Driving Success for New and Beginning Farmers in Rural America — An Ecosystem Approach

America’s agricultural sector faces a daunting challenge: the drastic aging of the US farming population. The average US farmer now exceeds 58 years of age, and as a result, about 10% of farmland will change hands between 2015 and 2019. One way to slow this trend would be to help young and beginning farmers tap into the economic potential of more direct marketing routes in urban areas — but young farmers are geographically removed from high-value small farms.

In certain urban and semi-urban pockets of the country, the combination of a thriving “farm to table” consumer movement, high-tech farm sustainability tools, and “Slow Money” — start-up capital — have given rise to innovative, sustainable, small-scale farms. These typically small sustainable farms pose tremendous growth opportunities to “entrepreneur farmers,” but relatively few young farmers have tried.

Meanwhile, higher populations of rural young farmers are growing farther away from small sustainable farms, congregating in Midwestern states on much larger plots, typically with less inclination towards sustainable local sales.

We contend that an “ecosystem approach” to enabling the spread of recent entrepreneurial trends in farming could mitigate this disparity by driving innovative solutions to bring about local food systems that support new and beginning farmers in rural areas.

The Next Generation of Farmers

In general, farms are getting bigger. But there has been recent (2007–2012) growth in local, sustainable farming in urbanized areas. Here, differentiated local food economies are in place where intermediated channels and food hubs guarantee higher prices for farmers. These differentiated products often require more sustainable farming techniques, which boosts eco-friendly practices. Further, higher prices for produce and urban land both tend to correlate to smaller plots of land. Smaller plots of land are correlated with younger farmers, who also tend to be more sustainable in their practices.

The upshot? Smaller sustainable farms tend to be concentrated in densely populated areas, where young farmers can get access to capital and consumers and start their own farms. Meanwhile, young farmers on larger farms — presumably taking over family farms — are most prevalent (by percentage and growth of farmer population) in Midwestern states. Southern states have high numbers of small young farmers with relatively moderate determining factors: moderate land values, moderate population density, and midsize to relatively small farm sizes.

Why are young farmers starting their own operations in population-dense areas with comparatively small plot sizes?

• Where there are start-ups, there is start-up capital (for farmers, too). One of the primary barriers to entry that new and beginning farmers face is access to sufficient, patient capital to pay for high start-up costs. In fact, 78% of farmers said that “lack of capital” was the #1 barrier to entry into farming. The regional popularity of young sustainable farmers can be attributed to locally available start-up capital — nearly a quarter of which is concentrated primarily in the Pacific Northwest — called “slow money.” This trendy financing supports small-scale, mostly organic farms.
• Urban produce can go directly from farm to town to table. Population-dense areas in the US give small farmers the “distinct advantage of direct access to local markets — including farmers’ markets, Community Supported Agriculture, and direct-to-retail sales.” Combined with a growing willingness of consumers to pay for local produce, this increases profit margins by cutting down on transportation and distribution costs. It also cuts down on emissions and holds farmers accountable directly to picky customers, making it more sustainable.

The question then becomes: are young farmers in rural areas missing out on a higher value chain in small farming?

Supporting Local Economies

What effect do these semi-urban, small, sustainable farms — and their young farmers — have on economies? By utilizing small, often idle, properties to produce and sell farm commodities, they are driving economic growth and returning job opportunities to the US.

• Direct-market channels contribute to localized food systems. These distribution channels have been shown to have significantly higher output multipliers compared to their non-localized counterparts (eg. 1.77 vs 1.42 in Sacramento, CA and 2.6 vs 1.4 in areas of the Midwest). Hence, the economic growth and the flow of wealth is maintained within a community, rather than outflowing to far-away states or international growers.
• This notable difference has been tied to overall economic growth, with a $1 increase in direct-market channels correlating to a $0.22 increase in personal income over the course of 5 years, a large correlation considering agricultural workers make up less than 2% of the workforce.
• More jobs. These farms demand labor to cultivate, harvest, and sell their products. The USDA’s Economic Research Service has found that $1 million in sales contribute to 13 farm operator jobs. Prior research shows the labor multiplier for agricultural laborers to be relatively high (e.g. 1.94 for California and 1.69 for New York), suggesting an even larger labor market impact.
• Improved food security. Positioned within urban or semi-urban areas, these farms improve access to healthy fruits and vegetables. Through various incentive programs, farmers are often able to offer otherwise inaccessible fresh fruits and vegetables at reduced costs. Not just a social improvement, improved food security can reduce medical costs associated with diet-related chronic disease.

Young Rural Farmers Left Behind

Small, rural farming has been less viable than their urban counterparts or the traditional large-scale monoculture operations of rural America, arguably for two reasons: the lack of local demand for high-markup, small-scale produce, and the greater efficiency of large-scale monoculture operations. This efficiency is partly driven by digital technology that small rural farmers can’t utilize as efficiently.

