Letter to Sonny - Creating a Farm Business
Below is a letter I wrote to a Hawaiian homesteader several years ago. He was interested in farming, but for some reason he had a difficult time understanding what he needed to do in order to create a farm business, and also wasn’t realistic about his goals. He was looking for solutions such as setting up a farm to teach others how to farm without having a basic knowledge of farming, or networking with others to get his farm started when he didn’t have any production.
I really had to write everything down to help him understand without dampening his enthusiasm and spirit. I think it may help anyone who’s interested in farming. There are many concepts to grasp, including a few doses of reality along the way. Here it is:
I write this to you to help you focus and see the steps you need to take in order to create a farm business. In life, you need to crawl before you can walk. There’s so much to know, and you cannot ‘skip grades’; you have to start at kindergarten. You have to be diligent in learning all you can by studying, and you have to go at it with both eyes open. Most farmers in Hawaii farm part-time because they cannot earn enough money on their farm, and they also want to have medical coverage for their family. Parttime farming is also a growing trend in the nation.
There are certain attributes that must be in place in order to be successful in farming. One is the willingness and motivation to farm and to overcome any adversity. We cannot supply this because it comes from deep within you. If you’re easily discouraged, farming is not for you. This stick-to-it-ness is important especially when things don’t go the way you expected. When the going gets rough, the tough get going. In farming, the real test when you fall down is how fast you get up and move forward.
Break It Down
Farming is hard work and there’s a sequence to things. One thing I’ve learned is I try to focus on a few things at a time because if I try to see the whole picture, it becomes so overwhelming. Although it’s important to know the big picture, if you break down tasks and responsibilities into bite-sized pieces, it’s easier to comprehend and also to execute. When you complete the first task, you can go on to the next one, and before you know it, you just completed a major task. For me, I have to write it down and I have a sequence of things I need to get done.
After motivation, I stress knowledge because this is my background. Tutu Mary Pukui stressed that there are many schools in which to learn in. What this means is knowledge is all around you, from kupuna to even your kids, to friends, books, internet, mentors, neighboring farmers, even your land, and more. My homestead teaches me a lot. It’s like a bank account; you gotta put in before you can take out. There’s so much to know and you need to seek out this knowledge, because it will not always fall in your lap.
Knowledge comes in many forms and you can never have too much of it. I’m constantly seeking new knowledge, and it can be found in many places. Choosing a crop is a big decision, and you can only choose a crop if you have knowledge about farming and about this crop, and have assessed this crop in detail. This is an important early step. If I’m interested in a crop, I try to learn everything I can about it, and even grow it in my garden to learn more.
The more you know about the crop and how to grow it, the better able you are to succeed in producing the crop. We never try to tell people what crop to grow. The real choice lies with you, and you must spend the time, the due diligence, to research and investigate the crop you’re interested in, compiling as much information as possible to make an informed decision. You have to answer a lot of questions, and the more questions you answer the better informed your ultimate decision will be, and the better chance of being successful at farming.
More than Money
A big mistake many make is they think that money is their big limiting factor, and they go after loans and grants only to end up in the hole because they don’t have a plan and they don’t have a grounded knowledge of farming. There’s a high rate of failure in agriculture so you have to go at it with both eyes open. To succeed in farming, you have to be willing to do the same thing over and over again until you can do it in your sleep. Don’t get me wrong, the money part is important and in farming, you’re always making economic decisions, but you have to seek the knowledge first. Learning by doing is the best way, with books and classes helping you to better understand what you’re doing. And you have to enjoy what you do. In encourage many people to grow a garden or a small nursery area. From this, you can find some crops that people nearby might want to grow.
Farming is a Business
Agriculture is highly competitive, and is a business. It needs to be run as one. You’re constantly looking at ways to cut costs and increase profits. The business part can only come when you know each step in growing the crop. Otherwise, it’s going to be impossible to develop a business plan. You have to fill in every blank and you have to know what number goes in there. When someone is interested in growing a crop, I tell them to grow a row of the crop and collect all the information you can in order to come up with a plan such as how many pounds can a plant produce, pest problems, days to harvest, and what is the grade out.
The Crop and the Market
What are the limiting factors to this crop? Does it only fruit once a year? What if the weather is bad when the flowers come out? Will it wipe out your crop until next year? What is the market price? If the weather is good, it’s good for all the other growers of this crop in your area. If this is the case, there may be too much of this crop on the market at the same time, and the price will drop. Also, do you enjoy growing that crop and will it make you money? This is the million dollar question.
