by Gene Logsdon
A young man I know, with a cottage farm in his vision of the future, bought a duplex in a village for $45,000. (The same house in a city would have cost him $100,000.) He and his wife live in one half, and rent out the other half. The rent covers most of his house payment. At the same time he is making improvements on the house using his own labor. He will have the place paid for in about a third of the time he would have spent paying off the mortgage on the $100,000 home in the suburbs, and he will do it without dipping into his monthly savings. In ten years he can rent out both halves of the duplex, or sell the house and leverage the money into a cottage farm.
I avoided borrowing for an additional ten acres with "cooperative buying." When a nearby ninety-acre farm came up for sale some years ago, four of us cottage farmers bought parts of it. Each of us could afford to buy ten- to thirty-acre parcels, but none of us could afford the whole thing.
Just recently two other cottage farmer neighbors bought sixty acres that lay between them-thirty acres each. That much each could afford without borrowing a whole lot of money. More significantly, they could outbid the large cash grain farmers who had to weigh the price purely against the per-acre costs of their commercial operations, which as we shall see are higher than cottage farm costs. The commercial cash-grain farmers could not justify any other consideration that made the land more valuable to the two cottage farmers: residential value, recreational value, husbandry value, or market gardening value.
Another form of cooperative buying is co-ownership. Three or four families might buy a hundred-acre farm together and all live on it without subdividing it. However, human relations problems can arise with this arrangement. Once upon a time there were two good buddies who bought four acres of woodland and pond as a vacation spot for themselves and their families. They had a falling out and wanted to divide up the property. But how do you divide a body of water between two owners? Yep, that's what they did. Put a rope right across the middle of the pond: one family on one side, one family on the other. Fortunately, with time, the feud mellowed.
Many cottage farmers start by buying a plot of bare land out of savings-two, three, maybe five, maybe forty acres. Then they slowly, in spare time, build a house and barn on the property, often, like Scott and Helen Nearing, using the rocks and lumber from their property for their buildings. They in effect "borrow" their own labor, time, and raw resources, rather than borrow money.
Some farmers have gotten out of financial trouble (the result of borrowing) by selling part of their farms. Often they find that by focusing their time on a smaller number of acres, they can farm better and make almost as much income, which they can keep rather than pay to the bank as interest. Ken West recently visited our farm and gave me permission to use his case as an example. Ken, in northern Montana, was grain-farming four-hundred acres and going broke. He reduced his size to a hundred acres, got out of debt, and began raising organic oats for oatmeal as well as continuing to keep his small herd of llamas. Yeah. Llamas. He says he sold one recently for over $20,000.
All five methods and others you may think of will only be successful if combined with a frugal lifestyle. Although few people seem willing to admit it, it is easier today than ever to save money. The more things go up in price, the more you save by not buying them. Most of us could be saving more but think we must spend it on "necessities" that are really luxuries.
Don't buy gadgets you don't need. Why buy garage door openers unless you are disabled? Ice crushers are unnecessary unless your hands are crippled with arthritis. We have one, and it is just dumb: you can crush ice much more handily by putting a bunch of cubes in a cloth bag, and pounding them with the flat of an axe blade. Leaf blowers are rather stupid. I saw three workers on the lawn of a public institution last week, each armed with a blower, trying to corral a flock of about twenty-five leaves into a pile. What I wouldn't have given for a camcorder ... but that's another doo-dad you don't need. The more kitchen appliances that people on the verge of bankruptcy own, the more they eat out. Don't buy clothes you don't need. A good suit can cost eight hundred to a thousand dollars today. A thousand dollars buys an acre of land that, in the right hands, might make an entire living. Let those who put their faith in fancy threads laugh at your jeans. Bury them in their thousand dollar suits.
Be especially astute about buying automobiles, your biggest cost next to housing. If you borrow money to buy a new car, you will pay for it at least twice because of interest on your debt. Owning even the cheapest new car will cost you $2000 to $3000 a year out-of-pocket, if you use your own money. If you use the bank's, that car will cost you $4000 to $6000 per year. People who pay on car loans all their lives will spend a hundred thousand dollars in interest alone. Much of that money could otherwise be in a savings account making you money, not losing it. If you have only enough cash to buy a $1500 car, be content. Better yet, drive a $1500 pick-up truck, because that is the most useful piece of equipment a cottage farmer can own.
And that brings up another excellent way to save money. Learn how to fix cars and tractors yourself. The labor charge at the garage for car repair is something like $30 an hour. Being able to keep older piston-ringed roarers in repair enables you to avoid one of the greatest costs of living: depreciation on newer piston-ringed roarers.
Where you live can be the source of your greatest savings. If you decide to live in the city (tah dab) where the salaries are higher than in rural areas, don't bet that you will come out ahead. A newer nice house, but nothing terrific, presently costs $150,000 in Columbus, Ohio, to consider a place I am familiar with. Some sixty miles away, in our village, a house similar to it, perhaps a little older, can be purchased for $90,000. A humbler village house, older yet, but still well built though possibly requiring some modernization or renovation, can be purchased for $40,000. Think of the enormous savings in interest over a lifetime, by going the cheaper route. The best kept secret in America is the bargain that awaits the wise home buyer in smaller towns and villages, the most pleasant places to live in the United States.
