Russ Roberts

Lisa Turner on Organic Farming

EconTalk Episode with Lisa Turner
Hosted by Russ Roberts
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Lisa Turner of Laughing Stock Farm talks with EconTalk host Russ Roberts about life as a small organic farmer. She describes her working day, the challenges of farming, the role of the U.S. Department of Agriculture in her life and what some job applicants who want to work on her farm need to understand about business.

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0:33Intro. [Recording date: December 11, 2012.] Russ: Guest today is Lisa Turner of Laughing Stock Farm, an organic farm just outside of Freeport, Maine. Our topic for today is organic farming, and we'll probably get in a little bit about the buy local movement toward the end. Tell us about your farm. Guest: We have been doing this for 16 years. It started very, very small. It was just me home with the kids. It was probably about a quarter acre initially, just to see if it would work. At this point we grow about 10 acres of vegetables. Because we are organic we also keep some of the land in cover crops; we build the soil and rotate through that. So that's about another 5 acres. There's about an acre of peonies that we sell as cut flowers and then 6 greenhouses that we grow in year round. And so in the summer there are tomatoes and peppers, and in the winter there are mesclun greens and arugula that we heat with used cooking oil--we heat the greenhouses with used cooking oil. So, that's what we do. And then we sell it--we do a CSA, which is Community Supported Agriculture is what it stands for. So people buy a share ahead of time and then they come to the farm and get whatever is ready that week, for a period of time. And we also sell to local restaurants. Russ: And how does your business divide up between the community part and the restaurant part? Guest: It's about half and half. Russ: So, my wife is a big fan of CSA. She is a member of a local growing group here in Maryland. And it doesn't provide all of our produce. It's just something she likes to do. She likes to go pick it out. One of the things--for people who are not members of that kind of program--explain how it works. So, I show up--do I come to your farm? Guest: You can come to the farm. We are like 25 minutes from Portland, which is the biggest city in Maine. And, it's kind of funny, because if you live in Freeport you very well might commute to Portland every day, but if you live in Portland it seems like forever to come out to Freeport. So for them we take an entire setup that would look like a stand at a farmer's market and set that all up so they can get their stuff in Portland. And you have your choice of where you go. Usually people come and there's like a bag made up with whatever was ready this week and you take your bag. We do it a little different where we give people choices. So you come in and there's the board written up and it says, okay, there were a lot of green beans this week so you have to take a pound of green beans, and then pick 10 out of the following choices: a pound of tomatoes, a pound of broccoli, a quarter pound of mesclun greens, a head of lettuce, whatever. And you can double up on things, unless we are short on them--it'll say: One pick only. So, you're coming back every single week to the same farm and you are getting the bag of vegetables. That may or may not be everything that you want. Like the amount of vegetables that people eat is amazingly variable. We've got families of four where two families split a share, and we've got families of four where they buy two shares. For their own family. Russ: So, here, what's strange about it--and of course what's interesting about it is it's different every week, or certainly every month as new things come into season. There's a certain novelty about that. But what's strange is that if something comes into season that we love in our family, whatever that might be--at our farm, the one my wife goes to--and I have been to it at least once--you can't have more. You can't say: I really like these; I want 10 of this kind of tomatoes or 10 of this kind of apples. Or: I want to eat green beans for three nights because these are so delicious. Guest: Right. And that's a problem. Or: Here's your bag; you have to take radishes. And what if you don't like radishes. But there's your radishes. Russ: So you need a post-pickup-- Guest: I think everybody has some vegetables that they are not as fond of as others even if you like almost all of them. Russ: Sure. Guest: So that's why we've gone to this choice system. Because then you are also planning it for the average person. And not a single one of your members is that average person. So everyone's a little bit disappointed as well as being a little happy every week. We went to this choice system in hopes that it would make more people happy more of the time. Russ: But is it a cultural thing? Why not just do this strange thing we do in the rest of the economy called: Put a price on it? Say: Green beans are so much this week and apples are so much this week, and tomatoes. Why do you think the CSA movement has this--socialist--aspect to it, this sort of: We're all sharing in the crop? There's something inspiring and nice about that, that we all get a little bit of everything. Even the stuff we don't like. But it's interesting that you don't just sell it. Guest: So, there's different ways to sell local produce. If I went to a farmer's market I would be simply selling it. We do also encourage people to just come to the pickup time as a farmstand and buy it. But some people really want to have that longer term connection. And if you are going to give me money ahead of time, you are getting more in your share than what I charge at the farm stand. And then we also have pick-your-own flowers for the CSA members so there are about 10 or 12 weeks in the summer that the annual flowers are ready and then can just go out and pick whatever they want of those. So, some of the concept is that you are getting more for your money. Straight up more volume of product. Russ: Sure. You are giving up some choice but you get more in total. Guest: Right. And then if you want to feel that you've got that connection with people; some people are more committed to that by having paid the money up front. I mean, it's nice for me because my business is a startup business every single year. That's how a vegetable farm works. So, then I have capital, money in the beginning that people pay in. So, it certainly works better for me. And a lot of people understand that, and they want to have a farm in their community.
7:35Russ: Now, talk about the restaurant side. Roughly how many different restaurants do you supply to and what's the pattern of their purchases, and how is that different from your individual sales? Guest: It's more in the summer. It's about a dozen places in the summer. It's less in the winter, because there are places that are on the coast of Maine so there's places that close in the winter. And yeah, their buying pattern is really different. Because if you go to a restaurant you are probably going to have a salad and then whatever entrée you have. Whereas people don't necessarily have salad at home every night. So there's a whole lot more salad-type greens that are sold to the restaurants than go out in the CSA share. And there are some different products, like broccoli rabe I can sell to the restaurants. Some of the CSA people like it, but they are not as familiar with it. Colored carrots, like the carrots that come in shades from like white through orange to purple. The CSA people, some of them will like it for a novelty but not all of them. The heirloom tomatoes--the flavors are so amazing I kind of push them on the CSA people. But the restaurants know that they like those. There are a lot more--they want the caché of the different-looking stuff, and plain old people kind of want the same thing that they've always eaten. Russ: Sure. Do you ever have trouble supplying those restaurants with what they want? Do they ever come to you and you just don't have the quality that particular week? Guest: Or the quantity? Oh, yeah, absolutely. That happens every year, because it rained too much and you couldn't plant in time, or it rained too much and it ruined something, or more people ordered something