Farms R Us? Part 2


By Mary-Howell Martens (with Klaas’ help!), Lakeview Organic Grain
Originally posted on August 3, 2004

What follows is the final installment of a two-part series that developed when our friend Sandy asked us last winter to “franchise the design of our farm” onto his farm.

Taking up the challenge, we have attempted to identify a package of key factors that work on one farm and that could be transplanted reasonably intact to a new situation, leaving sufficient flexibility for appropriate adaptation. If nothing else, this approach helps us look at organic farming more as a holistic system with a definable set of interrelated pieces that must be managed.

So, without further ado, let’s pick up where we left off:

Sales management

It is important to match crops with markets. Some organic crop, such as soybean, are very easy to sell, while other crops, such as corn, rye and barley, are more difficult to move, unless you have nearby organic dairy farms, an organic feed mill or grain co-op. Before putting any seeds into the ground, it is important to plan your markets, make contacts and, if possible, obtain favorable contracts.

Many organic grain market opportunities are not entirely as they first appear. You may be expected to store the product for months until the buyer is ready to take delivery. Since organic farms generally produce a larger number of different products due to crop rotation requirements, this may necessitate the acquisition of more bins, storage facilities and appropriate handling equipment. Monitoring grain moisture and quality from harvest until sale is essential, since buyers generally want grain to be of equal or better quality than it was at harvest.

You may be expected to arrange cleaning and delivery of the grain. The cleanout for organic products may be higher than with similar conventional products, but often it is possible to find alternative markets for the cleanout, especially with soybeans.

When contacting a new buyer, it would be a good idea to ask following questions:

• How quickly do I ship the product after harvest?
• Will you take the product uncleaned, and will I be paid on clean or uncleaned weight? How much cleanout/dockage is there likely to be?
• Can you dry the crop for me, and if so, what are the drying costs?
• Am I responsible for arranging and/or paying for delivery?
• How quickly do you pay after delivery?
• Are you interested in buying more than one crop from me? (Sometimes buyers will agree to buy one hard-to-move crop in order to get a second crop that is in shorter supply.)
• And, if you’re not familiar with the buyer, ask for three references from other farmers they have bought from within the past 12 months.
• Additionally, as a protection for farmers, many states like New York require any company or individual buying products directly from farmers to be ‘bonded’ or licensed with the state.

If a farmer chooses to sell to an unlicensed dealer, they do not have the same legal protection in the event of nonpayment.

Sales documentation of organic product is more complicated than with conventional. However, most buyers will refuse to pay until they receive full documentation supporting the organic integrity of your product. After all, their certification could be at risk if you fail to deliver full evidence of product certification. Therefore, each load must be accompanied with a:

• Bill of Lading, listing you as the seller, the date, the buyer, the product identified as ‘certified organic’ (indicating the certifier), the lot number, an actual or estimated weight, and the weigh slip.
• A signed ‘clean truck affidavit,’ stating that you inspected the truck or wagon before loading and that it was clean. This affidavit documents that you, the owner, have taken full responsibility for the organic integrity of the product and have done all you can to prevent any co-mingling with non-organic product or other contaminants. This doesn’t have to be anything fancy. You can get a package of generic Bills of Lading from an office supply store and simply write the signed clean truck affidavit statement at the bottom.
• After delivery, it is your responsibility to supply the buyer with a copy of your organic certificate covering the year the crop was harvested and any other sales documentation that your certifier requires (e.g., transaction certificate, organic transfer monitor, etc).

Save copies of all this documentation for your records; you will need it during next year’s inspection!

Administrative management

The organic industry is absolutely fanatical about record keeping. Complete and accurate records are very important, both for our certifier and for our own farm management. After all, how are you going to know whether you make money on the enterprise if you don’t run the numbers?

Complete, readily accessible field and financial records are our best way to understand what happened this year and how we can do better next year. They are our only way to accurately calculate the cost of production for each crop ‘enterprise’ and for each field and to determine whether profit was made, whether input costs were justified, and whether the right agronomic decisions were made.

Field record keeping can be as simple as a notebook with a page for each field on which is written all field operations, inputs and harvest/storage records. Field maps and three-year field histories should be in the notebook as well. Some farmers prefer higher-tech farm record computer programs, and there are some good programs available. Some farmers even write their own computer record-keeping programs!

Whichever record-keeping approach you choose, it is important to consider whether it:

• Fits your personality and abilities, so that updating will get done promptly and completely with minimal error
• Compiles all the necessary information in a way that is simple and easily accessible, and
• Allows you to summarize and reorganize data for analysis and projection.

In addition to field records, it is important to manage other organic documentation, including saving copies of all the seed and input tags and labels, invoices, weigh slips, Bills of Lading, transaction certificates, check stubs, grading reports, contracts, and the like. Your inspector will want to see them! The simplest approach we have found is to maintain a manila folder for each crop into which all information pertaining to it is deposited for each year. This keeps this information together and easily accessible with minimal effort and time. Remember to save at least one bag label off each type of seed and labels for every input until after the inspection (save the container or take a picture of the label if it can’t be removed).

Of course, another crucial piece of administrative management is paying the bills on time. This is far from the most glamorous job on the farm, but it is one of the first noticed when not done. While paying the bills, it is essential to consider whether the expenses are reasonable and appropriately matched to the farm income and needs.

Financial management also includes payroll, INS documentation, workers compensation, withholding tax and all that rigmarole, having all trucks and other vehicles properly licensed and tagged, and carrying appropriate insurance for the business and equipment. You might want to investigate crop insurance as protection against disasters and consider working with the USDA FSA and NRCS to qualify for cost-sharing conservation and other programs. Cost-sharing money is also available in most states to help cover organic certification; ask your certifier for the name of the correct state office to contact about this.

