrial agriculture has increasingly dominated the market, and today, only about 2% of Americans live on a farm (EPA, 2012). In recent years, however, consumers have shown interest in reconnecting with their food, and more people are even trying their hand at smallscale farming. Research suggests that smaller-scale farming not only produces fewer negative externalities than the industrialized large-scale food system, it can also potentially benefit the environment, the community, and the local economy. For example, smaller farms are more likely to use environmentally sustainable methods, especially if the farmers are attempting to distinguish themselves in a direct-sales environment (O’Hara, 2011, p. 26). With a shorter distance and fewer intermediaries between producer and consumer, there is also a decreased likelihood that locallysold products will become part of the 40% of food that goes to waste in the US each year. Less quantifiable, but equally valuable, is the “social capital” generated from local food systems (O’Hara, 2011, p. 26). When food consumers and producers are more closely linked, the community benefits from more personal connections, goodwill, and sharing of information.

Another benefit to producing and selling food locally is that it can generate and multiply economic value throughout communities. Studies suggest that when communities increase their consumption of locally produced food, benefits flow not only to the local food sector but also multiply in the community, via the businesses serving the food sector and the dollars spent locally by those business and the food producers themselves (Martinez et al., 2010). With our nation struggling to shake off a recession, almost every community needs increased local economic activity and investment. Washington State is no exception. According to Tim Crosby of Slow Money Northwest, keeping more food sales local could provide a much-needed economic boost in the state. Crosby has noted that there is a $7 billion gap between what Washington farmers are capable of growing locally and what the state currently imports instead. Chipping away at this gap by producing and consuming more locally-produced food could generate millions of dollars in revenue and create thousands of jobs (The Mountain News, 2011). The foundation of this regional food system is, of course, the food producer. The farmers and producers themselves must be making a viable living if Washington communities are to enjoy the full economic, environmental, and cultural benefits of local agriculture. Unfortunately, many of the state’s producers operating at a local or regional scale are not currently achieving a sufficient level of profit to sustain themselves and their businesses, let alone make the capital investments that could grow their operations

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the stage

In 2007, the average net income at this scale of farming was only $7,000, whereas the Washington State wage that year was almost $48,000.

and increase their revenue. Our analysis focuses on small and mid-sized farms in Washington, as defined by the USDA as those with annual sales revenue of between $1,000 and $250,000. When we examine the net income of these farmers, defined by the USDA Agricultural Census as revenues less expenses, the average net income for farmers in this bracket between 1987 and 2007 was substantially lower than the average wage in Washington State (USDA WA Summary by Market Value, 2007). In 2007, the average net income at this scale of farming was only $7,000, whereas the Washington State wage that year was almost $48,000. Many farmers at this scale must turn to off-farm labor to sustain themselves, which restricts the time they have to invest in their farming business and limits their ability to become profitable. In fact, fewer than 50% of the Washington farmers in the class described reported farming as their principal occupation (USDA WA Summary by Market Value, 2007). Not surprisingly, turnover among this class of producers is high. With the average farmer age in Washington at 57, many worry about developing the next generation of farmers, and then keeping them in the business (The Mountain News, 2011).

Some smaller-scale producers continue farming, despite unprofitability, because they feel it is their right livelihood, defined as “the principle that each person should follow an honest occupation which fully respects other people and the natural world. It means being responsible for the consequences of our actions and taking only a fair share of the earth’s resources” (What is ‘Right Livelihood’?, 2012). In order for this “honest occupation” to remain viable, however, the producers must realize an income that supports their business, themselves, and their families. Living one’s right livelihood becomes increasingly difficult for those small producers who must work an additional off-farm job, because they have less time and energy for the occupation about which they are most passionate. Were they to obtain greater financial success from farming, not only would they achieve greater personal and professional fulfillment, but the whole community would also benefit from a stronger local agricultural economy. How can the scales be tipped so that both farmers and communities can take photo credit: broken banjo photography advantage of the high potential of local and regional-scale agriculture? The following systems analysis will explore some of the factors affecting profitability for Washington’s small and mid-sized farms, especially factors related to production, sales, and consumption. We aim to uncover why it is increasingly difficult to make a living at this vital scale of farming, and examine some potential ways to affect the system and improve profitability for food producers.

the trend

The Trend

The Behavior over Time graph above shows that not only has the average net cash farm income of small and mid-sized Washington producers decreased in recent decades, it is also significantly lower than the average wage in Washington state. The orange curve displays net income, or what the USDA in its Census Agriculture terms “net cash farm income of the operations.” This statistic is “derived by subtracting total farm expenses from total sales, government payments, and other farm-related income “ (USDA General explanation and census of agriculture report form, 2007). For simplicity’s sake, we refer to this metric throughout as “net income.” The net income curve is troubling not only for its decreasing slope but also for the fact that it remains below the average Washington wage. In 2007, it even dips below the federal poverty level, which in that year was $10,210 for a household of one (2007 HHS Poverty Guidelines, 2010). All of this suggests that smaller-scale Washington producers are, in general, not achieving a high degree of financial success. The net cash farm income metric, however, is not without its flaws. The data is only as good as the process through which it was collected. Each year, some farmers are likely to not be counted, while others who probably do not consider themselves farmers are sent surveys. The plunge in net income between 2002 and 2007 might be partially attributable to increased USDA efforts to count small and beginning farmers. Those farmers are less likely to be profitable, thus bringing the whole curve down. In addition, the producers filling out the Census survey probably vary in what they list as farm expenses and revenues, based on the scale and business type of their operations. Therefore, “net cash farm income” might not mean exactly the

