From Heel to Hero
American cultural identity began to coalesce around the “settlement” of the west at the beginning of the 20th century. The country both celebrated and mourned the closing of the American frontier, the demise of the fearsome-yet-admirable noble savage, and the disappearing wildness of the empire’s most recent conquests. Where once cowboys and homesteaders were a White underclass that powerful Anglo-descended Whites were happy to send toward the setting sun into the unforgiving maw of brutal winters, hard sod, hail, tornadoes, and Indigenous people determined to protect their children; the dawn of the 20th century saw that underclass elevated as exemplars of American toughness and grit, rewarded with full membership in the spectrum of Whiteness. Meanwhile the nation grappled with a new kind of people-problem: emancipated slaves who were exercising their newfound freedom in unexpected and distasteful ways, and a host of dispossessed Indigenous people for whom no one ever made a plan.
In the years immediately following emancipation, former slaves capitalized on their numerical parity with Whites to avail themselves of representative democracy. They entered the ranks of elected government after the Civil War at rates that haven’t been seen since. Whites responded to this with a campaign of organized, state-sponsored terror. Black Codes, both on and off the legal books, replicated and codified the conditions of slavery that hadn’t been made explicitly illegal by the Constitution, while the Ku Klux Klan and police forces (refitted from old slave patrols) enforced both these codes and their own capricious notions of the racial contract by the gun, the torch, and the noose.
As Blacks were being terrorized at their homes, farms, churches, the ballot box, and every other conceivable place from Reconstruction onward, the U.S. government embarked on a parallel quest to destroy the remains of Indigenous cultures. Klan, police, and Black Codes on the African American side were matched with boarding schools, forced adoptions, removal, allotments and Termination policy on the Indian side. Each of the foregoing is complex and horrifying enough to be the subject of their own books, but suffice it to say this: the American identity that emerged at the close of the continental conquest — attached to farmers, ranchers, and its other foot soldiers — did so against a backdrop of White American individuals and institutions waging a war of subjugation against Indigenous and Black people. This is a period in history where the cowboy becomes a cultural icon instead of a cultural pariah, and the country’s collective heart moves westward as the more settled, eastern parts of the country grow increasingly urban and dystopic in the face of the rapacious wealth-building of the Gilded Age.
Simultaneously, the exploding populations out west were forming states and sending representatives and Senators to the U.S. Capitol, breathing life into a titanically powerful political bloc that dominates national electoral politics to this day, wielding extraordinarily disproportional representation in the legislatures, the White House and, as a consequence, in the Federal Courts. This power would become more concentrated with time as rural America depopulated throughout the 20th century in a pas de deux of mechanization and racial violence, a subject we’ll cover in some detail later. For those that survived the sodbusting free-for-all of the Homesteading period, their descendants would enjoy a vaunted, protected status afforded them by the hard, awful, racist, bloody reality of the “taming of the west” being plastered over with a Marlboro Man and wholesome images of nuclear families gambling everything on grit, determination, hard work, and a promise of 160 acres of someone else’s home. It was America’s first big grab at false nostalgia, and it wouldn’t be the last.
Millionaires with Messaging
What is an American farmer? What are the characteristics and personality we associate with them? You might call them hardworking, the Salt of the Earth, beset on all sides by the government, regulators, the grain elevator, and the aggregator. Unseen and unappreciated by a public that takes the fruit of their arduous toil for granted. Collecting only the tiniest fraction of the food dollar, seeing no change in their incomes even as the price of steaks soar at the grocery store. Struggling with unappreciative heirs who want no part of preserving the family legacy and would abandon a half-dozen generations of blood, sweat, and tears for the siren call of cosmopolitan lifestyles. The American farmer is the last redoubt of true American Spirit.
Even as we condescend them as simple, unsophisticated folk from flyover country, we hold for them a kind of nefarious reverence: the Noble Hayseed to the Indian’s Noble Savage, a piece of American lore fading into the setting sun as they are overtaken by the unstoppable march of progress — in this case that progress being “corporate” farms, robotics, and the securitization of farmland. The farmer, that tamer of the wilderness and all things within, the conqueror of all parts that became America, is himself to be conquered in a merciless, martial thrust of karma. We mourn his passing, but pass he must. And so ever do we pity him, taking him at his word that he feeds an uncaring world from a den of suicidal poverty, rewarding him with Farm-Aid concerts and a cornucopia of welfare programs.