than you were expecting. I'll go talk to them all in January and try and get an idea if anything has changed much, what they are expecting, for next year. But it's really variable and it just comes from what we make. And we have to sell everything that we make, to make money at this. We can't grow excess and throw it out. So, they just know that happens. It's part of the tacit agreement, is that I will try and grow what you want; you're not going to guarantee that you are going to buy it from me and I'm not going to guarantee that I have it. Russ: Yeah, sure. Now, on the individual side, to pick a very different produce experience, we recently tried Peapod, which is a home-delivery service which a large chain operates. And of course, one of the issues there is--when I go to the store myself--and this is a luxury of course in America, but in the old days you got a bag of oranges; you either bought a bag or you didn't. Or you got a bushel of apples; you either took it or you didn't. Now, most of us in the grocery store, we pick out the apples and the oranges that we like--the way they look, the way they feel. We touch them. Sometimes we are sampling them--they are offered free of charge in the grocery store. And we pick the ones we like. Of course, sometimes they don't taste as good when we get home. There's a lot of, literally, individual choice of which piece of produce I take. But when I go to Peapod, this delivery service, I order 2 pounds of apples--I might get some I don't like so much, I wouldn't have picked out. And they have to make a decision: This guy's already paid for it. Obviously, they want me to be happy, they want me to order again. So, do they give me the best ones, the okay ones? Do they slip in a few okay ones? Guest: What they think is the best is not what you think is the best. Russ: Exactly. So, in your case, or let's talk about the other CSA--what's that stand for again? Guest: Community Supported Agriculture. Russ: So, if I go to one of these places where I get a bag, I show up; they put in a nice medley of stuff. Some radishes--I might not like radishes--but they put in radishes, tomatoes, lettuce, fruit, etc. And I get home and I go: Ew, these aren't so good. And as you just said, sometimes weather, bad luck, you get a crop that's not quite up to your standards, and you are disappointed in it. What do you do then? Normally a store would maybe lower its price. But you are not in that same kind of market. How does that work? Do you ever throw stuff away because you just don't think it's worth selling? Guest: Oh, yeah. You definitely throw stuff out that's not worth selling. Like when I train the help every year, it's like there's stuff you take in your house as a gardener and use, but we want to give--the difference between that and what someone would give money for--what we want the CSA people to see, and the restaurants, obviously, is stuff that people would give money for. Russ: Yeah. Guest: So, like 2009 was a phenomenally rainy year, early on. And there was not very much stuff for several weeks when normally we would have stuff. So, what we did was we gave less then and we made it up later on. And we had a poor restaurant year because we had to pull food out of the restaurant side to give to the CSA people, because they'd already paid for. Russ: Right. And the restaurants went and bought it somewhere else. Guest: Yes.
13:25Russ: Let's talk about the organic aspect of your business. What does that mean formally and how does it work? Guest: About 12 years ago or so, I like to say the Federal government took the word 'organic' by eminent domain. You are not allowed to use the word 'organic' to describe your product--if you sell under 5000 a year total, you can; or if you are over 5000 you have to certify through the National Organic Program. That's a subset of the U.S. Department of Agriculture (USDA), and they accredit various agencies around the country to be the certifier. So, I have to fill out paperwork. Fundamentally it's about using naturally-derived materials. So, not petroleum-based fertilizers, pesticides, whatever. People say: You don't fertilize. Absolutely I fertilize. You'd better hope I fertilize because the crops aren't going to continue to come year after year if I am not adding some kind of nutrition into the soil. Or: Oh, you don't spray. We do spray. We do get pests, and we spray for them. We spray things that are biological in nature, hopefully less harmful; although they are not all that harmful. Personally, we choose not to spray those things because we have these 20-year old kids here all summer long that have to touch the stuff, have to pick it. And I have a lot of concern for them. But the organic is based on derivations. And it gets into incredible minutiae--like everything. And you fill out your paperwork and mail it in, and they say: Yes, this is okay. Or you can't do that. And then someone comes in and inspects you to make sure that everything on the paperwork is what the farm looks like, and then you are certified and you can use the word 'organic' in your advertising. So, from USDA's point of view, it's a marketing program. Russ: Why do you say that? What do you mean? Guest: Because I can market my stuff as organic whereas someone else who has not gone through the program cannot market as organic. So from USDA's perspective, it's about marketing. Russ: Gotcha. Guest: It's kind of interesting because your average organic farmer does not see it as marketing. They see it as a way of life. Russ: Right. And are you in that group? Guest: I know enough about the chemicals that I have no interest in using them, primarily for worker safety as much as anything else. My kids grew up working on the farm. We hand-harvest everything. Somebody touches every single thing that comes off the farm. And the thought of that having been my kids or somebody else's kids--no. I'm not there. Russ: Just a naive question--you said that if something's petroleum based, it's not going to be organic. Isn't petroleum a natural product? Guest: Well, in organic chemistry, yes; it's Hs and Os. But that's not what they mean. Russ: Okay. Guest: So, non-synthetic. Russ: So, what does that rule out? Guest: I don't know. If you look things up in the dictionary sometimes they don't mean the same as what people in the industry think they mean. Russ: I hear you. So, if I'm a non-organic farm, small or large, what am I using that you are not using? Typically. Is there a typical thing? Guest: Okay. So, on fertility. We're growing something called 'green manure' crops. So, I will grow field tea[?] or oats or winter rye or something and then turn it back into the soil and--like legumes, like peas will take nitrogen out of the air and fix it into the soil. So, I'm gaining nitrogen that way. I'm building the soil in doing that. So the roots go down and they pull things out from depth; they'll pull phosphorous out of well below where the tomato might go. So, I'm getting more fertility that way. Or, I'm adding things that are--like you've probably spread lime on your lawn, which is crushed limestone. There's rock phosphate and colloidal soft phosphate and all these other powders that have higher levels of phosphorous or potassium or whatever. Or there's stuff like bloodmeal, bonemeal, feathermeal, alfalfa meal, things like that that I would add for fertility. If I were a conventional farmer I would be adding like urea fertilizer that's made from--well, again, they are taking the nitrogen out of the air but they are using natural gas to get there. So, the fertility is different. I'm also adding a lot of stuff that is probably not measured, whereas they are only adding a certain amount of Nitrogen, Phosphorous, and Potash (Potassium) [NPK], maybe some boron and copper and certain things. I'm adding a biological mix of things. Then when it comes to pesticides--well, I go to conferences where there'll be both conventional and organic farmers and they'll be talks. And there's something you can learn from everybody. So you can go to one that a conventional farmer gives, and you may learn a lot of interesting stuff about varieties or cultural practices or whatever. And then they get into what they spray. And I've been astonished at the things that are considered to be diseases that I didn't even know was a disease. Like, oh, those lettuce plants that I see like 5 out of 1000 that look a certain way--that's a disease that somebody else sprays for. So there's an incredible amount of different sprays. The goal of organic is that you are growing healthy crops that then don't get these diseases. There's a lot of plant diseases that are based on nutrient deficiencies. So, you want to get the full nutrient picture in there, then you'll have healthy plants that don't get the disease problem. Russ: And do you get those 5 out of 1000 and just throw them away? Guest: Yeah. Five out of a thousand. Like, I can't imagine spending the time paying for it, let alone paying for a chemical to do it. But I think that because I've added this broad spectrum mix of fertility, I may be getting plants that are less likely to have that. And I'm also not only growing lettuce. So, I'm moving things around. Different things eat different nutrients, and I think having them mixed also helps what we do to just use less pesticides.