How much money will it produce? If I sell my carrots for 50 cents a pound, how many pounds do I have to harvest in order to gross $50,000 (Answer: 100,000 pounds of Grade A carrots). Out of the gross, how much is the net? Maybe just 30 to 40% or $30,000 to $40,000. What does the market want and how much do they want. Sometimes it’s easier to push the pencil, than to push the hoe only to find you actually lost money on the crop.
The big question you have to ask yourself is ‘where is my market?’ Your market could be right in the neighborhood next to you. What do they want? What can you sell them every week? Maybe its nursery plants, or vegetable starters, or luau leaf, or fresh vegetables, or fresh lettuce. Once people eat fresh vegetables, many become hooked.
I like to find out what the market wants and how many pounds they can use each week, and work backwards from there. In this way, I’ll know how much I need to plant in order to reach my market goal. Competitive advantage means “what advantages do I have over other farmers on other islands or even in my community that will allow me to succeed and be competitive in the marketplace?”
You may have special knowledge, or special weather, or a unique production system, or free water, or a large family, or a special variety of a crop. Some advantages are apparent now, and some will become apparent in the future. When I farmed on Oahu, we were able to deliver on demand whenever the stores wanted our crop, and we planted a large enough amount so we controlled the prices.
You cannot do this on Molokai if you’re selling your crop on Oahu. Again, you may have to discover all your advantages because they may not be apparent right now. You may have a market right in front of your eyes.
How Solid is Your Plan?
In my job, I try to play the devil’s advocate and question everything about the crop when farmers come to see me. In other words, I try to discourage them in order to see how strong their plan or strategy really is. If you have a good plan, it should be able to weather all inquiries and questioning. By doing this, you make your plan stronger if you can handle criticism.
All kinds of things can go wrong, and a good farmer will be aware of what these are and have a solution in their back pocket. Anticipating these challenges is what separates one who’s trying to figure out what’s going on to one who knows what’s going on and does something about it. This is the knowledge and experience part, and you can never have enough of this. I believe if you put enough positive energy into something, something positive will come out of it.
In farming, we have a law called the Law of the Minimum and this applies to all kinds of things. In plant nutrition, all you have to be is short in one nutrient and it will affect how big your plants grow. What you lack in knowledge will be your limiting factor. You constantly want to strengthen your weaknesses and not run away from them, whether it’s weeding or bookkeeping or marketing. There are two important concepts in agriculture called the art and the science of agriculture. The science is the knowledge part, and the art is what you do with this knowledge. The art part involves innovation and new ideas, but starts with the knowledge.
Once you have the knowledge, you can start to tweak it with new ideas. Because labor is the biggest cost, innovation that cuts labor costs is a critical area. It may be an easier way to plant or harvest, or a new value-added product or even innovative packaging. This is where your ingenuity comes in; your creative juices go to work to create a product so unique that everyone wonders why they didn’t come up with that one.
One Step at a Time
There are a lot of things that need to be done on your land right now that doesn’t take a lot of money but a lot of sweat. There’s a method to the madness and part of it getting to know your land and building a bond with it. After a while, it becomes a part of you. You have to get out there and do it, but you also have to constantly assess what you’re doing all the time, and ideas will come to you.
Visit other farms and see what they’re doing. Don’t try to spend a lot of money right now. I farmed for over 20 years without a tractor because I designed it so I didn’t have to spend a lot of money on equipment. But just because you have land doesn’t mean you can and will succeed in farming. This is just one piece of the puzzle, and there are many more pieces.
What are some of the other pieces of the puzzle that need to be in place? You need to realize that you don’t have all the answers, and you may have to find them out yourself. The key is to be realistic in your expectations, and continue to grow in knowledge so you can make informed decisions. We all have different skills and gifts, and in farming, we try to capitalize on them. And remember, one step at a time. In order to harvest, you have to plant first.
My advice to you is to grow a garden and expand the garden a little at a time. Expand by planting in phases, in rows or in blocks. When you have surplus food from your garden, make a little garden stand in front of your yard. You can start selling once a week, maybe Saturday morning, then expand to twice a week, maybe Wednesday afternoon, 5-6 pm as you harvest more and cannot hold until Saturday. By talking to your customers, they will tell you what they want to buy, and you can expand on these crops. You may not be able to grow one crop all year-long due to insect or disease build-up, but you might be able to move the crop around to other areas of your homestead. Soon you will have an established clientele coming to you each week, and all you have to do is grow the crops they want. A garden stand is allowed on Hawaiian Hawaiian Home Lands if you’re selling your own produce. Start small and grow your market, and make sure you have people willing to buy what you grow.
University of Hawaii College of Tropical Agriculture and Human Resources
Cooperative Extension Service, Molokai