We pity him as he bemoans his condition in television interviews and documentaries, flanked by a $70,000 pull tractor and a half-dozen trail horses, waxing Jeffersonian at the liquidity crisis incurred from the purchase of a flailing family estate and cost of maintaining equine stables and tack. For what better respite exists from the manifold difficulties of driving air-conditioned tractors and combines than the everyman pursuits of trail riding and barrel racing? Yes, we pity him still, because farming is America’s founding raison d’être and the justification for her conquest. To impugn the farmer is to impugn ourselves, to make war on the national character that, for the most part, has been celebrated by Americans of all backgrounds and political leanings. If we don’t believe the farmer’s lie, then what indeed is there left to believe? And let me assure you, dear reader, there are few lies bigger than the myth of the ‘poor’ farmer.
On the whole, farmers are far wealthier than the average American. They are quick to retort that most of this wealth is relatively illiquid, tied up in land and equipment and similar hard assets, but there are a few problems with this excuse. First, most wealth is illiquid. Wealthy people prefer it that way because the closer your wealth is to cash, the more prone it is to being taxed. Google’s billionaire co-founders Larry Page and Sergey Brin take salaries of $1 per month only because they’re required to by law, and otherwise prefer to keep the bulk of their assets growing as tax-free as possible; those assets are mostly in the form of stock which becomes taxable-as-hell the minute it’s sold. Wealthy people pay themselves as little as they can manage, and millionaire family farmers claiming to be cash-poor are simply following the first rule in the wealth protection handbook.
But then there’s the other thing: cash-poor as they claim to be, farmer incomes are well above the national median. That may seem odd given the oft-told story that more than half of U.S. farms report annual losses. This is a complicated knot to untie, and doing so requires an understanding that millionaires — which many, many farmers either are or nearly are — treat money and finances very differently than the rest of us. When you’re not rich, your economic imperative is to maximize your income because your income is the basis of your finances. This isn’t the case for rich people with lots of assets. When you’re rich, your primary goal is to maximize the value of your assets while keeping as much of those assets shielded from taxation as possible which, interestingly and almost paradoxically, means earning and spending as little (of your own) money as possible. If you’ve ever known a millionaire and wondered why they can seem so damn cheap, this is why.
In college, I had a business professor who gave a personal finance lecture that was so popular, alums all over the country would come back to campus every year to hear it. In that lecture he encouraged people to form a “consulting” business upon graduating from college and use it for buying absolutely everything that could even remotely be considered a business expense — from printer ink to cell phone bills, utilities, insurance, cars, and even houses. The IRS standards around this are shockingly thin; you just have to demonstrate that the business is pursuing profit “in good faith” and be able to provide evidence that you do in fact have personal expenses that are separate from your businesses expenses; a token effort must be demonstrated that you’re not just living your life through an LLC. To that end, in a prescient nod to the increasingly popular notion of platonic marriages, he recommended getting hitched as soon as possible to combine incomes and housing, paying for bare essentials like food, clothing, etc. out of pocket to make the IRS happy in the highly unlikely event of an audit, devoting the rest to maxing out tax-advantaged savings like IRAs and 401Ks, and dumping the rest into long-held index funds and real estate. That last part was the start of a wild lesson; he told us our goal should be to derive most of our income from passive sources not because it’s good to be lazy, but because while our country taxes the hell out of labor and profit, but the IRS goes out of its way not to tax capital.
Farmers behave in a very similar fashion, the key difference being that they have much better PR than typical millionaires. We’re ready to break out the guillotines if a telecom exec complains about their cash being tied up in assets under siege by the IRS; when farmers do it, we donate to their benefit concerts.
Being a Farmer
To be fair, not all farmers are the same, and the USDA has official classifications for farmers based on their income and primary occupation. It’s instructive about farming and the way farmers derive value from their farms to understand the difference, then, between Residence Farms, Intermediate Farms, and Commercial Farms:
- Residence Farms are those with less than $350,000 annual gross farm revenue and where the principal operator has a non-farm primary occupation. This is, for example, the person who farms grain on an average-sized holding of 500 acres or so, mostly able to handle the farm on weekends from the cab of a tractor and working in town as a cop or gym teacher or whatever during the week for spending money, health insurance, and maybe even a pension.