21:00Russ: So, in my grocery, my big, non-community supported grocery, chain grocery. Guest: Regular grocery. Russ: My Harris Teeter or Giant Supermarket. They sell both, organic and non-organic. And as you said, it's a marketing device for them. I think a lot of people who shop there who buy organic assume it's "healthier." I don't know if that's true. I don't know if we know or can know if it's true. But there's been a claim in recent years that the demand for organic has gotten so large that the large farms have basically taken away some of the reality of the organic--they've found ways to keep the organic label but maybe not live up to the promise of it. Do you think that's true? Is that something that you know about or see? Guest: I know that if I buy organic carrots in my local grocery store or local health food store that have come from a distance, from a large agricultural state in the West, for example, they don't have the flavor that my carrots do. I think that some of the flavors are developed from having the broad spectrum of nutrients, the things that you don't know that it needs that make it have the variation. And I think that I have probably evolved to like these things that taste better, probably because they are better for me. If you take out, like sugar and some other refined stuff, I think that I probably like a sweeter carrot because it's probably better for me. And there's science to the sweetness, too; it's not just subjective taste. So, yeah, I don't think it's as good as what I can do. I don't think you can manage 10,000 acres of carrots--I don't know that they do that much--or a 1000 acres of carrots as effectively as I can manage my 10 acres of mixed vegetables. The taste certainly would say that they don't. Russ: And this is an issue that I think, of price and quality, assuming you are right, that most customers could tell the difference between your locally-grown, small batch vegetables versus a large factory farm coming from a long way away. And I don't know how much of the taste difference is travel plus the nutrient issue you are talking about. It's probably a little bit of both. Guest: Probably. Russ: But if we want to scale, the jargon is to scale, if we want to scale organic farming or local farming to feed the American people we're going to have to face that tradeoff. Because it would be a lot more expensive if everybody wanted to eat their vegetables in the way that you raise them. I assume. Guest: We try and keep the prices reasonable. I mean, you can buy a head of lettuce from me all summer for the same price that you can go to a large grocery store and buy a head of conventional lettuce. For my husband and I it is definitely a focus that people should be able to afford it. But not everybody is going to choose to afford it anyway. When I first started I felt guilty that I couldn't take this to everyone. And then I thought--you know, if everybody gave up cable TV they could easily afford to buy my vegetables for the summer. They would have money to spare. They are not going to give up cable TV. Russ: No, they are not. Guest: They are going to make a choice of what is valuable to them. So, I don't have to be poor to provide--I'm not selling the lowest possible cost thing. I'm selling something of more value, and some people will find value in it and pay for it, and some people won't find value. And some people just won't have the money. And I'm not going to fix that.
25:09Russ: Let's talk about your day. What do you do? What's life like there on the farm? Guest: So, summer day. Probably get up around 5 a.m.; check the weather, see how the prediction has changed since the last time I checked, which was when I went to bed. And it will have changed. Because everything changes depending--whatever you do for the day is going to be different depending on what the weather is. We'll have a plan for the week; my husband and I will talk about what we thought we were going to get done yesterday that didn't get done. Because it never all gets done. What absolutely has to get done today, and then how the people that we have and the tractors and the truck--we actually use three other properties in our town besides ours. So we've got to move the tractor around to different locations and haul stuff here and there. So, what the logistics are of everything. And that can take a while. And then: Well, when are we going to get this done if we do these things today? So, there's a lot of just discussing how we're going to get the work done. Most of the help shows up at 7. We started using apprentices this year, because we finally were able to purchase housing. So they live across the street from us. And they come over at 7. When the year starts, I'm giving them a lot of training. Later in the year I can say: Here, these are the things you need to go work on and this is our picture of where we are headed. And then we've got a couple of summer kids that usually show up around 8. And they'll work with the apprentices--kind of the apprentices tell them what to do. The first thing you've got to do is harvest stuff, because the vegetables suck up water overnight; it's cooler; they get more--it's called 'turgor pressure'--it's more rigidity to like a lettuce leaf first thing in the morning than there would be if it's hot out. By the time you get to 1 o'clock in the afternoon, if you cut that it's going to look wilty just from the moment you cut it. So you've got to get everything harvest early. Washed; we've got a big walk-in cooler; we get the vegetables in so we can cool it and that helps preserve some of the quality. And that will take us easily till noon, most days. So, you are just getting stuff ready to go. Two days a week we go deliver to the restaurants, so there's a big push to get those orders packed; and somebody will go deliver. Three weekdays plus Saturday you could come pick your farm share up here, so somebody's got to get that ready. There's two days that we transport stuff to the offsite locations in Portland, so somebody has to get that ready. So people are kind of peeling off to go do these things. And then in the afternoon we try and get some project done like we're going to transplant the lettuce today, or we've got to weed a bed of carrots; and whoever isn't doing the sales portion of it is working on doing that. We get done around 5 or 5:30 p.m. and there's not a whole lot of energy left. Most of the help doesn't work on the weekend. They rotate having to do the farmstand on a Saturday. And then Ralph and I do whatever didn't get done, plus paperwork, plus planning, over the weekend. And I try really hard not to work at least one weekend day. Because you work 7 days, it means you are going to work 12 days. Russ: Yeah. I know about that. So, what do you like about it? What's fun? Guest: I like being outside. It's definitely like I can be outside every single day. People who work in offices: Oh, wow, it's going to be nice this weekend. I don't have any pressure about a nice day, because there's going to be another nice day soon that I'll be outside. So, I really love that. I like working for myself. The thought of going to work for someone else at this point--I mean it's not like you can do whatever you want. Obviously you have to keep the clients happy. And you have to keep the help happy. And all that. But it's definitely a different dynamic than having a job. And I like the puzzle of it. Like, it's not a business