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Subsidies are the death of farming

Our farm has never sought any subsidies, we don't do this for political reasons we do this for economic reasons.  Those who provide subsidies (e.g. governments) are fickle and have a tendency to change their minds.  Case and point, German and French farmers are furious with Brussels for having cut their fuel subsidies.  If you undertake an investment based on continuous subsidies it will end in tears, it may take a while but the outcome is certain.

On our farm, we look at subsidies as economic rent (unearned economic benefits).  Our land is too valuable to install wind farms, and the wind here is too uneven to be worthwhile. On the other hand, we were more than happy to receive a subsidy (rather small) for our biodigesters.  The overall impact on our yield was negligible, but it was free, so why not!

We were not lucky (aside from the "direct" to-consumer business) we planned our target markets carefully, and my wife did all the research.  We hired two independent firms to give us a good understanding of the UK food wholesale market.  The two wholesalers we selected were chosen specifically because of our target market: Hotels and restaurants

As an example, we recently got into pork, while prices are falling for supermarket-quality pork.  However, we don't target that market.  Our projection is that our forest-grown pork will command a substantial premium over supermarket pork products.

That is one of the three pillars of our farm, the second one is that we sell only fresh, high-quality heirloom fruits and vegetables.  

The third is that all our fruits and vegetables are picked just as they mature, they are not picked green to make transport easier, granted our delivery chain is very short.  Still Flavor, originality and availability are the cornerstone of our fruit and vegetable trade.

Our Goat cheese is somewhat simpler (and high prices) but our butter business is the result of our unusual cross breading that creates a very fatty milk perfect for butter.  

Every single aspect of our commercial production stands on its own economically.  We don't do anything because of subsidies, and we will never consider such projects unless 100% of the subsidies are provided upfront (that NEVER happens!).  Probably most importantly, it greatly reduces the amount of paperwork.  Those who provide a subsidy want accountability and proof that their pet projects are worthwhile.  It is well known that governments are propelled on a sea of paperwork.

Just before Christmas, we were asked by the local utility to reconnect our power supply to the grid, Jennifer and I thought about it for all of two minutes and the logic simply is not there.  If we reconnected to the grid we would be forced to have semi-annual inspections of our biodigsters and our generators, paperwork and for what?  We looked at our power purchase over the past 30 months, since the biodigesters came on board.  We only purchased power for one day and for two hours, and we did so to avoid powering up the second generator.  

We did this to save £250.00 which is what it would have cost to start up the generator.  We were offered subsidies from the grid authority to do so, but economically it made no sense.  Semi-annual inspection costs about £8,000 a year.  Total subsidy:  £ 3,000.  We would be out five grand for offering a service to the community, after the subsidy (where more paperwork would be required to show that we do use biodigester-produced methane).  We thanked them for their interest and said that at this time we didn't have the time and resources to undertake such a project (why be mean if you can be kind).

Another example is employee subsidies.  There are two types of grants; new hire grants where you can receive up to 50% of the new employees' salary as a rebate, but it has to be their first job.  Secondly,  training grants.  We like to hire women pickers they are patient, careful and gentle with the fruits and vegetables.  They're looking for part-time work, so they fit, but not school leavers looking for full-time employment.  On the other hand, right now we have 24 employees who are looking to transition to full-time work.  They can benefit from training grants (going back to school).  Because they are for the benefit of our employees in creating greater skills is attractive to the farm.  

Note: It may sound bad, but women are gentler, more careful and more attentive.  It's also true with our heavy equipment, fewer accidents and breakage when women are driving.  Right now our tractor operators are mostly male (40/60) but the new ones currently training are all female (out of our picking crew).  




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