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the trend

same thing from farm to farm. Finally, changes over time in Ag Census questions also mean that we cannot directly compare data from before the 1987 Census. The data is also not, to our knowledge, adjusted for inflation. The chart below provides additional insight into the trend seen above. It shows the average net income of the farmers in our specified bracket, broken out by sales revenue class and number of farmers in each class. We can see from this data that on average, until farmers reach at least $25,000 in annual sales, they are likely to lose money in their operations. Furthermore, the four sales revenue brackets with the greatest number of producers all have negative average net incomes. Even in the top bracket for net income, the $100,000-$250,000 range, the producersâ&#x20AC;&#x2122; average net income is below the average Washington wage. That bracket also contains the smallest number of farmers, at 1,579. What then, might we conclude? Overall, small and medium-sized producers in Washington are earning significantly less than the

average Washington worker, and that gap has increased over time. If the existing producers in this specific revenue class cannot increase their profitability, and if new farmers continue to enter and exit the profession, the downward slope will likely continue or flatten out at a low level. Equally important is the gap between the brown and orange curves, which suggests that the profession of farming on a small and mid-sized scale is less profitable, often unsustainably so, than most other work in Washington State. Even those farmers who feel that agriculture it is their calling might be forced to concede that the opportunity costs of staying in that industry are too high. With 90% of Washingtonâ&#x20AC;&#x2122;s farmers classified as small to mid-sized farms (earning less than $250,000 in annual revenue), this trend could have serious negative consequences for the stateâ&#x20AC;&#x2122;s smaller-scale agricultural system (Washington State Department of Labor and Industry, 2011).

the boundaries

System Boundaries The food system is a complex network that is influenced by innumerable variables, many of which play out on an international scale. For the purpose of this analysis, the regional boundary of the State of Washington was chosen to focus the investigation. We recognize that food is imported from beyond this regional boundary, and in our analysis we consider the effect of non-local food on local food producers. In addition, we reference food policy and regulation that affects this region but is created at the national level. We consider trends beginning in the early 1990s, but focus our causal loop diagram and other parts of the analysis on a farmer operating today, with the causal loop specifically referencing annual farming cycles (delays noted in the diagram refer to events that play out beyond one year). Data was available to us on both a national and a statewide level, but we concluded that to analyze our chosen scale of farming at a national level would involve too many generalizations about the system. Even working on a statewide analysis involves much simplification, and we found that our analysis often took the lens of a producer in Western Washington, where row crop farming is prevalent. While we do not believe that all of the results of our analysis could be applied to other regions in the country, this analysis could serve as example of a way to examine those systems. In this report, we have included farms whose primary focus is the production of food, with revenues between $1,000 and $250,000 per year, located in Washington State. We refer to these farms as small-to-mid-sized farms, and to their operators as farmers or producers. We chose these specific revenue brackets because the USDA Economic Research Services defines a farm as any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the year (USDA ERS, 2012). Furthermore, the National Commission on Small Farms selected $250,000 in gross sales as the cutoff between small and large-scale farms (USDA, 2012). Finally, the USDA classifies small farms as those with less than $50,000 in gross annual sales and medium-sized farms as those with gross annual sales between $50,000 and $250,000 (Low and Vogel, 2011). While our background work examined a very broad picture of the factors affecting Washington farms of this size, our systems analysis primarily focuses on factors around food production, sales, and consumption. We have described above many of the potential positive externalities of local food systems, and our research has been motivated by hopes that a thriving smaller-scale agricultural system will improve the environment, human nutrition, and community culture. However, because none of these benefits can be realized without small producers making a viable livelihood and staying in the farming business, our analysis is primarily concerned with the baseline metric of farmer profitability. photo credit: broken banjo photography

the system sectionvariables title

The System Diagram Map and Variables For the following diagrams we have used the causal loop diagraming method. A causal loop diagram is a tool that aids in visualizing relationships between system variables. The relationships between these variables, represented by arrows, can be labelled same or opposite. A same (“s”) relationship means that when one variable increases the other will increase as well. An opposite (“o”) relationship means that when the variable increases the associated variable will decrease. The simple diagram below represents the major themes of the relationships we discovered during our analysis. Following this diagram we have listed the variables and their definitions. In the following chapter, we will provide a more detailed look at the causal loop and our analysis.

Farmer Education and Number of Farmers Loop

Financial Capital Loop

Survival Loop

Marketing and Business Development Loop

Policy and Politics Loop

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the system variables

Variables Defined Survival Loop

Net Income of Regional Farms - The farms’ sales revenue and money earned from government payments and other revenue sources, less their expenses in a given growing season. Amount of Resources Spent on Production - The amount of money from their net income that the farm uses to increase production in the future. Production Cost per Pound - The costs of goods sold involved in producing one pound of food. Market Price of Regional Food - The average price within Washington State communities paid for regionally produced food. Amount Demand for Regional Food – Amount of consumer demand for regionally produced food within Washington State. Amount of Regional Food Consumed - Amount of regionally produced food purchased by consumers in Washington. Amount of Regional Food Produced - Amount of food produced in Washington.

Marketing and Business Development

Amount of Resources Spent on Marketing, Administration and Business Development - Amount of net income allocated to farm marketing, administration, and business development. Amount of Consumer Education and Personal Empowerment with Respect to Health and Environment - Amount of consumer understanding that choosing regional food can have affect their health, the environment, and the economy.