where you are going to make a lot of money. But the puzzle is: How do I do this and make enough money to have a reasonable life? What worked, what didn't, what can we do more of because it made money? What do we need to do less of and it's still okay? How do we change things? What kind of equipment can we use? Or the ways we are dealing with the help that we could change. And you get to re-do it every year. There's a restart. That's both good and bad, because you've got to retrain people but if you didn't like how it worked last year, you can start over again really easily. Russ: So, what's a crisis? What goes wrong that's a nightmare? Guest: Well, when the power goes out in the winter. That's unfortunate because we are growing greens. And now the greenhouse is like two sheets of plastic, basically the difference between 35 degrees inside and 10 below outside. So, the power goes out; we've got a generator but you've got to hook the tractor up. The tractor is like the engine for the generator and then the generator just makes electricity. So, you've got to go out in the middle of the night and hook up the tractor and there's no light and it's cold. That's a crisis. I dunno. Things breaking--the tractor breaking--is a crisis. And it just has to get done. My husband ends up getting saddled with most of the crises because he fixes things. So, that's more of a burden on him. I've got to figure out how to deal with what we have to get done without that. Our barn burned down in 2003. That's a crisis that kind of went on for a while. Russ: What did you do? Guest: Well, lucky for me I did the same thing I did every day, which is go out and the product is in the field--go cut it and pack it. But I did it on autopilot. He had to figure out how to fix it. It was a lot harder for him. And, we built a new barn. Not with the insurance company--because the fine print is never what you expect. Nobody ever reads their insurance policy. And even if you did, I don't think you'd understand it. That was 2003. And we still do this. So, it's okay. Russ: Do you ever have crises with your workers that occur that put you in a bind? Where you've got to scramble? Guest: Well, we talk about that when they start. Everybody has stuff that they need a day off for. You've got doctor's appointments, you've got a cousin's wedding you've got to go to. So, as soon as you know you have to do something, put it on the calendar so we know and we can work around it. And other people will have to work maybe a little longer if you are taking a day off, because we don't have a huge crew. But they'll do that for you, but having a doctor's appointment that's scheduled should not be a crisis. We should have known that was coming. So we have to explain what a crisis really is. It's a lot better with the help living across the street because now we don't have car problems. They just walk across the street. We try not to have crises with the workers. Sometimes it happens but we try really hard to frame that to minimize it. Russ: By the way, through the magic of Google Maps I can see the entrance to your farm online. Which is pretty cool. I can see your sign in the distance, down the way a little bit. Kind of a cool thing. It's an amazing world we live in.
34:31Russ: Let's talk about--first, I have a quick question. How is it possible to grow stuff in the winter in greenhouses in Maine? How is that economically feasible? That seems nuts. But it works. Guest: It does. We started back when oil cost 85 cents a gallon. Remember that? Russ: Yup. Guest: We are not growing tomatoes. Tomatoes you have to keep really warm. They are like a Mediterranean crop by descent. So you've got to heat it to like 70 degrees to get tomatoes. We're growing mustard family things, mostly, that are happier at cold temperatures. So they'll grow--if it's 35 degrees at night you are keeping the quality; and then, it's a greenhouse, so on a sunny day it gets warm in there. By the beginning of March you've got to open the sides during the day because it gets so hot. So they're kind of working toward what the average daily temperature is. So, we're not heating that much. So, we started, the oil was like 85 cents a gallon, and my husband is a mechanical engineer by training and has always had this--looking for the holy grail of free energy. And found a company that made a boiler--it was a boiler that basically was supposed to burn used automotive oil, and they reconfigured it to burn used cooking oil. We actually tried the first one--we got a grant from the Maine Department of Agriculture to demonstrate new technology that was not currently being used in Maine. And that paid for about 40% of the project. We put in this boiler, and the first one didn't work. It burned like 99% of the oil but that meant that for every hundred gallons that you burn, you've got a gallon of black goo in the bottom of the boiler. So we published this on our website, because we had to write a report to the Maine Department of Agriculture about what this was. And we said this boiler doesn't work. Which really made that company angry with us; but it was true. And we had this other company show up, just drove into the dooryard one day and like: Oh, we saw that that one didn't work; we've got one and we'd like you to try it. And I was like: Don't even talk to me; go talk to my husband; I don't want to hear about this. So they actually gave us the boiler. Theirs had been used for automotive oil, and they were reconfiguring it to what would be cooking oil. They gave us the boiler; they gave us the metal-[?] chimney, which was a really expensive chimney; and said: Here, you are doing the field trials for us. And it worked great. So, we collect used cooking oil from the restaurants in Freeport. All you have to do is like heat it up to separate the water out of it. You don't have to filter it or anything. And then that's most of the energy that we use. You do have to have backup of everything because it's not quite as reliable as number 2 or gas. And that worked great. Until recently. Russ: What happened? Guest: Well, the Federal government in its infinite wisdom decided to help renewable energy. They give a couple of different kinds of credits. There's some--there's like a lender's credit; if you are mixing a renewable with a fossil fuel you can get a credit; or they sell renewable energy credits, there's like a market. And if you are making like millions of gallons of biodiesel or something, which we don't make biodiesel, we just burn the oil straight. But if you are using millions of gallons of this stuff then a broker will sell your renewable energy credits to like an oil company who buys it as offset for their fossil fuel usage. But we're so small that we don't really meet--and it's been just for transportation fuels, not for stationary heating. Which is stunning, that transportation fuel is somehow different. Like you are still using fossil fuels. That's the goal. It just boggles the mind. So, they get these credits and we don't. So that's driven the price of used cooking oil up. When we started, which was like 2002, 2003, all the restaurants paid--there was like a monthly fee, like your trash pickup fee--to get rid of the used cooking oil. So we went in and we said: We'll just take it for free. So, you win, we win; everybody gets a little bit out of this. Well, at this point the rendering companies are paying $1.50 a gallon for used cooking oil from restaurants. So now, it's still better than what heating oil is today--$3.49 a gallon or something. So $1.50 is still better than that, and we don't actually have to do that much work to pick it up and heat it and get it to separate. So it's still worth it. But it was a whole lot better before the government decided to help. Russ: Now, are your prices going to have to go up for your winter produce? Guest: Yeah. Yep, they are. It's a lot of money. The big greenhouse is about 7500 square feet. And there's two sheets of plastic between you and 10 below. The burners burn like 3 gallons an hour when it's cold. So you blow through a lot of stuff. We don't have the money; we can't cover that. So, yeah, it went up a little this year. Russ: These greenhouses--you say 2 sheets of plastic. They're not glass? Guest: They're not glass. Russ: Okay, cool. Interesting.
