Let me start with a bit of history and a disclaimer, as I have been more notable by my abscence than my presence these last few months. Up until 5 years ago, I was a systems engineer (telecomm systems) making quite good money, and telecommuting around the world. When I was laid off, with no warning, my better half and I decided to take the rest of our saving/retirement, and do 2 things:
- get the farm operating full time (we were in start up at the time)
and
- Start up a small business selling and installing wood furnaces. (to subsidize the farm)
At the time, we were a small part time farm, organic (uncertified) and concentrating on construction of a goat dairy/creamery.
Now here comes the disclaimer...This diary is not a plea for pity, nor a solicitation for funds. while much of the information in it is anecdotal, I can garauntee that it reflects the situation on the ground in massachusetts, and by extension, New England. In my avocation as an advocate for small farming and small scale sustainable energy systems in this area, I talk to many if not most of the small farmers in my county on an occasional basis. This probably explains my pessimism, as much as my personal situation.
Readers of my previous diarys are probably familar with the backstory from my intro, but I want to go into a bit more detail than usual in this diary, and I want to be clear, that although I am discussing my personal failures in some little detail, I don't intend a poor pitiful me narrative.
As denizens of MA are probably aware, there was recently approval of a small bailout (12 million) to dairy farmers in this state, following a year + of prices below the cost of production. From more libertarian elements here and elsewhere, I have heard that this is a bad situation, propping up people who couldn't make it in business. The past 6 months have given me a panoramic perspective on this that I would like to share with all of you.
About a year ago, we were just starting to come out of the start-up period with our furnace business, and adding solar and wind projects, when a disturbing trend made itself apparent: I kept hearing rumors that wood burning was going to be made illegal, due to the cancer risk presented by wood appliances. Having read the literature, and being intimately familar with such appliances, I discounted these rumors as the prattle of a fringe group....Big Mistake
The organization that was pushing this view turned out to have legs, and friends in high places. Failing in the rumor campaign at the state level, they pushed regionally (7 state) and LOCALLY. I ignored them as single issue wingnuts, and they effectively put me out of business just as the company was starting to be profitable....Second Big Mistake.
Like those dairy farmers above, all of my capital was and is tied up in my farm...all of the net profit from my biz went to the bank (mortgage) and the credit cards (equipment and operating expenses)....In hindsight, we were obviously "under-capitalized" for both ventures, but the yankee tradition is "make do with what you have" and we did. Also like those farmers above, we found ourselves in a bit of a bind...not enough money to make the farm what it should be, and not able to quit and start over due to debt.
Something interesting that I recently learned (the hard way)...fanny mae, and a host of other mortgage companies, are specifically blocked from granting mortgages to working farms. Working farms must apply to the authorized "farm credit agencies"....only they are not agencies, but cooperatives that sell bonds (which are backed by the USDA)...thus they return 1% to their farmer members (after they pay their mortgage (at 9% currently and increasing), and 9.6% to corporations that buy the bonds, and borrow money from them (at preferred rates, as they are good risks).
Currently we are trying to refinance with a local bank, at a better non-ARM rate, but theabove factors, and the failure of my business, in light of the anti-wood climate locally leaves me less than sanguine about our prospects.
That brings us to credit cards.
We made the mistake of taking a cash advance 5 years ago...I make no apology, it was a family loan for a health care expenditures. 2 months ago, we were late on a payment to one card, and now all our interest rates are at 32+%. I have negotiated with 2 companies, to spread out last months payment, but we will not even make that I fear. Currently, we have turned off electricity to the farm, which shut down the dairy.
What we are doing about everything....
In the short term:
1) selling off stock (animals): we are selling the majority of our animals at auction, reserving the best breeding stock, this will provide some income, and if we are allowed to do it slowly, we hope we won't saturate the local market and drive down the price for goats. This will also move us to a more sustainable number of animals.
2)Selling off a large portion of my book collection: I have been collecting since I was 5 years old, some of it might be worth something (sorry david, I only have you in paperback, they won't fetch much).
3)making some purchases of equipment (on credit cards), to enable us to finish 2 jobs to bring in a few thousand dollars profit.
In the long term, we have a number of prospects, which we hope to convince the bank, and the community development corporation to take into account. Unfortunately, none of these will bear any fruit for 6-9 months.
We are also trying to increase the number of chickens, as eggs are a clear profit center for us. As some folks here will attest, we produce the best eggs in the area. If we manage to raise enough money before mid May (they can't ship chickens during the summer months), we will buy more chickens, and 6 months from now, when they are producing eggs, we will be in a much better situation.
I am not sure how much longer I will have an internet connection, comcast being fairly persnickity about being paid, but I will undertake to write a diary a day until they sever the connection. Tomorrow will be a closer at those prospects I mentioned above.