Financial Capital Loop

Number of Producers Achieving their Right Livelihood - The number of producers who are earning a living by doing what they love and creating a respected place for themselves in the community. Amount of Financial Capital Available to Producers (Loan Programs) - Amount of money available as low-interest loans to small to mid-sized producers in Washington State. Amount of Resources Reinvested in Farm - Dollar amount reinvested in the farm business after the primary expenses are covered. Producer’s Desired Income Level - Amount of revenue the grower wants to take as a salary. Amount Invested in Secondary Income Opportunities - Dollar amount spent on creating alternative income streams through waste management, complementary business ventures, value added products, etc. Acreage in Production - Number of acres in active food production in Washington State by small to mid-sized farms. Amount of Money Invested in Infrastructure and Equipment - Dollar amount spent on tractors, greenhouses, irrigation equipment, buildings, and other capital investments. Amount of Sustainable Practices Used - Amount of time and resources spent on implementation of sustainable practices such as soil testing and management, energy savings or production, water catchment, efficiency upgrades, animal rotations, mulching, cover crops, etc. Quality and Quantity of Soil – Level of soil quality as measured for texture, moisture, fertility, and pH as well as biological activity at micro and macro scale. Quantity determined by the Universal Soil Loss Equation (USLE). Amount of Financial Debt – Dollar amount of loans and interest owed by farms to lenders. Amount of Off-Farm Income Necessary – Dollar amount that must be earned on top of farm income by farmers to cover their expenses, bills, and loan payments.

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the system sectionvariables title

Farmer Education and the Number of Farmers Loop

Amount of Ongoing Farmer Education Available - Number of organizations or classes whose purpose is to increase the knowledge and productivity of producers. Amount of Knowledge/Experience of Farmers - Amount of knowledge or experience possessed by the regional farming community that allows it to grow more food within the parameters defined by the region itself. Number of New Farmer Education/Internship Opportunities - Number of high school and college level agricultural programs in the region as well as the number of farms able to take on interns for the purpose of agricultural education. Number of New Farms Started - Number of new farms launched in Washington within a given growing season. Number of Regional Farms - Number of small to mid-sized farms in Washington State. Number of Joint Marketing and Distribution Opportunities - Number of opportunities for regional producers to pool resources for the purpose of expanded reach of marketing or distribution as well as cost saving. Amount of Money Spent on Inputs and Distribution - Amount of money spent on soil amendments, pest controls, and distribution. Perceived Viability of Farming as an Occupation - The number of people who believe that farming is a reasonable occupation and that farmers should be expected to earn a reasonable living, have health care, and provide for their retirement.

Policy and Politics Loop

Price of Non-Regional Industrially Produced Food - Amount of food produced by large, industrial scale farms outside of Washington State. Amount of Marketing for Non-Regional Industrially Produced Food – Dollar amount spent on marketing by large, industrial-scale producers. Demand for Non-Regional Industrially Produced Food - Washington State consumer demand for food grown by industrial scale farms outside of Washington State. Amount of Benefit to Industrial Scale Agriculture from Economies of Scale - Dollar amount saved by large food production operations by virtue of their economies of scale. Net Income of Non-Regional Industrial Producers - The large, industrial-scale farms’ sales revenue less expenses in a given growing season. Amount of Benefit from Government Policy to Non-Regional Industrial Producers - Dollar amount saved (or earned) by large-scale producers because of subsidies or other policies that do not benefit (or only minimally benefit) regional producers. Amount of Benefit from Government Policy to Regional Producers - Dollar amount saved (or earned) by small to mid-sized producers in Washington State because of subsidies or other policies that do not benefit large-scale producers outside of Washington State. Amount of Regional Producers’ Lobby Influence - Number of policy makers who are willing to support regional food producers. Cost of Fuel - Average cost of fuel in the United States. Assumption: the average cost of fuel in Washington is close to the national average.

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The Survival Loop

the system diagram

The System Diagram The Primary Producer Loop (a.k.a. The Survival Loop) - The Narrative The Amount of Resources Spent on Production will be determined initially by the amount of money or time a farmer is willing and able to invest in their food-producing operations. The quantity of time and energy invested in the operation influences the Amount of Regional Food Produced. For small farms, the cost per pound of food produced is quite high, leading many producers at this scale to rely on direct sales, where they have more control over the price of their goods. As price increases, however, demand generally decreases, so the challenge is to strike a balance in order to maximize revenue. Most small-scale farms begin with limited capital and the operators often rely upon outside sources of income, which reduce their ability to spend time on food production. In order to really start making a meaningful profit, one of these variables needs to be increased. Without some leverage applied somewhere in this loop, jump-starting the system is very difficult, and the producers are caught in â&#x20AC;&#x153;survival mode,â&#x20AC;? just barely maintaining their business, and unable to invest in it or expand it to increase profitability.

The Survival Loop - The Diagram

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sectiondiagram title the system

Marketing and Business Development - The Narrative Marketing can increase demand in a number of ways. It gives a farmer a foothold in a market where industrial agriculture sets the standard for price and availability. By educating the consumer about why regionally produced food is better for their health, the environment, and the economy, producers can empower people to change the way they think and the metrics they use when choosing what to eat. This can create a loyal consumer base for the producer. Business Development can take many forms. Sometimes it might mean implementing a basic bookkeeping system and planning a budget, or it could be a more complicated venture, such as creating a new value proposition within the farm business. In terms of the aggregate profitability of farming, another business within the community that serves the regional food system and makes use of something that was once wasted can increase the profitability of the whole system. This holistic approach to resource management can save money, generate revenue, and increase offerings to consumers. By creating demand in new niches, the end result is more regional food consumed and higher profits for the producers.

Marketing and Business Development - The Diagram

the system section diagram title

Policy and Politics - The Narrative As farms become more profitable, their contribution to state GDP grows, leading to more political influence both at the state and national levels. With increased influence can come increased benefits from government policy, such as the Farm Bill. Government policy affects agriculture in many ways, but the Farm Bill is considered to be the most influential piece of policy for agriculture in this country. Within the Farm Bill there are many opportunities to allocate funding for large- or small-scale producers, with the large-scale producers usually receiving the bulk of the benefits. Subsidies and crop insurance, for example, generally flow to the biggest producers. Smaller producers face a disadvantage when attempting to compete in the same market as these large businesses.