41:09Russ: Let's talk a little bit more about the government. There's the U.S. Department of Agriculture; and then there's Maine, which has its own state agricultural department. Let's start with the feds. How do they affect your life? You just gave one example, but that's an indirect example. The Fed government did something over here and it ended up, not surprisingly, having a consequence over there; and that's not uncommon. But just in the farm business generally. They certify organic; that's one thing they do. Guest: They certify organic. So, there's different departments within USDA. One of them is NRCS, the Natural Resource Conservation Service. And that used to be the Soil Conservation Service, and it kind of started during or after the Dust Bowl and the goal was to get farmers to use practices that would retain the soil should that ever happen again. The Dust Bowl I think was a very weird climate time; there wasn't the usual amount of rainfall; things changed, but the way they had managed things had been fine until that happened. So it made sense at the time. Now it's come to where--they want us to do mulching, which is fine; and contra-plowing, which is fine. So, they'll pay you for these practices. You like sign a contract and you agree that I'll do this and this and this. And their push is: Well, it's stuff you are doing anyway; we're just going to give you money for stuff you are doing anyway. And it's really weird. Oh, we want to get you some money, we want to get you some money. The language that they use is really odd. Because I don't really want to have to get a government check every year to do what I do anyway. Russ: Strange idea. Guest: But I think some of it is, USDA gives so much money to the big commodity growers and the dairy people that this is to keep everybody happy; if everybody gets a little bit of the payola then we'll all shut up. That's harsh, but that's my analysis of it. Russ: I hear ya. Guest: We actually tried to participate in that and it was so badly managed that we gave up on it. So, that's one of the things they do. If we were bigger we could have crop insurance. Like, all the guys in the Midwest that had such a dry year, they all had crop insurance. So, they are going to be able to have enough money to come back and farm next year. Well, it doesn't work for us because we have such a wide variety of crops and the way that they calculate the payments--like I can't ever imagine it working for us. That's a program that just is kind of dysfunctional from my point of view. We could get loans from them but I don't think we need to do that. That's probably a fairly reasonable thing. Then they've got the Rural Development, another subset. So, they come around and they try to get you to do energy projects. Like I said, my husband's a mechanical engineer; I'm a civil engineer. When it comes to that kind of somebody telling you: Oh, you need to have solar panels, or heat pumps, or whatever--like we can kind of smell the snake oil that gets sold. They'll send somebody with no technical background, that's going to tell us what we should do. I mean, farms are not wealthy businesses, by and large. It's not a good place to come and convince somebody to do some energy project that isn't going to save them money or at least have them break even. So, how is that considered help? I don't do commodity farming; I don't know if some of these protections are more important there. It probably is, because it's more risky because you are only growing one thing. But at our scale I think we'd be better off without some of the help. Russ: Of course, if you didn't have that insurance you probably wouldn't grow just one thing. Guest: Yeah. It kind of leads you into: well, I have the safety. And commodities is weird: if soy is going for a lot of money because of biodiesel then everybody's going to grow soy; and then the price will drop next year. It's very much what's good for an individual is bad when the whole group does it. I don't really know how you manage around that as a society. Russ: Well, I think if we left it alone a little bit, they'd probably figure it out. I just looked up the Department of Agriculture's budget. It's a modest $145 billion annual expenditure. Guest: So, that doesn't even count in the budget. Russ: Well, even I think that's real money. But you're right. In a certain dimension, if we got rid of it, it would only close the Federal deficit this year by roughly 10, 15%. So you could argue it's just pocket change. But I suspect some of the things it does are not particularly helpful, either. As you point out. Some of them maybe help some people, not others. Guest: It's the picking winners and losers? Russ: What? Guest: Picking winners and losers. I've heard you talk about that a lot, and these things absolutely do that. One of the programs, like, one person in each county gets a free greenhouse. Like how do you pick that? Russ: What?! Guest: Like how do you pick one farm in each county who gets to have a free greenhouse? And how is that fair to everybody else in the state who didn't get the free greenhouse? It's just bizarre. Russ: Did you apply for a free greenhouse? Guest: No, because we're not the kind of farm that they like. See, we've been doing it for 16 years, so we're not new farmers, and they definitely want to help the young, new farmers more. Which, like okay, we've had more time to build capital and have more stuff, so maybe that's fair. I don't know. And they definitely prefer the land trust farms. And that's in our county; and I'm not sure it's the same in every county. Russ: What is a land trust farm? Guest: The land trusts--they've got them by town, by region, by watershed, by Maine coast, whatever. They want to purchase the development rights to an undeveloped property. So, like you can still have your house there but you can't develop the land; you can't sell the land to become house lots, or industry, or anything else. The land is going to stay the way the land is. So the land trust will buy development rights. Sometimes they'll outright buy the entire property and the development rights on it. And then, like a lot of them around here, they like to have a farm. Like: Oh, this is the last real farm in our town and we don't want to lose this so we're going to buy it, and we'll get some new young farmer in to farm it. So, they're the ones that get the money from NRCS in our county. Although I don't know that that's true everywhere. So, we don't even bother to try for that, because you can see who gets them. And it's the same people. Some people have gotten more than one of them. Even just people that don't own their land. It's kind of a weird thing. So then free competition--we're competing against someone who, generally they are given really favorable rents, like far, far below what the market value of the land would be. If they need to fix the barn, they have a fundraiser, because the 501(c)(3) arm of this owns the barn and will fix the barn. We had to pay the money to fix the barn--that the insurance didn't cover--out of selling more heads of lettuce. They have a fundraiser and say: Could you give us the money? Some people gave us some money, but not like a fundraiser. Russ: But the difference is the people who gave you money gave you a dollar and you got a dollar. The people who gave the land trust farm barn project a dollar, they had to give only $.70, $.80 because I and other American taxpayers made up the difference through the deductibility of that charitable contribution. So that made it easier for them to find friends and to get money. Guest: It is a little bizarre that we don't tax charitable contributions, because it's kind of like deciding what money is okay without having voted on it. Russ: Yeah, it's a strange thing. Guest: It is a strange thing. Russ: Most of it's okay. But it's one of my--of all the things the government does, having charity be deductible is not the worst. That's faint praise. But that's the best I can do.