- The Intermediate Farm is that with $350,000 or less in farm revenue, but its primary operator does not have an off-farm primary occupation. This could mean one of two things — this farmer is more of a hustler, working more on direct marketing and value addition that makes it possible to earn a living with such low gross revenues. Or, more likely, this is a farmer who, like the Resident Farmer, rides a tractor on weekends, but unlike the Residence Farmer, is probably relying on the income and health insurance of a spouse, while possibly also collecting unemployment.
- Commercial Farms are those grossing over $350,000 a year regardless of the primary occupation of the operator. These are supposed to be the big dogs that operate as actual businesses, farms big enough to run thousands of acres, farms where the notion of an “operator” starts to seem a little silly.
Reading this, it may seem like these classifications represent some kind of career progression — you start as a Residence farmer and move up from Intermediate to Commercial. But they’re really more like buckets that most farmers fall into by happenstance, determined by what land they inherited or how much, what kind of farming they happen to do (usually based on what an ancestor did and the equipment they inherited), what they’re qualified to do off the farm, etc. If you know farmers, talk to them about their lives, you’ll find that most have little interest in progressing from Residence farms to Intermediate or Commercial ones, and moves in the other direction usually stem from someone making a bad bet — like leveraging assets to chase falling prices, which is incredibly common in farming and whose folly is best represented by the dairy industry. But by and large, people die in the bucket they’re born in, and they prefer it that way. Most of these farmers are the wealthy beneficiaries of a land and farm inheritance, and the object is to keep that wealth intact with as little effort and risk as possible. There are several ways to do this, and I’ll describe them as best I can without putting you to sleep, which I will do by asking you to participate in an exercise where you imagine yourself as the nth-generation scion of some old White farming family.
Imagine that, after decades of working under your dad on the family’s three hundred fifty acres, you’re finally being handed the reins when dear old dad begrudgingly decides to retire. This is a small family operation grossing around $200,000 a year, which means it’s not going to provide you with a living income. That kind of living from the farm would have to come from running many, many more acres, or you’d have to do some diversifying, perhaps raising cattle for the sale barn or cutting hay. You’re not keen on doing the really profitable stuff like growing produce or chickens or pigs — direct marking is kind of a four-letter word in farm country. These kinds of high-labor, high-profitability “mortgage lifter” enterprises are the province of immigrants consigned to truck farming, or second sons looking to make a mercenary living on the land in the absence of a full inheritance. You — John Deere trucker hat aside — are a member of America’s landed elite, and there are certain things nobility does not do.
In your neck of the corn belt, land is valued at around $7,000 per acre, which means that even your below-average-sized holding is worth a cool $2.5 million. Dad took out some loans to upgrade the planting and harvesting equipment to the tune of a half million, and yanked another half million to renovate the house and send you and your siblings to the local college for degrees in agronomy. But on the whole, you’re sitting on well over a million dollars in free and clear equity. Your worst case financial scenario is one where you’re not able to generate the cash to cover your debt service, in which case you can liquidate the farm. It’s not ideal to cash out the family legacy to walk away a millionaire, but such is the nature of a golden parachute: shame is the cost of deploying it for farmers and Fortune 500 executives alike.
Here’s the good news, though: land tends to appreciate at a rate higher than mortgage interest. Your land increased in values anywhere from 3–6% last year, adding between $75–150K to the sunny side of your balance sheet — more than enough to cover the cost of your debt service — without you having to lift a finger. This appreciation isn’t the same as income, but it’s still wealth. You can liquidate parts of it or borrow against it if you need the cash so bad. Or, you can just sit there and watch the appreciation compound year after year. All you have to do is earn enough money to cover your living expenses, and do whatever you can to avoid taxes. Lucky for you, you are asset rich and cash poor, and tax policy at every level is designed to make this as easy as possible for folks like you.
It’s really unlikely that, as a commodity farmer on so few acres, you’re working the farm full time. With all the mechanization there just isn’t that much work to do.
You’re very busy for a few weekends during plantings and harvests, but this only happens a half-dozen times a year for a few days at a time. The options for what you do with the rest of your time are pretty straightforward. Most people in your position work full time jobs in town, which is a great way to cover your living expenses and get health insurance. These living expenses only include a portion of your mortgage, though, because the interest and even a good part of the principal payments can be counted against farm income. This is a neat trick; half of all farms report annual losses, but buried within those losses are things like mortgage payments on personal residences. You get to hide your farm’s profits in your own house, and then the net loss from the farm flows through to your off-farm income. Lose just the right amount of money on the farm and you can completely offset your off-farm income and make it non-taxable while your “farm expenses” simply vanish into your steadily appreciating real estate portfolio. You can also pull this stunt if you’re not working off-farm at all, as long as you’re “involved” in the farm’s operations, leaving your health insurance and disposable income to a working spouse who, filing jointly, can also avail themselves of taxable income reductions from the farm’s so-called losses.