Policy and Politics- The Diagram

the system sectiondiagram title

Financial Capital - The Narrative If farms cannot make a profit, because they are stuck in the survival loop, then access to financial capital in the form of low-interest loans can help the farm break out of that cycle. One of the first things producers might do with this capital is to invest it in their operation either through increasing the quality or quantity of their labor force or by paying themselves so that they can spend more time on the farm, engaged in production and business activities. Increasing the acreage in production usually increases yields, which allows farms to spend less per pound of food produced. Our assumption is that the increase in acreage is used to grow more of what the farmers already produce, allowing them to benefit, however slightly, from a greater economy of scale. Another possible investment is in equipment such as tractors, refrigeration units, and greenhouses which can increase yields and capacity substantially. Work can be accomplished more efficiently, the food production season can be extended, and larger harvests can be stored for longer and kept fresher. These improvements can decrease the costs of production and increase the amount of revenue, leading to increased profitability for the producer. Spending time and money developing secondary business structures such as composting facilities or value added products can decrease the waste stream and positively affect profits. Examples of such activities include grain growers building their own mill, produce growers adding food processing to their operation to utilize unsellable produce, or farmers and ranchers creating a facility that could create compost for multiple farms. Some of these operations could even exist as stand-alone businesses that fill a need in an agricultural community. The implementation of sustainable upgrades and practices can be a worthwhile investment for small to mid-sized producers. Often, their initial cost proves prohibitive for farmers caught in the survival loop, but the return on investment can be swift and produce savings or increased revenue far into the future. These types of investments would include fuel and energy upgrades, implementing integrated pest management strategies, soil testing and management programs, installing irrigation ponds or higher efficiency irrigation systems. All of these could decrease costs and in many cases increase yields, positively affecting the profitability of farms.

"I had rather be on my farm than be emperor of the world." - George Washington

the system section diagram title

Financial Capital - The Diagram

sectiondiagram title the system

Number of Farmers and Farmer Education - The Narrative Once a nation of farmers, today fewer than 1% of Americans claim farming as their occupation (EPA, 2012). A thriving smallerscale agricultural system would allow farming to gain ground as a viable occupation for people whose passion is growing food. One of the present challenges is that many newer growers started farming as adults rather than learning the trade by growing up on a farm. The result: a huge knowledge gap. To succeed in the difficult task of farming, the producers need access to educational opportunities before starting out and throughout their careers. Various resources exist to supply this training, including extension offices, conferences, community organizations, and non-profits. Some aggregators or retailers even offer networking opportunities for farmers to share information and tools; all are ways to build the sectorâ&#x20AC;&#x2122;s strength and viability. Following the diagram, The Perceived Viability affects the number of new farms launched; more people will want to farm if they think they can make a living doing so. As more new farm businesses are started, the number of farms in a region increases. With a greater number of farms comes more opportunities for internships and networking, leading to a greater knowledge bank for the community of small farmers. The end result, ideally, is greater individual success at farming and more regional food produced. Collaboration provides opportunities to increase revenue for agricultural communities. As producers work together on marketing, distribution, and even tool and resource sharing, they stand to benefit as a system from those connections. Sharing costs and building demand for local food in general will positively affect farm profitability.

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section diagram title the system

Number of Farmers and Farmer Education - The Diagram

sectiondiagram title the system

Sweet Grass

by Gary Paulsen

There is all luck in it, so much luck that they don’t talk about it, the luck, don’t say a word about it, so much luck they smile and shrug and pray to themselves while they work and wait for the bad things to come. If it doesn’t rain the seeds won’t come up, if it rains too much the seeds won’t come up, if it rains but then doesn’t rain again at the right time the seeds will come up but the plants will die, if the rain comes but comes too much the plants will die, if the rain doesn’t come at first and the wind comes the topsoil will blow away enough to uncover the seeds and blow them away and they will die, if the rains come perfectly and the wind doesn’t come but the mustard weeds get a good start the plants will be choked off, if everything works exactly right and the rains come at the right time but not too often and wind doesn’t come and the weeds don’t overcome them the plants will grow and they will head and they will become ripe and grow golden and then, and then if the wind stays away and doesn’t come to rip the heads loose and the hail doesn’t come to flatten the stiff, brittle dying plants and grasshoppers don’t come to eat what has grown, then there might be a harvest.

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section diagram title the system

The Big Picture Diagram

section title

leverage points

Identifying Leverage Points A helpful tool used to identify the best places to intervene in the a system is Donella Meadowsâ&#x20AC;&#x2122; twelve leverage points. In her book Thinking in Systems: A Primer, she lists the leverage points in the order of least to most effective. See the below figure for Meadowâ&#x20AC;&#x2122;s complete list. The leverage points highlighted in this paper are associated with one or more the intervention strategies she identifies. During our research, we uncovered many potential ways to intervene in the current food system that would directly benefit the profitability of farmers. We have chosen four leverage points to discuss in more detail due to their potential high impact based on Meadowsâ&#x20AC;&#x2122; systems thinking principles, recognizing that they are far from the only ways to change the system.

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section points title leverage

Leverage Point #1: Shift the goals and metrics that drive the regional food system through empowerment of individuals. Meadows leverage point: The purpose or function of the system.