Certification management

To sell products as organic, you must be certified organic. More than 75 USDA- accredited certification agencies are now listed on the National Organic Program (NOP) website (www.ams.usda.gov/nop), but in reality most areas are best served by two or three certification agencies. In the Northeast, the choice is generally between a regional certifier and several of the larger international private certifiers.

While all NOP-accredited certification agencies now use the same standards, there are significant differences in which details are emphasized and how the certification process is handled. Certifiers also vary greatly in price and in their attention to farmer support and education. While certifiers are not supposed to tell individuals how to ‘overcome barriers to certification,’ they are allowed to distribute informational newsletters and hold group educational meetings. Some certifiers do a great job of providing farmer education and support in this manner, while other certifiers choose to do virtually nothing. It is valuable to shop around a little for your desired certifier characteristics and for a certification staff who can communicate well with you. Ask other organic farmers in your area which certifiers they favor and why.

The first step in becoming certified is to request an application/information package. This includes the standards (rules) and an application. Some certifiers also include valuable recommended record-keeping master forms and guidance information. Pay attention to the deadline for application submission (once you get past the deadline, the cost rises steeply). Along with the application, you will need to submit clearly labeled field maps and 3 to 5 year field histories for all crops and inputs.

After the application is submitted, expect an inspection during the summer and then you will probably get your certificate in September or October. The certification process takes on average about six months, although it can take longer. First-time applicants are not supposed to sell their crops as ‘certified organic’ until they have their certificate in hand.

Further resources

The Rodale Institute has long been a leader in defining and developing organic agriculture and has inspired and educated countless organic farmers and gardeners around the world.

Additionally, Acres USA—a fine monthly newspaper full of articles on alternative agriculture, economics and health—is a great resource. Acres posts a selection of these articles on its website, http://www.acresusa.com/. A number of our articles on organic grain harvest and storage quality, GMO management strategies, the audit trail and organic grain marketing are posted at www.acresusa.com/toolbox/articles.htm. Acres also maintains an extremely extensive mail-order catalog bookstore with wide-ranging books on alternative agriculture, health, economics and lifestyle—also accessible through its website.

The Appropriate Technology Transfer for Rural Areas (ATTRA) (http://attra.ncat.org/) program is funded through the USDA and is an outstanding resource of information. The group’s website is packed with articles, resources and workbooks, and specialists are on-hand to answer specific questions from users. Best of all, it is all free!

The Sustainable Agricultural Research and Education (SARE) Network (http://www.sare.org/) is also funded through the USDA and provides bulletins, books, and research grants. SARE publishes a valuable 30-page booklet entitled Transition to Organic Production, which accompanies a three-video series. For basics in soil science, especially for the Northeast, SARE’s “Building Better Soils for Better Crops,” by Fred Magdoff and Harold Van Es (2000) is worthwhile as is “Managing Cover Crops Profitably,” written by a team of New Farm veterans and their research collaborators (1998), and “Steel in the Field,” by New Farm’s own Greg Bowman (1997). SARE also sponsors the long-running electronic forum Sanet, which provides an arena for information sharing and debate with many organic enthusiasts worldwide.

While your certifier will supply a copy of the National Organic Program’s standards, it is a good idea to become familiar with the NOP website (www.ams.usda.gov/nop) yourself for the regular updates and news.

For a straightforward description of organic farming principles, the Canadian Organic Growers (COG) (http://www.cog.ca/) has produced two books, “Organic Field Crop Handbook,” (1992) and “Organic Livestock Handbook,” (2000). Each presents a reasonable overview of concepts in a clear format. Videos also accompany these books. The phone number for COG is 613-231-9047.

Any good organic farmer should have a detailed weed-identification guide. For the Northeast, the best one we’ve found is “Weeds of the Northeast,” by Richard H. Uva, Joseph C. Neal, Joseph M. Ditomaso (Cornell Univ Press, 1997), with excellent pictures and detailed descriptions. No doubt there are weed guides of equal quality for other geographical areas. You will find several extensive collections of weed pictures on the Internet. The Weed Science Society of America maintains an enormous collection of pictures of weeds at http://www.wssa.net/; Rutgers University maintains a smaller collection of weed pictures and information that is more applicable for the Northeast at http://www.rce.rutgers.edu/weeds.

We have learned much from many other sources, including the outstanding but challenging writings of Dr. William Albrecht, books by Neal Kinsey, Charles Walters, Joseph Cocannouer, Donald Schriefer, Sir Albert Howard, Rudolph Steiner and Ehrenfried Pfeiffer, and old agricultural texts and weed management research by Dr. Bernard Rademacher and Dr. Walter Muenscher. Our old college soil science, plant pathology, seed technology, and entomology texts are still frequently consulted.

For regular inspiration, we highly recommend that all new and existing organic farmers make time to regularly watch two fine films, My Father’s Garden (Bullfrog Films, Oley, Pa.) and Life in the Soil (Mokichi Okada Association, Honolulu, Hawaii). These films eloquently and beautifully remind us why we are doing this and why organic farming is indeed the most important movement in agriculture today.

Franchising?

Now, if we were really sharp, we would work with lawyers to patent these ideas as intellectual property and start making the big bucks through technology transfer and licensing fees. We’re not that high tech and we don’t have a goofy mascot . . . yet!

So folks, help yourself to any or all of this franchise, and help us make this world a better place for our children and yours. Perhaps you can help us develop other necessary key factors in this organic farming franchise.

After all, Hamburger University wasn’t built in one day!

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