
How to Get into Farming with No Money (1980) - docbrown
https://smallfarmersjournal.com/how-to-get-into-farming-with-no-money/
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taneq
> An important item here, as well as in the future, is to deal on a CASH
> basis. You MUST NOT borrow to pay later. I don’t want to give all the
> reasons for everything I’m recommending — you will have to trust them. Pay
> as you go, EXCEPT for a SINGLE exception (later stated) is the best.

A farm is a business. Starting a business on a cash-only basis is possible and
arguably safer than borrowing, but it's very slow going.

The way most farmers get started is they take out a great stonkin' loan from
the bank ($10mil+) and buy land, stock, machinery etc. They then run their
newly established farm and try to turn enough of a profit to pay the interest
plus a bit of capital.

That's why farmers tend to be "asset rich and cash poor" for the first 20-30
years and then (if they're both diligent and lucky) are suddenly super wealthy
once they've paid their loans off.

(Source: dairy-farming relatives)

~~~
toasterlovin
Small bit of pedantry: the nature of paying off a large loan over 30 years is
that you gradually become wealthier at an accelerating rate. The sudden change
after the mortgage is paid off is to cash flow, not wealth.

~~~
taneq
True, I should have said "suddenly have loads of cash once they've paid their
loans off."

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blueyes
I think it is much easier to get out of farming with no money, than to get
into it. In the US, policy has punished rural communities and farmers for a
long time:

[https://www.amazon.com/Harvest-Rage-Oklahoma-City-
Beginning/...](https://www.amazon.com/Harvest-Rage-Oklahoma-City-
Beginning/dp/0813332931)

~~~
JamesBarney
Mind giving some highlights because all I hear are about farm subsidies and
never about any policies that hurt farming.

~~~
cmroanirgo
In my country (Oz) it's the same story. Families who've owned properties for
generations can't keep up with the mega-corp style of farming, particularly
when drought, or other semi regular calamity hits. A mega Corp can go into
'the negative' during these times, but only really experience a 'blip' on the
balance sheets. A family farmer will have a 2nd/ 3rd mortgage rejected, when
only a generation or two previously they had no debt whatsoever.

Governmental help comes in the form of lacklustre subsidies, or too small and
too delayed financial aid, while at the same time providing massive grants to
companies that are in the agri business system.

One example is the legislation of allocating "water rights" to the main river
systems here, all of which has caused farms to go bankrupt, the middle men to
get rich and we now have increased rice (!! Rice in Australia) production.

~~~
taneq
> Families who've owned properties for generations can't keep up with the
> mega-corp style of farming

You'll notice that families who've been cobblers for generations can't compete
with Nike on price, either. Economies of scale and international wage
arbitrage really matter.

~~~
WalterBright
On a grand scale, it's the same with car companies. People have started car
companies (Tucker, Bricklin, DeLorean, Tesla), but they usually underestimate
by a factor of 3 or more how much money it really takes to do it.

------
rmason
There's another way that I've seen people do it and that's farming as a
service. You get people to give you cash upfront for a subscription that
guarantees them a certain amount of fruit or vegetables. You rent all your
equipment by the hour to plow and plant the field. Because your subscribers
pay you upfront you have no need to borrow money.

The problem with subscription farming? You have to grow what your customers
want to buy not what you want to plant. If you have a natural disaster you may
need to refund some of your customers money. You also have to learn to sell
which to some people is anathema.

But I've seen people successfully do it. There are even people doing it in the
inner city of Detroit. In Detroit with the city selling lots for $100 it may
pay to buy your land upfront. You also can use city water for irrigation.

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no_wizard
I grew up in farm country. Notably, it was mostly small family farms or co-
operative farms that I lived around[0]

The observation I made about farming that always made it difficult
(financially) was that all the wealth was tied up in _things_. Your acres,
your livestock/crops, your home(s) and other property. High value equipment as
well (tractors aren't cheap, neither are their accessories).