As the industrial food system has captured economies of scale and brought down food prices for US consumers, a paradigm has been created in which cost has become the preeminent qualification in consumer food choices. Implicit in the food system is the overarching goal of providing the least expensive food possible to the consumer. This model assumes that the best thing for people is to access affordable food, with considerations of nutrient density and positive and negative externalities of food production all but ignored. A significant values shift amongst US consumers would need to occur in order for this price-based model to change. Personal empowerment through the realization that we all have control over the health of our bodies and of our environment could alter the market and encourage a food system that is radically more sustainable. This type of high-level leverage point is not simple to bring about, especially if a top-down approach is attempted. More likely is a shift over a long period of time, across individuals and communities. Should this shift occur, a larger percentage of consumers would look beyond the price tag and ask themselves whether this food will nourish their bodies, support food producers, and help the land to flourish. Local food is a logical option for consumers who decide to vote with their dollar and their fork. Increased demand for regional food would drive new marketing opportunities and new revenue streams for local producers, or bring new converts to their existing value propositions, such as CSAs and farm stands. All of this could boost the producersâ&#x20AC;&#x2122; bottom line. A stronger social and financial link between consumers and producers would also create a more robust and resilient system, one that feeds the local community literally and also financially through economic multipliers. An example of this leverage point at work can be seen at the City of Seattle and their creation of the Seattle Food Action Plan, which outlines the goals/values of healthy food for all, growing local, strengthening the local economy, and preventing food waste (Lerman, 2012). This plan was launched in October of this year, so it is too soon to say whether these stated values and this method of encouraging a values shift will affect real change at the consumer level outside of City government. Given that the plan calls for increased purchasing of local foods for City government programs and events, the Food Action Plan might at least expose additional government employees and other consumers to a variety of local options, and provide an economic boost to some producers. Causal Loop Variables Influenced: amount of demand for regional food, amount of consumer education and empowerment with respect to health and the environment, amount of regional food consumed, amount of benefit from government policy to regional producers Unintended Consequences: If the amount of inexpensive food sold (food with many externalized costs) decreases as a result of a values shift, food prices in general might be higher, thus making some food inaccessible to low-income populations, and increasing wealth disparity. The need for food assistance programs might then increase. Should a large values shift occur rapidly, the current local producers might at first not be able to meet the demand. photo credit: broken banjo photography

leverage section points title

Leverage Point #2: Increase access to new markets and distribution mechanisms. Meadows Leverage Points: The rules of the system (such as incentives, punishments, constraint) & Reinforcing feedback loops

Small to mid-size producers often lack the resources to get their goods to market in a cost effective and efficient manner. Traditional large scale farming has built up elaborate systems to move large amounts of goods from farm to market. Since smaller farms cannot usually produce the volumes of product that large distributors require, they cannot take advantage of these current networks and must instead move their goods to market on their own. A scale-appropriate marketing and distribution system for these smaller producers could help them save money and find new markets, thus increasing their revenues. An increase in new markets and distribution mechanisms for new farmers decreases the amount of resources that each individual farm is required to invest in these activities. This would directly boost producers’ income. The increase income could potentially be reinvested in the farm, whether for new equipment, development of other on-farm business opportunities, or investing in more sustainable farming practices. New markets and distribution mechanisms should also lead directly to an increase in regional food demand since joint marketing and distribution ventures will likely allow farmers to provide a more reliable supply of product to their regional consumers. An example of an innovative collaboration around marketing and distribution in Washington State is the Okanogan Producers Marketing Association (OPMA). OPMA is a cooperative of six farms that share equipment, marketing, and jointly deliver their produce to customers. They state the benefits of this model on their website: “We believe that we have much more to offer our customers through these relationships than we ever did as individual farms and farmers.” Produce buyers, such as stores, restaurants, and other food businesses need reliability, but it can be difficult for some small to mid-size producers to provide that consistency in quality and quantity. Creating partnerships among farmers is a way to increase reliability and efficiencies in the distribution of goods on a local and regional level. There also exists an opportunity for large national distributors to reframe their business practices and create partnerships with regional producers. For reasons of transportation costs, consumer demand, and a variety of other factors, many larger distributors are recognizing that their future may lie in partnerships with smaller producers. While examples of these partnerships are limited, there is potential for mutual benefits for both parties. Overall, increased opportunities for producers to connect to distributors will open up opportunities for those producers to gain revenue, thus strengthening the regional food system. Causal Loop Variables Influenced: number of joint marketing opportunities, amount of resources allocated to administration/marketing, increased marketing and business development Unintended Consequences: This leverage point could play out in many different ways, and unintended consequences are always a possibility. For example, if a new distribution network took the form of a regional-scale distributor who purchased product directly from farmers, those farmers might find that they become a “price-taker” and receive less for their goods than from their previous direct sales photo credit: broken banjo photography

section points title leverage

activities. If producers band together to form a new cooperative model, they might find that instead of initially saving themselves time and energy, the startup process of this venture takes them off the farm even more than before. There is also the risk that as a mid-level distribution model gains market share and grows, the “success to the successful” paradigm could spiral to a scale where the distributor starts looking like the businesses that already exist in the global system. Finally, new and innovative models could threaten traditional direct-sales value propositions, such as the CSA. For example, some newer CSA boxes now include foods purchased from other producers or from outside the region, making it harder for the “traditional” CSAs, relying solely on their own crops, to compete in a market of consumers who have come to expect a great deal of choice and diversity. Creating new names for some of these new models could bring clarity to consumers and allow producers to continue operating in their preferred niches.

Leverage Point #3: Increase education opportunities for new producers. The rules of the system (such as incentives, punishments, constraints); Reinforcing feedback loops; & Information flow structures