• Rising land prices make it more difficult to turn a profit in rural areas without a large-scale operation. Land is growing in value at rates not seen since the 1970s. For young urban farmers, rising land prices can be a good investment, and can be offset by high-profit, direct-to-consumer sales. For young rural farmers, land may be plentiful but difficult to purchase with limited funds. Without the ability to sell locally, young farmers often do not have access to the capital to invest in these larger plots of land in rural areas.
• Big agriculture has become more efficient, in large part by using data-driven digital technology to maximize yields and efficiency. Larger farms have become more efficient because they have the ability to invest in “labor-saving machinery, technology and specialized management,” says Tim Griffin of Tufts University. Digital farm management technology is available: companies from Monsanto to DuPont to tech start-ups are offering applications to help monitor and manage water usage, temperatures, weather, soil conditions, pests and more. Adoption of these technologies is not necessarily voluntary. Large-scale farmers have bought into digital farming applications at the behest of large-scale buyers seeking more efficient and reliable crop production. Buyers like Anheuser-Busch InBev have sent agronomists to barley farmers to promote an app called SmartBarley, which monitors 40 variables that affect productivity.
• Despite being willing to adopt new technologies, young, educated rural farmers may not have the means for full-scale digital operations. Digital farming applications require mobile internet connectivity. Rural individuals are far less likely to have internet-enabled mobile phones than urban individuals (45 percent to 54 percent). Even if rural farmers were to rely solely on a hard-wired internet connection, figures show significantly lower internet usage among rural Americans (4% less), especially among less educated populations, which means less access to desktop e-tools.

System for Change: An Ecosystem­­ Approach

Just as biologists consider the entire ecosystem when staging interventions for biological disruptors (invasive species, diseases, habitat loss, etc.), a similar ecological approach should be considered when working to grow rural local food systems to support new and beginning farmers. Researchers have identified five common elements in successful ecosystem interventions for society’s most difficult problems:

• Engage a broad community of “wavemakers.” Farmers are top-of-mind when it comes to establishing a strong local food system, as they should be. But it’s important to consider additional players. Investors, for-profit businesses, nonprofit organizations, innovators, governments, and consumers make up the arsenal of players who should be engaged to drive solutions for the creation of local food systems. It is important to consider unexpected players. For instance, one study shows that entrepreneurial local food systems increase fruit and vegetable intake in rural populations. While additional research is needed to directly tie this to health improvements, this information is sure to turn the heads of rural health professionals, demonstrating the need to consider even the unexpected stakeholder like a rural clinician.
• Establish an ecosystem integrator to create the space for aligned action by others. While the involvement of a multitude of players is imperative to success, it also means that organizations may have different goals. While differing opinions are encouraged, it’s vital to have a central organizer to ensure everyone is working together toward the common goal. State agricultural departments, local governments, USDA extension offices, or even nonprofit organizations can fill the integrator role in ensuring everyone works toward the common goal — strengthening the local food system to support new and beginning small scale farmers.
• Attack the problem with a portfolio of solutions. The involvement of many players means that not everyone will converge on one best solution. And that’s okay! With such a complex problem, the larger the portfolio of solutions, the greater the chance of achieving the common goal.
• Develop an innovation engine to drive ideas for solutions. New solutions are generated when partners within an ecosystem interact cooperatively and competitively. Successful innovation can be encouraged through a variety of vehicles. For example, Prize Based Solutions define the challenges and offer prizes to teams or individuals, providing incentive for talented minds to drive innovative solutions. Pay for Success Programs have also been shown to be successful drivers of inventive solutions, with government payments to service organizations based on metrics performance.
• Create sustainable solutions in well-functioning markets. An innovative solution is futile if it is not sustainable. Therefore, it is imperative that solutions are supported by the development of long-lasting markets. In the rural town of Hardwick, VT, dubbed the “Silicon Valley of local food,” a burgeoning local food movement is made successful — and sustainable — through well-functioning markets. Driven by consumer demand, there is a local farmers market, restaurant, and grocery co-op to provide marketing avenues for small-scale farmers and ensure their sustainability.

At a time when the farm population is aging at an alarming rate, it is imperative that young adults have an economically viable opportunity to enter the agricultural production sector. The rising cost of farm land and the increasing size and scale of farm operations forces many potential farmers to turn their backs on agriculture. But we can change this. New and beginning semi-urban and urban farmers have had incredible success in operating on a small-scale basis with the helping hand of a thriving local food system. Rural areas have not yet met with the same success. An ecosystem approach opens up a door of endless opportunities for interventions to address this challenge, giving our future farmers the support they need and deserve — safeguarding the future of our food supply

Blain Anderson, William Plews-Ogan and Steve Watkins contributed to this piece.