John and Russ Vollmer talk to RAFI’s Scott Marlow about their life on their farm, the risk of natural disasters, and how risk management affects the growth of local and organic food.
A North Carolina farmer tells his story
John Vollmer’s comments to the Sustainable Agriculture and Foods Systems Funders Conference June, 2009 I was born and grew up on a farm near Bunn, NC, and until the 1980’s the economic anchor for our farm was tobacco. So it was for my daddy and granddaddy all the way back to Washington Duke and the founding of the American Tobacco Company in Durham in 1881. For over 100 years tobacco has been the mainstay of small farms just like ours in NC, SC, GA, VA, TN, and KY.
Unhooking from the tobacco wagon
In the 1980’s, however, things were about to change. During this 80’s decade, while serving as the president of the NC Tobacco Growers Association, I had a light bulb moment. We U.S. tobacco growers were not going to win the public relations and political battle that we were engaged in. Regulations and restrictions were coming. Competition from Brazil was eroding our worldwide market share. Public opinion and medical science were on the side of anti-tobacco activists. If our small family farm was to survive past my generation, we had to change how our farm worked and functioned. We had to unhook from the tobacco wagon. Betty, my wife and business partner and I looked at many ideas. Our first new crop to grow was pumpkins. We offered school tours and sold pumpkins both retail and wholesale. Bear in mind we were still tobacco growers at heart and in practice. This was just a small step toward the change that we would have to make.
New crops, new customers
Pumpkins worked well for us and our business grew. It was also a fun crop. It brought people to our farm and they and we began to interact. This encouraged us to add fall vegetables to go with the pumpkins, and more people came. As tobacco regulation and competition from Brazil swept over us in the early 1990’s we were motivated to add strawberries and vegetables to our springtime crops. More people came to support this and we were encouraged. We learned how to grow these new crops and how to deal with people coming to our farm. By the late 90’s strawberries were the new economic mainstay for our farm. Further, we were beginning to embrace the strange idea of pro-biotic and sustainable production practices. It was an exciting time for us because all was new. We were living on the edge of change and we were making it happen on the Vollmer farm.
Making the leap to organic production
2000 was the first year we became certified organic producers of 2 acres of strawberries. Since then we have certified more acres and added more strawberries and vegetables, plus blueberries, blackberries and asparagus. Most of this is direct marketed at our own farm market, 210 member CSA and local farmers markets. Our son, Russ, his wife Mary and 3 kids live on the farm now with the idea that they will be the 4th and 5th generation to take the Vollmer farm forward. They now run the fall business, which includes school tours and family weekends. For the first time, this spring they are operating the retail market at the farm. Russ and Mary are the number 1 customers for Betty and John’s fruits and vegetables. This sounds like a success story, doesn’t it? And it truly is. But it has come about in the midst of a great deal of change, uncertainty, self-doubt and learning how we as a family can work together and still remain a family. Wow! We have been at it for 30 years.
No protection from the risks of natural disaster
Through these changes to a more specialty-crops type production system, we find that we are not adequately covered for the risks we face. With the tobacco, wheat and soybeans that we used to grow, there were mainstream crop insurance products to cover these risks, and they were affordable. We thought that the new AGR-Lite insurance product would be just the ticket to cover our risk, only to find out when we investigated the program that the premium was as much as our net profit might be in some years. AGR stands for Adjusted Gross Revenue regardless of the crop mix rather than insuring each individual crop. This is the type of coverage that specialty crop growers need. It just needs to be affordable. What we are left with to cover our risks is NAP. USDA is big on acronyms. NAP stands for Non-insured Assistance Program. NAP is bare bones, cheap coverage and we have it for all of our strawberry crop, but we are totally at risk on all of the rest of our crops. Using strawberries as an example, we have a gross income potential of $40,000 per acre on an acre of organic berries. NAP insurance would cover $5,000 per acre if we had a total disaster. Well, what about the other $35,000 per acre? Multiply this times 7 acres of strawberries, and it comes to $245,000 in uncovered risk. If we were to have a hailstorm that hit our 25 acres of diversified specialty crops, we would have to hock the farm. It would be over for us. Both Betty and I still carry a sizeable debt load. Now Russ and Mary are up to their necks in the investments they are making in farm infrastructure and getting ready to send 3 kids off to college. We absolutely could not add $250,000 or $300,000 of debt service and make it work.
What keeps the next generation off the farm
I have seen the effects of a hailstorm on my friends’ strawberry crop. I have had the first hand experience of a large pumpkin crop wiped out by 2 back-to-back hurricanes in 1999. Betty and I are still servicing the $100,000 debt that occurred from the crop losses that year. I am not afraid of debt. I don’t doubt my own ability and the next generation’s ability to use debt wisely to grow our business. I am, however, afraid of hailstorms and hurricanes. These natural disasters can way-lay the best business plan in the world.The lack of good risk management insurance products is what holds us back. It’s what keeps my son employed off the farm instead of working shoulder to shoulder learning what I know while I am still here to teach him. And, by the way, my son’s off-farm job is as a crop insurance salesman, so you know that if there were appropriate crop insurance products for our farm we would have found them. It’s what makes me reluctant to sign up in the new USDA EQIP program to convert conventional acreage to organic.
With expansion comes expansion in risks, and only a fool would do such a thing. I admit to being such a fool. But at the same time, I also believe that as the root ideas of sustainability reach into the minds and souls of our nation’s agricultural producers and leaders we will find solutions to these risk problems. Proper risk management in specialty crops is the main item that prevents our farm from faster growth. I believe this is true for many similar farms involved in the sustainable movement. Let’s all work together to help fix this problem.
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