Recent years have seen a surge in interest in the farming profession, especially from people with no prior family farming background (Washington State Dept. of Labor and Industries, p.3). Many of these aspiring producers are drawn to a scale of farming outside of the the large agribusiness paradigm, and would prefer to engage in food production for local markets. Instrumental in the success of new farmers is proper training at the outset. Many experienced farmers are willing and able to educate these beginning farmers, but rarely can they afford to pay the farmers-in-training for their labor. However, many farmers taking on unpaid (or low-paid) interns open themselves up to the possibility of fines and penalties, due to a variety of national and state regulations (Washington State Dept. of L&I, p. 3). In Washington, some mechanisms already exist for aspiring farmers to intern legally. The Cultivating Success program and Jefferson County’s Farm Innovation, Education and Leadership Development program are two examples of educational offerings that provide hands-on experience. However, both programs cost money for the participants, and might be out of the reach of some. Efforts are needed at the government regulation level to legalize farm internships. A 2010-2011 pilot in two Washington State counties provided an example of how such a structure might be set up, but efforts to expand it were stymied by state budget shortfalls. Continued advocacy for changes that protect and support both new and experienced farmers will be critical to fostering the next generation of farmers. Worth noting is that this surge in new farmer interest, if properly nurtured, could substantially affect the regional farming system. At the most basic level, more farmers means more overall food produced in this system. Many new and younger farmers are eager to create communities and connect with each other; if this trend holds, these new farmers could likely take advantage of Leverage Point #2 (see above) and participate in shared distribution and marketing ventures. As these farmers become more experienced in their trade, they will become more adept at producing food efficiently, and between the higher number of producers and their photo credit: broken banjo photography

leverage section points title

increased food production, the prices for their products might decrease. That could stimulate demand, and thus expand the market for their products, hopefully at a level that makes up for any price decreases. Causal Loop Variables Influenced: number of new farms started, number of regional farms, new farmer education and internship opportunities Unintended Consequences: It is possible that after their own and others’ investment in a new farmer’s education, that new farmer will decide after a few years to leave the industry. Conversely, established farmers with internships might take advantage of “free” intern labor and not live up to their requirements around the educational expectations of the internship. Another risk is that so many beginning farmers might enter the profession that the market will not be able to support them all, and some could go out of business or threaten the livelihoods of established farmers.

Leverage Point #4: Encourage a whole-systems approach by creating value from waste and other underutilized resources.

Meadows Leverage Point: Self-organization - The power to add, change, or evolve system structure. If the farm is viewed as a whole system so that all inputs and outputs are balanced, new business opportunities could arise. Instead of imperfect fruit left in the field to rot, the “seconds” could be sold to food preservers, or production waste could be put back into the soil as compost. This type of thinking could change the way that the food system deals with waste, converting it instead into a potential revenue stream for farmers, thus increasing their profitability. An example outside of the region is Bethesda Cares, the official ‘gleaner’ of the Bethesda Farmer’s Market. Farmers donate fresh produce not sold at market -- an average of 300-400 lbs. of local produce per week. When crops are at peak harvest, Bethesda Cares receives more fresh food than it can use before the food spoils. To address this problem of spoiled food, Bethesda Cares and Full Plate Ventures launched Farm to Freezer this summer and now Bethesda Cares’ meals manager uses the frozen food in preparing healthier meals for its clients. At present, farmers likely would not see increased revenue from this particular model beyond possible tax benefits, but variations of this model could be developed that might generate income. Causal Loop Variables Influenced: amount invested in secondary income opportunities, amount of sustainable practices used, amount of resources allocated to admin/ marketing/new business development Unintended Consequences: In order to turn food waste into a value proposition, producers might have to invest in costly capital investments that that may or may not end up paying for themselves. Similarly, the cost to the producer of collecting this “unsellable” food (through, for example, employee wages) might not make it worth it for them to to continue with that business. Finally, whenever producers find additional money to be made through “waste” food, the charitable food sector loses a potential source of nutrition for its low-income clients. photo credit: broken banjo photography

section title stakeholder analysis

Stakeholder Analysis Matrix Below is a short description of the key stakeholders related to this problem, including the people/entities most affected by it.

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section title

Business Players

Business Players: Opportunities and Threats Small Producer: Starvation Alley Farms is the first organic producer

of cranberries in the entire state of Washington. They are a 10 acre organic cranberry farm that is working to find its niche in sustainable cranberry producer in the region. Leverage point #3 - education - has strongly influenced this enterprise, as the two young farmers behind the operation learned first how to grow cranberries and then how to produce them organically. They discovered firsthand about the power of leverage point #2 - new markets and distributionas they transitioned their business from selling non-organic berries as a commodity crop to Ocean Spray, then achieving organic certification and finding the customers and markets that would accept this specialty product, sold at a higher price. Educating consumers about the value of organic cranberries (calling upon leverage point #1 - shifting values) will be a crucial opportunity for them to grow their brand and increase their revenue. In addition, they are considering leverage point #4 - whole-systems approach - as they attempt to address the waste in their system, instituting a bottle recycling program with their customers.

Threats to Starvation Alley farms include the large cranberry producers and distributors whose non-organic product is much less expensive. Consumer education about their product and building loyalty will be crucial. For now, a major opportunity is the uniqueness of their value proposition; as the only organic cranberry producer in the state, they can market their products at a fairly high price. As a new and relatively untried business, however, the threat of failure certainly cannot be ignored. Many new farmers must experience a great deal of trial and error before discovering what products sell and what market techniques are effective. Should new farmers see their success and enter the organic cranberry market, this unique value proposition could be significantly threatened, as competition for market share plays out.

Producer/Aggregator/Incubator: Viva Farms is a non-profit

based in the Skagit Valley. Their mission revolves around leverage point # 3 - education; they work to train and launch the next generation of farmers. They do so by leasing land and providing business and farming training to aspiring farmers, many of whom are former farmworkers. Viva also leases the equipment needed to start farming to its participants. Incubator farmers can grow food on Vivaâ&#x20AC;&#x2122;s land for a few years and then are assisted in finding their own land to farm. Viva Farms also demonstrates leverage point #2 - new markets and distribution - by helping its farmers sell their product. Viva purchases some of the produce grown by its incubator farmers for its farm stand, CSA, and wholesale accounts. Viva also assists its incubator farms in finding the best market niches in which to operate. Despite the many opportunities that Viva provides to its producers, the new farmers still run the risk of investing time and money in a field in which they ultimately cannot succeed, if they are unable to find a successful value proposition and differentiate themselves in the market. Furthermore, when it comes time to find their own land, the producers might find their profession significantly less feasible. Threats to Viva and to its farmers include the competition they face for market share with produce that comes from out of state. Their locally-based CSA must also compete with a new type of CSA model that relies on produce from organic distributors to offer a full year-round package of offerings from beyond the Northwest. The individual incubator farmers face competition in the direct