The issue was always turning these _things_ into cash. So mortgages were one
way (though if I'm being honest any one who has run a large scale farming
operation probably doesn't lean on the mortgage. You can get agribusiness
loans with much better terms and crop/livestock insurance[1]).

Contrary to popular belief though, the land that is actually farmed is mostly
leased/rented, but its typically a long term deal, so you don't have to borrow
millions of dollars just to increase acreage [2]

This was something that large corporations don't have such trouble with (not
to mention, most large agriculture companies have a portfolio of assets that
they make money from, not just their production). I also noted that those in
good co-operatives didn't have as much of an issue with this either (co-ops
are good market makers and can help small farmers with buying power if they
need to change crops quickly in response to market demand.

See all the bankruptcies and delinquencies hitting wheat farmers right now [3]
some of which is in part to the trade issues we're having with China. They're
a huge net importer of certain cash crops. Most of these guys were all in on
their cash crop, without a good way to get ahead of market demand to re-
calibrate their crops. Livestock is much harder in this sense, but its still
doable)

This is the common reason why older farmers tend to sell (beyond simply
crushing debt. It does happen for a lot of reasons. I'm not trying to under
sell this. its just hard to write up a lengthy post here without it becoming
an article). So they can actually _cash out_

[0][https://www.ufcmn.com/About-Us](https://www.ufcmn.com/About-Us)
[1][https://www.farmermac.com/](https://www.farmermac.com/)
[2][https://www.ers.usda.gov/topics/farm-economy/land-use-
land-v...](https://www.ers.usda.gov/topics/farm-economy/land-use-land-value-
tenure/farmland-ownership-and-tenure/) [3][https://www.wsj.com/articles/this-
one-here-is-gonna-kick-my-...](https://www.wsj.com/articles/this-one-here-is-
gonna-kick-my-buttfarm-belt-bankruptcies-are-soaring-11549468759)

EDIT: if the people of HN will it, I could do a long write about about
Agriculture economics. I've got a strong background here.

~~~
infinite_beam
please do write about Agriculture economics. It is a fascinating topic.

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rurban
The modern American way is to announce it on a website, promise to make a
movie, and do everything with crowd-founding and hire a bunch of college kids
for nothing, plus two Mexicans. Actual knowledge of the business not required.
See the current movie "The biggest little farm".
[https://www.sundance.org/projects/the-biggest-little-
farm](https://www.sundance.org/projects/the-biggest-little-farm)

The previous famous way was "Farmer John" near Chicago, which was similar, but
more of a collective.

------
foxhop
The 8 forms of capital

[http://www.appleseedpermaculture.com/8-forms-of-
capital/](http://www.appleseedpermaculture.com/8-forms-of-capital/)

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pugworthy
Followup article: "How to stay in farming and make no money"

~~~
pjkundert
“How to make a small fortune in farming”.

Start out with a large fortune.

~~~
cardamomo
I was about to share the same joke, which I was recently told by a worker at a
California vineyard. In the major wine-growing valleys of California, land now
sells for millions of dollars an acre, hence the large fortune necessary for
entry.

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burmer
Obligatory Mitchell and Webb:
[https://www.youtube.com/watch?v=_pDTiFkXgEE](https://www.youtube.com/watch?v=_pDTiFkXgEE)

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croh
i just came across this article in google and tried to submitted on HN. what a
coincidence, u did tat just 2 hours back.

~~~
thedaemon
Their karma is much higher. It's a vetting process here.
[https://news.ycombinator.com/newsfaq.html](https://news.ycombinator.com/newsfaq.html)
Read the FAQ / Rules.

~~~
croh
lol lot of downvotes. hard to understand. i was just searching about farming.
want to point out randomness. wat astonished me, even this is not hot topic,
somebody submitted same link to HN just few hours ago. didnt get why too many
downvotes to point it out for fun.

~~~
jessaustin
In the last month downvotes seem to have made a break with reality. I used to
argue vehemently that one could learn from them; now I'm not so sure...

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Ocysellus
This seems really useful, especially in an age where there's food insecurity.

