Economic Valuation of S&S Homestead Farm

S&S Homestead Farm integrates animals and plant crops and operates to provide healthful, fresh food to the farm family and interns, and to the community. All produce sold off the farm is sold directly to customers through a CSA (vegetables) or by custom contract (meat). All labor is provided by the farm family, with assistance from the 2-4 interns who, in exchange for room and board and instruction in biodynamic farming practices, join the farm during the summer each year. The farm adheres to an ethic of ecological sustainability and self-sufficiency, which goals are reflected in the diversity of plants and animals on the farm.

The Farm Enterprise
The farm enterprise comprises vegetables, beef, milk, fruit, lamb, pork and eggs in order of economic importance. Most of the inputs to production are grown on the farm, beginning with the green forage, hay, grain, vegetables and fruit fed to animals, whose manure in turn provides fertility for pasture, hay, vegetable and grain production. The farm provides for most of the food needs of the farm family and interns, and much of the summer and fall harvest is preserved via fermentation, drying, canning, freezing, or other value-adding processing to provide a continuous supply of meat, vegetables, and fruit throughout the year. (See Production Log, which shows what S&S Homestead Farm produced for on-farm use in 2010.) This helps keep the cost of purchased foods (coffee, salt, etc.) to a minimum and is a primary motivation for keeping the farm system diversified and integrated.

Economic History of the Farm
S&S Homestead Farm has been economically solvent from its inception, partly because the farm has never operated with any debt. To avoid accruing debt, the owners purchased the land and developed farm infrastructure by investing portions of their salaries from off-farm jobs before moving to the farm full-time fifteen years ago. Elizabeth continues to hold a part-time position at Lopez Island High School.

Economic Performance of the Farm
The farm owners do not pay themselves a salary or withdraw any farm profit; instead, net profits (ca. 25% over cost) are returned to the farm to build infrastructure and the intern program. A large portion of the food produced on the farm (100% of chicken, 100% of fruit, 55% of vegetables, 100% of dairy, 33% of pork, 20% of eggs, 17% of beef, 15% of lamb) is consumed by the farm household, amounting to nearly 42% of total returns. Variable costs are 31%, and fixed costs 32% of total costs of production (for details see “Economic Returns”). The cost of the internship program is 37% of total production expense. For many years, educational services, including intern- and apprenticeships, workshops, off-farm lectures and public school courses (for example, a full-semester course in agricultural science taught at Lopez High School) were offered free of charge. Today, Elizabeth receives compensation for teaching the high school class in ecological food production on the farm as part of her teaching contract with the Lopez Island School District, while Henning continues to donate his time in teaching the class together with Elizabeth. College (and occasionally high school) students, who earn academic credit through curriculum-based internship contracts with their home institutions, pay for room and board on the farm, but do not pay tuition. Production-based summer interns receive housing (often a campsite), seasonal food, and a small stipend paid for by the CSA.

Interns provide a considerable number of manual hours of labor to the farm, although efficiency varies from 40-85%, depending on experience, skill, and personal motivation. While interns do not increase farm profitability, they make important contributions to farm infrastructure development, maintenance, and food production for on-farm consumption. Their applied on-farm research also increases the farm knowledge base substantially. 

Measuring Non-market Values
Academic discourse regarding the economic valuation of products derived from ecological systems recognizes the need to include goods and services that have measurable value but are not sold on the open market. In undertaking an economic analysis of S&S Homestead Farm, the question of how to measure the true value of farm outputs comes up continually. The owners subscribe to the statement made by small-scale farmers convening at the recent World Summit on Sustainable Development in Johannesburg, South Africa, that small holder farming has in the past and continues to “provide food, employment, healing, and spiritual inspiration, [and is] a central basis for social education and skills development over generations.” What economic value do we place on human and animal health, a beautiful landscape, clean water and air, biodiversity, community food security, and human shelter, all of which are produced by the farm but not sold in the market place? What is it worth that a farm sustains itself without overtaxing the ecological systems upon which we all depend? To read more about the biodynamic perspective on how to assess farm economic performance, see “How to Form a Healthy Farm Organism: The Biodynamic Perspective on Economics.”