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section Players title Business

sales arena. The most profitable farmers markets already have enough produce vendors, which means that newer farmers are relegated to smaller markets where they might not break even. In attempting to access wholesale markets, these producers must also compete with the large-scale agriculture system, especially the large organic agriculture system, which sets the prices for organic produce. If the farmers cannot match these prices, they are unlikely to close the deal. An opportunity for Viva Farms would be to attempt to increase demand for local produce. This might mean convincing local restaurants or other buyers that they should purchase from local farmers. It could mean recruiting new participants to their CSA. These types of decisions would be driven by a values shift such as that described in leverage point # 1. Another opportunity would be to limit the current benefits that large-scale agriculture enjoys. If government support shifted away from large commodity growers to smaller speciality crop producers, it would improve smaller farmersâ&#x20AC;&#x2122; ability to compete price-wise in the market

Distributor/New Market Facilitator: FoodHub, a project of Portland-based non-profit EcoTrust, is an online business

to business tool that connects food buyers and sellers, such as farmers and restaurants. The tool allows producers and purchasers to advertise what they have to sell and what they hope to buy. This fall, Food Hub announced that they will partner with New England-based company Organic Renaissance FoodEx to form a new regional food social venture for-profit. FoodEx owns trucks and warehouse space which it uses to physically aggregate and distribute food from New England producers to wholesalers. The partnership will merge FoodHubâ&#x20AC;&#x2122;s technology platform with FoodExâ&#x20AC;&#x2122;s physical infrastructure. A pilot project will occur in New England, with hopes of bringing the model back to the Pacific Northwest. This business will provide opportunities to farmers by testing new possibilities related to leverage points #2 - new markets and distribution and #1 - shifting values. The entire purpose of this model is to increase market opportunities for small farmers, digitally and physically connecting them with new buyers in order to increase sales and increase profit. At the same time, this model could threaten some of the existing relationships that farmers may have developed in their region by making buyers aware of additional regional options for purchasing. The FoodHub/ FoodEx venture also taps leverage point #1 by providing the infrastructure that will allow more regional wholesalers to respond to an increased demand for local food. As more businesses and individual consumers put increased value in their locally-grown food (for reasons of taste, local economic impact, nutrition, environmental benefits, or any other reason), this distribution infrastructure will support those decisions. There is, of course, the possibility that a farm will find so many marketing opportunities through this system that it cannot meet all of its demand, but at present that is probably not the concern of most farmers. The new venture itself faces threats and opportunities. A major threat to this model is the dominance and economies of scale enjoyed by existing produce distributors and food distributors (like Sodexo and Sysco). Those distributors will likely be able to offer lower prices for many products, so the FoodHub/FoodEx business might have to work especially hard to shift consumer values leverage point #1, which means encouraging buyers and consumers to prioritize food quality and the economic health of the region rather than focusing primarily on price. Therefore, the vast number of businesses and individuals currently choosing food based on price also presents a huge opportunity, because if swayed, there could be a vast new demand for regional food. Threats are also present to this venture in the nature of their desire to change the way small farmers do business. Creating new markets and distribution opportunities leverage point #2 - might not always provide a clear and predictable path to profitability, because small farmers are often by nature very independent, and may prove reluctant to meet the demands and expectations, however well-meaning, of this cooperative distribution venture. It can be difficult to communicate with farmers, especially during the growing season, and this model relies on a high degree of communication

Business Players

and trust. If farmers back out or are unable to deliver what they have promised, the reputation of the new FoodHub/FoodEx venture could suffer along with the producer’s reputation. Conversely, the opportunity to bring many different farmers and food producers under one umbrella suggests that untold new opportunities for collaborating, aggregating, and developing new products could result.

Processor: OlyKraut is an Olympia-based raw, fermented sauerkraut company that distributes their product regionally.

Over the past four years, OlyKraut has increased their produce purchased from Western Washington Farmers from 2,000 lbs to nearly 20,000 lbs annually and a number of farms have increased their acreage in production to meet that demand. OlyKraut makes a fermented product which preserves the vegetables, allowing produce grown in Thurston County in August or September to be enjoyed in a healthy, living form in January or February, long after the fields have frozen. OlyKraut promotes its connections to local farms in its marketing, which benefits both the company and the farms. This visible connection between OlyKraut and their public suppliers makes clear to the public the importance of a strong network of players in a regional food economy. Their business model, then, directly works within leverage point #2 by providing a market for local produce and even helping those farms to plan their production, while also promoting those farms alongside their own business. Their explicit connection to local farms also makes use of leverage point #1 by encouraging customers to value products made with locally-grown produce. OlyKraut also educates consumers about sauerkraut, relying on new and future customers who value their product both for its taste and its natural health benefits. Leverage point #1 - shifting values - is crucial to their operation, because without dedicated customers, they would not be able to stay in business. In a field with many alternative goods, and in which their product is often more expensive than many of the condiments purveyed by national food businesses, their unique value proposition sets them apart. Other small sauerkraut companies in the region are both a threat and an opportunity; they increase competition for the same market, but at the same time increase the visibility of the product and hopefully broaden the customer base through increased exposure. Another threat to OlyKraut is the risk that a produce supplier might fold or have a crop failure. By diversifying its suppliers, OlyKraut can mitigate this risk.