When It’s Personal and Not Business
This is the peculiar nature of conventional farming which, in many ways, is anything but a business. There is no real motivation to make a profit, and in many ways there’s a disincentive from making one. You don’t have a board of directors to please, investors and stockholders to pay dividends to, or partners to compensate with a share of the bottom line. You’re really just accountable to your own estate, and your job here is to maximize the value of your assets. Almost paradoxically, that is often best accomplished by declaring as little profit as possible, redirecting it into tax shelters to declare a loss instead. Contrast this with corporations whose biggest asset is often their own publicly traded stock whose value rises and falls with the company’s earnings potential, encouraging profitability and — in a very limited sense — public accountability. As much as the sustainable agriculture movement likes to demonize the ‘corporatizing’ of farming, there’s a strong argument to be made that if family farms were actually run more like traditional businesses, they would be far more accountable, responsible for their own fortunes or failure, and responsive to the needs of both consumers and the environment — because when you’re farming for the actual consumer market, destroying natural resources is bad business.
Of course, all of the above is what happens when things go well with a savvy farm operator or estate manager running things. It can absolutely go another way, especially when you’ve inherited a farm operation that’s over-leveraged or doesn’t enjoy quite the same protections as grains, beans, and other key agricultural staples. And we’re talking, of course, about the dumpster fire that is U.S. dairy.
Dairy is a stunning example of what happens when farming’s general refusal to conduct itself as a business meets a failure to enjoy the socialistic supports that allow it to thrive otherwise. Dairy farmers in America have been in trouble for quite some time now, and for a fairly simple reason: farmers responded to crashing prices by producing more milk to make up the difference, which flies in the face of common sense but is nevertheless a widespread practice in agriculture. In many countries outside the U.S., supply is managed in a top-down fashion with quotas. Farmers (and only a certain number of them) receive a permit to produce and sell only so much in order to prevent too much movement in prices either down or up and stabilize both farmers’ livelihoods and the availability of food. In the United States, supply isn’t managed this way. Our system is a relic of the Cold War that encourages overproduction by design in order to keep the input costs of agribusiness low, which is the underlying basis for our food being incredibly cheap and, pandemics notwithstanding, abundant. That system, however, doesn’t cover all farmers, dairy farmers included.
Milk processors, having nowhere to move this massive glut of fluid milk, simply began canceling contracts and purchase agreements en masse, which had a particularly devastating effect in places where those processors held regional monopolies and the farmers had no one else to sell to. When grain and bean farmers face this situation, they’ll often throw their harvest into a silo to wait and pray for higher prices later. But dairy farmers can’t really do that; cows have to be milked every single day and the product can only hang out on the farm for a day or two. Milk has to move off the farm pretty much immediately and the farmers rely on the processors to show up with the trucks and take the stuff away. The result of this is what you hear about in the news: farm bankruptcies, farmer suicides (even though, in reality, most of these suicides are among farmworkers and not farmowners, a topic we’ll discuss in detail later), industry consolidation, and breathless demand from dairy farmers that the industry needs to change.
Those demands usually include two items — first, price supports for dairy similar to those in place for corn, soybeans, etc., and second, breaking up milk processors so farmers will have more than one place to sell their product. Both of these demands are emblematic of the degree to which farming is predicated on a kind of toxic sense of entitlement that lies at the heart of what’s wrong with America’s food culture: farmers feel it’s their prerogative to produce whatever they want to produce, regardless of whether or not anyone actually wants it. In some cases, as with the production of staples, that entitlement is backed by the federal government in the form of everything from price supports to trade policy to regulatory mandates around fuels like ethanol. In others, like U.S. dairy, those supports are largely absent and, instead of taking actions to ensure their operations are more viable as businesses (like cooperating and integrating themselves), producers are largely insisting on the same type of government intervention that allows corn producers to plant fencerow to fencerow without a care in the world for how much of their product their end customers actually need. They want to be paid to produce under the remarkable assumption that the public owes them a living just because they’re farmers.