51:34Russ: Let's talk about your employees, because when we set up this interview you told me some interesting things about their attitudes. There's a certain romance about working on an organic farm. But having talked to you now for almost an hour, it's clear you are a capitalist-- Guest: Yes, I am. Russ: You've got to cover your costs. You are not running a charity--like the case we were just talking about. You've got to sell enough heads of lettuce to cover the cost of that tractor and the cooking oil and all the other things that you do; and your employees. But sometimes, you pointed out to me, you get some different attitudes. Guest: Yes. So we hire some high school kids. And they are lovely people. But usually it's one of their first jobs, like maybe they've mowed the lawn for their neighbor or maybe they did some babysitting. But by and large we're their first job. So, everything else that's happened in their life has happened for their benefit. They've gone to summer camp--that was for their benefit. They've gone to school--that was for their benefit. We as parents certainly do everything we can to benefit our children. And then they come to me and--yeah, there are a lot of programs that go on in the summer. And that's not what this is. This is: You are going to work, and at the end of the week I'm going to give you money; and I expect that because you are here, I will make more money. And that's a concept that I've had to explain to them. And it comes in really hard. And I have to say: Why would I have you here if I wasn't going to end up with more money? Why on earth would I have you show up every day? And they kind of start to get that this should be a mutually beneficial arrangement, not just that I shouldn't come out even because I think of--capitalism as me making money for the aggravation of having you here. And then we get the college kids; they've kind of gotten that kind of concept a little better. But then I'll say: What do you want to do when you are done with college? And they'll say: Oh, I want to work for a non-profit. And that one makes me angry. First, it's like, well, non-profit, that could be a hospital, that could be a--like you haven't thought about this any more--that could be a land trust, it could be anything. 'Non-profit' is huge. You don't have any more direction than that you want to work for a non-profit? But also, they are telling me that profit is bad. So, I say: Well, look around at all this stuff you see, the tractors, the greenhouses, the walk-in cooler--like all this stuff. Ralph and I could have taken that money and even if we put it in the bank in a savings account we'd have earned like a percent or something, even now. But we've done this, and we're risking that--it may not work out; we may not make any money from this; we may not get back the money we put in. Don't we deserve a little more than what we could get in a bank by doing something safe? And they say: Oh, well yeah, of course you do. And I say: Well, that's profit. And that's all that profit is. And: Ohhhh. And then the light dawns. But they come with no idea about how capitalism works, even though capitalism is the economic system of our country. Russ: More or less. Guest: More or less. Russ: Some places less. Guest: We claim that it is. Russ: Some places less, some places more. That story--talking about the student who wants to work for "non-profit," I think in the back of their mind is the idea: Because I'll be helping people. As if what you are doing isn't. That's the even harsher way to think about it. Guest: Or that profit is bad. And then I go on to: Profit isn't bad; greed is bad. And there are greedy non-profits and there are greedy individuals and greedy corporations, and there are also all of those that aren't. And greed is bad. I'm totally with you on that. You can't have everything. Somebody else has to have some of it. But it's not about whether it's profit or not profit. Russ: Are you going to do this for the rest of your life? Guest: Probably. I think I'm too far in to get out of it now. Russ: Assuming you can keep that profit going, anyway. Guest: Right. Russ: And you told me off-air you have kids who are college age. Will any of them, do you think, come into your business? Guest: I don't know. I think the oldest is pretty much never going to have anything to do with it. My son, the middle one, really enjoys the work; I don't think that he sees how he would fit in. If your kids come to work for you, you are not going to treat them like you did when they were 12 working for you, if they come when they are in their 20s and they want to be in the business. You are going to develop and area of expertise that they can take and feel ownership in. My son's 22; and then my youngest is 19--she just went to college this year. And she likes it, too. I don't think they can see how they could fit into that. I think they want to go be their own people for a while. Though, they may or may not. The oldest definitely not; the other two, probably as not much likelihood as a coin toss landing my way, but they might. Russ: Do you want them to? Guest: I want them to be happy. I just don't care. If they don't want to do this, they just shouldn't do it. My dad was a math teacher; I didn't want to do that. Russ: Well, that makes sense. So, the other thought I had about your employees and their attitudes is that there's a big movement, as you may know, to encourage high schools to teach economics. And there's all kinds of curricular developments. Guest: That hasn't gotten here yet. Russ: Yeah, well, I'm going to suggest otherwise. Maybe it is there, because the way economics is taught often in high school is to prepare people for the Advanced Placement (AP) exam in Economics. Which is a test--at least half of it is a test on whether you can master Keynesian economics. My son is taking an AP Economics class right now, and I was looking at some of the practice AP exams with him. And one of them basically, one of the questions basically was: If you could increase exports holding everything else constant, is that good or bad? It turns out it's great--you get richer and society prospers. And so the lesson is our goal should be to increase exports. Which is a bizarre thing, when you think about it. How would you do that and hold everything else constant? What policy would increase exports without doing other things that you haven't analyzed? And I'm looking at this question, and I'm assuming I'm getting it wrong. I mean, there's no way the answer could be what it looks like. So I call up a friend of mine who teaches AP Economics, and he says: No, that's the right answer. He says, I tell my students that that answer is wrong but they have to learn it for the exam. Guest: Oh, my God. Russ: By the way, that's not unusual. I think this is a common phenomenon among many AP Economics teachers who love economics. They teach to the test because that's their job, and then they explain to the students a richer model of how to think about economic activity in the world. But what strikes me about listening to you, which I think is quite spectacular, is that instead of taking that AP Economics class, they should come work for you for the summer. Or the fall. And they'd learn real economics. And I don't mean what people often think about--finance and how to run a business--but how the system works. That you've got to cover your costs or you go out of business and then nobody has a job. At least that's the way it's supposed to work in a capitalist system. Guest: They talk about sustainable agriculture; and we say the first rule of sustainability is I've got to make enough money this year to do it again next year, or game over. And nobody wants to hear that part of 'sustainable.' They want to hear that we're using the natural products and we're doing the direct sales and that kind of thing, but they don't really like--I don't know--America is to some degree uncomfortable thinking about money. Russ: You need--they want to hear about the windmill. They want to hear that that's what 'sustainable' is. Guest: Exactly. Russ: Windmill. Yeah. There's some romance there. What you're doing has a certain romance about it. And I think those employees or would-be employees sometimes are trying to tap into that. There's something nice about it, but it would be great if they understood who pays the bill. Guest: And a lot of them come out at the end of the summer still liking it and they'll come back next year. But they come back with a clearer vision of what it is that we're doing. Russ: Well, they're older and wiser. Guest: And also that it's boring to sit and weed carrots all afternoon. So, there's a lot of reality that shows up here. Russ: Yeah. But they come back older and wiser because they've learned something about economics, indirectly, at least. Guest: Right. Yep.