Retailer: Olympia Food Co-Op (OFC) is working very proactively in leverage point

#2 to increase the market for locally grown produce by promoting it to customers, subsidizing local products, coordinating crop planning among regional farmers, and providing “fresh sheets” listing available seasonal products to other local wholesale food buyers. OFC used to add 10% to the wholesale value set by Charlie’s Produce, a large produce distributor in the Pacific Northwest, to determine the prices they would pay local growers. After hearing that many of the local farmers thought the standard prices set by Charlie’s Produce were too low, they tried something different. They surveyed their local farmers about fair prices and then paid them that rate for a year to accrue a list of prices for Olympia-area produce. Now, after developing average price and letting the farmers weigh in, the OFC helps coordinate which farms will supply the majority of each crop. This allows the farmers to plan for the following year. OFC also subsidizes local produce by reducing their standard markup on local goods but not on non-local goods. In addition to increasing local farms’ profits by serving as a consistent local buyer, the OFC works to educate consumers and prompt a values shift towards buying local. Their Local Farms, Food, and Products Committee, dedicated to supporting the economic and

section Players title Business

community development of local food producers, represents their commitment to shifting values - leverage points #1 and creating new markets, #2. Although the OFC provides an opportunity for local farms to sell their produce at a fair price and find additional buyers through OFC’s fresh sheet program, farmers must realize that there are always risks involved with relying on one customer for most of one’s revenue. A few years ago, when gardening increased in popularity, the produce sales at the OFC experienced a noticeable drop because a number of the OFC shoppers are also gardeners. To mitigate damage from these unexpected events, farmers should rely on multiple buyers for their income. Their dedication to and reputation for working with local farmers not only builds up the local food system, but also provides the Olympia Food Co-op with opportunities to increase their own viability as a business. The more success they can bring to the farmers, and the more they can educate consumers, the greater their profit will be from selling products grown close to home. A potential threat to the OFC is always competition. Because they offer higher prices to their local producers, the OFC frequently has higher prices than many of the larger grocers in the area. For the most part, their shoppers are not price-driven, but there is reason to believe that the current state of the economy is driving some shoppers to purchase produce elsewhere. Keeping values-driven customers should be a priority for OFC. Another potential threat is the failure of one of their farm suppliers. By maintaining multiple local connections for each product, the OFC ought to be able to keep the products they need on the shelves, barring a regional blight or weather event.

Distributor: Organically Grown Company

(OGC) is the largest wholesaler of organic fruits, vegetables and herbs in the Pacific Northwest. They are committed to organic produce and to becoming ever more sustainable in their business practices. Firmly entrenched in creating new markets and distribution - leverage point #2 - they purchase over 90% of their products directly from growers. OGC is unique from other large distributors because of their ability to distribute reliably and because of their Ladybug brand which exclusively markets produce from Oregon and Washington. This labeling creates momentum around shifting values leverage point #1, helping empower consumers to make educated choices. OGC positively impacts the system for producers because they serve as an important market for produce from a wide variety of regional farmers. By buying local produce and promoting the local brand, they increase producer revenue.

While boosting profitability for local farms, Organically Grown Company also increases its own profit by capitalizing on the Ladybug label and making it easy for buyers to find the food that matches their values. However, if OGC’s suppliers charge more for produce as one way to increase their right livelihood, OGC and other aggregators would have to pay higher prices, decreasing their profit margins. In addition, if small to mid-sized farms decide to pursue a more direct-sales based market strategy, OGC could lose some of its suppliers. OGC also strives to reduce waste in the system - leverage point #4 - in its business model, regularly donating unsellable produce to hunger-relief organizations, a practice that benefits the community and helps OGC’s bottom line by reducing their tipping fees. Should OGC decide to process and sell this product, however, it would hurt the food banks that currently benefit from that produce.

Conculsions

Conclusions Washington State’s smaller producers face a system rife with challenges, but also full of potential. Augmenting the possibilities and opportunities for farmers - the root of the food system - creates outward ripples that ultimately influence consumers and community members - that is to say, all of us. The effect works the other way, as well. If the population as a whole approached food consumption in a thoughtful manner, making choices that would produce the best outcomes for themselves and the whole food system, this values shift could spark untold new possibilities for those producing food in the most sustainable ways. Small farmers could compete more favorably with big agribusinesses, grow their profits, and live their right livelihoods. Our interviews and research suggest that expanding opportunities at the regional level of agriculture could help change the paradigm of the current system. Connecting producers to each other, linking farmers and new buyers, and solving distribution challenges will all be essential to this shift. Training the next generation of farmers and encouraging them to develop unique and holistic value propositions will also be necessary for the system to succeed. We were able to identify a few essential guiding principles that we will use going forward into the next phase of our work. One principle, alluded to above, is the role of the value of food. When most consumers value food that is inexpensive, and farmers cannot make a profit if they sell their food below a certain price, a conflict is a created. Boosting farmers’ net income might involve a combination of encouraging consumers to accept higher prices and also reducing expenses and creating multiple revenue streams so that farmers can lower their own prices in a way that still allows for profitability. At this point in time, there is a huge opportunity cost for most of the small farmers in the system. Many could be earning much more money in another profession. In addition, the investment in land an infrastructure that farming requires is a formidable obstacle. If we want farming at this scale to flourish, we must help make farming a financially competitive career. By working together, sharing resources, and combining their products, some farmers might be able to carve out a profitable place for themselves and chip away at the advantage held by the biggest producers. The shifts and changes we describe will not happen easily, or overnight. Fortunately, Washington’s hard-working food producers have allies all over the region who are committed to seeing small-scale agriculture thrive. We hope that this report might play a small part in supporting the work of these food systems advocates; at the least, the writing of it has inspired the authors in their own future work in this realm as students and beyond. The triple bottom line of people, planet, and profit not only forms the foundation of our learning, but also grounds the system in which small farmers operate. Encouraged by this symmetry, we look forward to dreaming up new ideas and business models that support the livelihoods of Washington’s farmers.

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section title References

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