Sticking with conventional agriculture a little longer, more entitlement is to be found in programs funded by the government to encourage meat consumption, like the checkoff programs. You may be shocked to discover that each sale of live cattle or pigs is attached to a legal requirement that a small amount of money be paid to a national marketing organization for the beef and pork industries. The fee is mandatory, regardless of how many animals are involved in the transaction or the size of your farm or even if you’re the one doing your own marketing. This law is effectively a tax on cattle ranchers and swineherds to support grain farmers who grow the animals’ feed, and the meatpacking industry that gets a giant, free, legally-mandated marketing machine for its products. Outside of the U.S. military, it’s hard to imagine an industry’s advertising budget being codified into law, but that’s precisely what happens with meat in this country. It’s ultimately there to manipulate the market for the benefit of agribusiness, enabling farmers and ranchers to keep doing what they’re doing.
The grow-what-I-damn-well-please ethic doesn’t stop at conventional farming. Even in the supposedly sustainable, market-oriented space of the farm-to-table movement, farmers are adopting mechanisms to crowbar the market around what they want to produce instead of pursuing product-market fit. Much of the movement’s sales pitch lies in blaming and shaming consumers — particularly the poor — for dietary habits that don’t support small farmers’ bottom lines. The American food system is broadly the result of millionaire farmers and billion-dollar agribusiness achieving regulatory capture; farm-to-table insists that consumers address this institutional monster with their personal food choices, and accuses those who fail to do so of complicity even when their options are limited by structural factors like income inequality and racism.
Few instruments embody this attitude better than the CSA (community supported agriculture), a marketing device that takes many forms but usually requires a customer to purchase a season’s worth of products up front, receiving it in weekly allotments. With some exceptions, the farmer has most of the say in what goes in that allotment (marketed as an education in seasonality and the limitations of eating in a regional foodshed), and the customer is not protected in the event the farmer is unable to deliver (marketed as an ‘opportunity’ for consumers to share in the risks of farming). All of this, of course, is in place so that the farmer can grow what they please and avoid sophisticated solutions to meeting consumer demand. The result is that, decades after Alice Waters and company launched the movement into the popular consciousness, it remains outsold four hundred dollars to one at the grocery store and its economic engine runs as much on farmers running their mouths (conferences, consulting, design courses, books, speaking circuits, and tourism) as it does on actually feeding people.
Farm-to-table has become the de facto marketing arm of sustainable agriculture, and nearly all of that marketing centers around an idea that it’s the responsibility of the consumer to make things as easy as possible for the farmer while, simultaneously, making things as difficult as possible for themselves. The consumer, in order to participate in the supposed future of sustainable food, is required to embark on an expensive and inconvenient journey of discovery, eating only what’s available locally and in season, paying for an entire harvest up front and figuring out what to do with the five pounds of radishes in a single CSA box, enduring the weather, crowds, and awful timing of farmers markets or, more ideally and even less conveniently, a visit to the farm itself. All of this is then piled on top of prices that make even some upper-middle class people float from lighter wallets. The messaging is so good and the nostalgic reverence for the farmer so deep, that this idea is accepted by most people as a good one.
To be sure, none of these things are necessarily bad in and of themselves, as people could stand to have some basic agro-environmental sense just as a foundational item of a complete education. But the notion that a popular revolution in food and agriculture can be realized by throwing up as many obstacles and friction points as necessary to make the farmer’s life easy… is crazy. Sustainable, restorative agriculture cannot do its work of protecting land and water and communities if its yield is accessible only to privileged, “conscious” eaters. That can only happen when the yield is made accessible to everyone; when people are able to participate casually, unconsciously, and by default, as they do presently with the yield of extractive, conventional agriculture. As long as this is not the case, and as long as the farm-to-table movement insists on borrowing the worst parts of conventional agriculture by prioritizing the convenience of its practitioners above all else, then consumer habits will always drift back toward traditional agribusiness under the gravity of billions of dollars spent giving consumers exactly what they want which, above all else, is convenience. This push and pull conflict with farmers setting their desires at odds with their own market is the foundation of a fatally flawed strategy that dooms sustainable agriculture to permanent irrelevance unless it makes a dramatic change. Unfortunately, this industry is just as encumbered by its incumbent class as its more conventional counterpart, with old ideas and old fortunes and stale ways of doing things obstructing progress not by accident, but by design. And this whole design leans on messaging that poses the farmer as sacred and noble, a century’s worth of nostalgic mythologizing having done its work rather well.