COMMENTS (20 to date)

This was my favorite EconTalk podcast of all time. But, then I'm a small business guy too, so I would say that.

Keep in mind that there are millions of people in the same boat as Lisa and her family, though most of us aren't even as successful as she. I'm thinking of her observation that it was better before the government decided to help.

Also, I just happen to be reading Tender Comrades: A Backstory of the Hollywood Blacklist, which is one uninterrupted whine from people who were earning six figure incomes (in 1940 dollars) and think they were victims of capitalism. Lisa's riff at the end about how she has to explain to her workers how she struggles to cover her costs to stay in business is a good antidote for that attitude.

Thanks for the nice Christmas present, Russ.

l0b0t writes:
"This was my favorite EconTalk podcast of all time."
Seconded, thanks for the great podcast. The dramatic shift in the market for the sludge from my deep fryers has been astounding to behold.

This episode brought back bitter memories of my dad's travails making alcohol for motor-fuel on his ranch in the mid-1970s. Procuring an experimental distiller permit from the BATF was a complicated nightmare. Even though one was required to immediately denature the alcohol the moment it left the still and the alcohol was not allowed off the property, one was still required to post a surety bond (cash only) in the amount of the taxes one would be levied IF one was distilling potable alcohol for sale. It was Byzantine to the point that it was not worth the effort required to comply with the law so we became motor-fuel moonshiners.

If I may suggest a guest in a similar vein; I would love to hear Russ interview Baylen Linnekin, executive director of Keep Food Legal.

Todd Mora writes:

This is a great podcast. I love the fact that she farms and is a capitalist who shuns handouts. She is the kind of woman who made this country great!

Reardon writes:

Great podcast! Lisa's comments about some of the silly government policies and programs reminded me of the government's proposals earlier this year to decertify FFA and 4-H. It demonstrated a complete lack of understanding of how local farming communities operate. Fortunately the proposals were withdrawn. Funny side note: the White House honored 4-H and FFA members at a ceremony a couple of months ago.

Rutger writes:

Enjoyed the podcast. I found the part on the first experience of high school kids with capitalism revealing. I also recognized the example of Russ on the exam questions. My daughter (16) has economics as a high school subject. Last year she had an assignment on the prisoners dilemma and the Nash equilibrium. The Nash equilibrium was described there as an equilibrium that results when the players of the game take the general interest into account and not there self-interest. This is completely wrong since the Nash equilibrium is defined in a non-cooperative game in which the players act purely in their own self-interest. The assignment was based on the film fragment in the film “A Beautiful Mind” (one blonde three brunettes scene), (http://www.youtube.com/watch?v=uAJDD1_Oexo), which also gets it completely wrong. So there we go: if even Hollywood can’t get it right, who can?

Vann W. Prime writes:

As a high school economics teacher, my students and I always jokingly refer to "profits" as if the word were a swear word, about kitten abuse, or a disgusting skin disease. The joke is that is how most politicians, bureaucrats, textbooks, and, especially, public school teachers pronounce the word.

Sadly, it's because that's how most of the latter view the role of profits in society. Far worse, it is how these entities are--whether intentionally or unintentionally--prejudicing children against the role of profits and profit-oriented institutions (and, for that matter, the market in general) in a free society. And, sadly, in most public school systems (as in mine), I am certain that this effect is quite intentional. The anti-market-bias, as Bryan Caplan calls it, is alive and well.

This is not self-congratulatory, but our school's economics program may well be the first time 100 students ever heard anything laudatory about the miracle that the market economy is.

As an interesting side-note, in my school system, American Government (generally taught in its mythical form) is a required subject. Economics is not. A public choice economist might have a field day with that fact...

Thank goodness for entrepreneurs like Ms. Turner not only for making all of our lives better through their creativity, energy, and ingenuity, but also for teaching children the vital role of economics, profits, and prices in the world--even on an organic farm!

(This is a slightly edited re=post from Cafe Hayek...)

Bill N in Vermont writes:

That was a great podcast. I'm an engineer and a CSA member and a economics-hobbyist. I did not think the topic would be interesting, but it was. Hats off to Laughing Stock farm and their intention to make money in spite of the government. Also, it is obvious Ms. Turner knows how to operate her business and her value proposition.

Keep up the great podcasting.

Bill N. in Vermont

Ken P writes:

Great podcast. It really bothers me when the government hurts competitors by helping individual companies.

Also, by subdsidizing various efforts in the name of sustainability, they actually thwart market mechanisms that determine if the approach is truly sustainable. Given enough subsidies, you can mask all kinds of inefficient energy usage.

Local produce is often more tasty. I think it has a little to do with picking early to ship, but also a lot to do with the varieties being grown. Tasty varieties don't typically ship well and don't make for large uniform crops.

I attempted a large scale vegetable growing operation with a buddy back in the 80s. He had 10 acres of bottom ground with nice topsoil and we were in the middle of a multi-year drought. We spent every spare hour when we weren't at work, tilling and planting and also used up lots of vacation time. Things were growing great despite little rain, as we irrigated out of a creek bed. Then we had a 6 inch rain in one night. The entire area was 3 ft under water and had become a part of a rapidly moving stream that was hundreds of yards wide. Suprisingly many of our plants were still there, but when you pulled up on their stems, you could tell we lost over 12 inches of topsoil. It's all funny now, but it was gut wrenching at the time. So much work down the tubes.

Yes, hats off to Laughing Stock Farms. Fighting uncertainty on so many fronts and making it through with a profitable business is pretty amazing!

Robert Kennedy writes:

I live in Maine and very aware of Land Trust farms. Local governments and other quasi government agencies buys the development rights but the land owner keeps the land and keep farming or whatever. they can pass to their children. They keep all rights to the land other than the ability to change it's use. The government or agency ends up paying a premium for those rights because there is no real market to determine the fair market value of those rights. And as Lisa says, they are also portrayed as the "last farm in town" or something similar. And after that, the land owner ends up getting various other perks that give them an advantage over others in the area that might compete with.

Peg Charpentier writes:

Having grown up on a large corn-producing farm, I really enjoyed this podcast. For one thing, it shattered some pre-conceptions I had about organic farmers, whom I had incorrectly stereotyped.
The podcast also reminded me of the potato chip podcast, equally enjoyable. Please do more interviews with people involved actual businesses. Very, very interesting.
Thanks!

marris writes:

Excellent podcast Russ! Learned a great deal I really like the mix of guests you guys bring on!

Mort Dubois writes:

Russ, I love these small business profiles. Keep 'em coming.

Farmer John writes:

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Alan Mead DDS writes:

Before listening to this podcast I was ready to dislike it. "Organic" farming is such a loaded term and I was ready to be combative about anything the guest said.

But she was awesome! I think I agreed with everything she said. Right down to the government's definition of "organic" and especially that the term has just become another marketing cliche.

Awesome job, Russ!

Raja writes:

in my opinion, the most interesting aspect of organic farming from an economics perspective is how the market has, ahem, organically responded to meet the demand for organically farmed foods without the need for a benevolent dictator. (or even the wife of one.) I find this is a great example for my liberty-skeptic friends who can't imagine a world without the iron fist... err... visible hand of govt agencies such as the FDA.

Glenn Donovan writes:

Great podcast as usual. I do like that Russ challenged the whole CSA thing. I live up in New Hampshire where CSA's are the way so many people buy local farm products. When she explains that CSA participation is about people who want to see local farms active in their communities, she's exactly right. Which is why I don't subscribe. Almost everyone I know who uses a CSA doesn't use all the veggies and throws some of them out. Pricse don't drop to clear out inventory, as in a normal market so instead the surplus get's thrown out. I would not be surprised to find out the as much as half of CSA distributed product is wasted. All in service to a fetishization of farming and organic magical thinking, lol. Interestingly another aspect is that that farmers markets don't have nearly the diverse supply I would expect and are much more expensive as they really don't want to sell you a few veggies, so the price it so drive you towards the CSA. In other words, it's an economic retardant, not a value add.

The entire motivation for this model is Progressive-Socialist dogma. Even my local county govt in Cheshire county NH claims that they have as part of their mission to support the locavore movement. What many of us in the libertarian movement don't want to face is that the Progressives are marching forward on every front to challenge capitalism and this is one of their political fronts.

Of course, at the end of the day, this is merely a fetish of uppper middle class and rich progressives. Anyone making 30k a year looks at the 100% or more higher price for "local organic" and buys a hothouse tomato instead. While this woman was grounded - probably because she's actually trying to make a good living farming, which is hard to do in any setting - when you get most such folks talking they see this movement as the tip of the spear in pushing back corporatism, capitalism, factory food, frankenfood, right wingers and people who don't wear hemp clothing.

Part of what's driving this is the romanticism of pastoralism - which is nothing new. Americans romanticize farming - unless they actually farm - and have been sold some gauzy view of agriculture as a lifestyle. The truth is that agrarian societies were much poorer than industrial societies. The notion of rolling back specialization and modern logistics in service to some folks who utterly want to ignore economics and impose their views on us is absurd. It should not be treated seriously by serious people. Of course, if you want to grow food and sell it to people, do so. If you want to buy organic produce, do so. But that's just another business, right?

listener writes:

Lisa Turner practices a rather one-sided Randianism. The utilitarian self-interest of her workers would be to earn as much money for themselves in return for as little effort as possible. They should seek to maximize their own profits, not Lisa Turners. One of these moments of crisis on the farm would be a good opportunity for them to threaten qutting and bargain for higher wages.

I suspect though that the "attitude" of the help is comparable to the that of her customers. Her customers put up with higher prices and uncertain und unpredictable delivery of goods in order to help her out, to support locavorism, to stick it to big agriculture, to nurture communitarianism, etc.

My hunch is that the teenagers and college students who want to work for her have some of the same motivations and didn't come to her farm because she offers the best market wages and working conditions they could get on the labor market.

listener writes:

@Glenn Donovan
How is "pushing back corporatism, capitalism, factory food, frankenfood, right wingers and people who don't wear hemp clothing" or "romanticism of pastoralism" in any way incompatible with the "libertarian movement" you claim to be a member of?

As long as there is no coercion there is nothing wrong with it from a libertarian perspective.

A true libertarian would attack the socialist and centrally planned public road and highway system that favors delocalization, subsidies for big agriculture and arguably even biotech patents. Those are bigger fish to fry.

Cathy writes:

Love all the comments about government "help" for the farm, and students learning about profit vs. greed.

Tom M writes:

Hi,
I just wanted to say that this is a great podcast episode/interview. Thank you Lisa and Russ. One of my favorites and I've listened to all of the preceding econ-talk interviews.

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