Receiving interest on money is a far, far different story than paying interest out, as the rich know so well. When the Pontiffs of the late Middle Ages realized how lucrative exponential money interest could be, they quickly changed the Church rules prohibiting usury. To get an idea of how fast your savings can mount up, remember the rule of 72. You can roughly calculate how soon savings will double by dividing the interest rate into 72. If the interest rate is 8 percent, $5000 will grow to about $10,000 in nine years-72 divided by 8. Even more roughly, you can generally figure over a period of twenty years, during which interest rates will gyrate up and down at the whim of the Federal Reserve, that savings double about every ten years.
Since you pay a higher rate of interest on borrowed money than you get on saved money, you can understand, by the same rule of 72, how borrowers most often stay poor. You can also see why a person of humble circumstances who saves even $1000 a year, at an average 6% for forty years, has a very nice nest egg for retiring to a cottage farm in his or her mature years. A friend of mine, doing exactly what the expert farm magazines advised against, farmed all his life on rented land, never making much money but spending even less. He bought a 180-acre farm when he was sixty three for cash with plenty left over along with farm income and Social Security to live comfortably for the rest of his life. Essentially his "secret" was simply to stay away from borrowed money and save a little every year. As I recall, he borrowed only once: to buy his first (used) farm machinery. His other reward for always avoiding the luxury that borrowed money promises has been, as he puts it, not ever having to kiss some sonuvabitchin' boss's ass."
If your goal is cottage farm contentment, some of the most unnecessary money you can spend is for a college degree. The colleges would have you believe that a college degree means more money in your lifetime, which is precisely the wrong reason for trying to get educated in the first place. In the second place, it ain't necessarily so. Your other career may deman
d college certification, but if not, it really is a little foolish to spend a lot of money for information that is now easily available from other sources. Just read every book and magazine you can lay your hands on or can access through your computer or through inter-library loan. .A College of Agriculture degree (in agricultural economics, for example) is especially unnecessary for your future as a cottage farmer (or any other kind of farmer). There are easier and cheaper ways to gain that knowledge. The $40,000 to $60,000 you spend for a college degree, which goes mostly for the inflated salaries of professors who are more interested in their research than in teaching, will do you more good if invested in land or a business, or good tools, or a savings account or books and modem hookups to libraries or to computer bulletin boards. Add to that the money you could be earning instead of sitting in sterile classrooms, out of which you could save another $5000 a year, or $20,000 for four years. That's a hundred thousand that could be doubling every ten years if saved, or possibly making a living for you if invested in a cottage business.
In the early years of saving, the eventual reward seems hopelessly far off. But if you stick to the habit of setting aside some money each month or invest that money in land or tools that produce something for the long term, you will be rewarded not only in a bit of financial security but in contentment, because the way of life you must follow precludes endless striving for Things. Once you realize how much more precious independence is than all those Things, saving is easy. If your spouse doesn't agree, you have the wrong one for cottage farming.
Financial Yardsticks in Cottage Farming
After learning how to "think small," the next rule of pastoral economics is to measure the value of products in human terms, not in financial terms.
"Why do you raise sheep when there's no money in it?" I asked a fellow shepherd.
"Well, there's a little money in it," she replied. "But the real reason is that my sheep make me happy."
Even suggesting that happiness should have a monetary value draws gales of laughter from those who think of themselves as hard-nosed economists. But as a matter of fact, happiness does have a very practical value because stress and unhappiness are known to cause health problems that can result in astronomical medical bills. Industrial economists have no way to measure that value so they ignore it.
I have admired for years the home economy and contentment of a couple who live in a tiny village near my home. I asked them once how it was that they remained in such good health and active life far into their retirement. The husband, working in his woodworking shop and listening to a Mozart tape, smiled. "We have always made it a point to avoid stress as much as possible," he said.
In industrial economics, sheep have two measures of value: as mutton and as wool. What are the additional measures of value in pastoral economics?
Money earned from one's labor can be counted as a profit, not a cost as it is in industrial accounting. Shepherds consider their time spent in raising sheep and any money derived from that time as their wages-their profits so to speak. On the other hand, for a large-scale farmer hiring people to do his work so he can expand in an industrial economy, labor is an expense, a necessary nuisance that the Lord of the Manor must pay out before he can count his profits. Of course, when I hire work done, as for sheep shearing, I assume, to that extent, the financial situation of the industrial economy. It costs me more in out-of-pocket expense to hire than to shear the sheep myself.
(There is an interesting effect of industrial accounting in this regard that I can't resist pointing out here. Because labor is considered a cost in industrial accounting, and because farm labor has not been fully assimilated into industrial economics-has generally not been unionized or organized in any other way to bargain for a fair wagefarm work is assigned a low value: $7 an hour is the figure agricultural economists currently use. As a matter of fact, I know laborers who drive one hundred thousand dollar harvesters for large scale farmers today, or who milk the cows in thousand-cow dairies today, who make less than that. Economists who place the value of farm labor at $7.00 per hour while assembly line auto workers make $20.00 an hour, reveal how deep-seated is the industrial prejudice against farming. And with reason: if farm workers were paid on the same level as urban workers, industrial farming would long ago have collapsed or food prices would have doubled.)
When the shepherd eats his own lamb chops, the value of the meat quadruples over what the stockyards pay because that part of the cottage farm production that is used by the cottage farm household can he valued according to its retail prices. The time I spend producing food for my own family is more profitable per hour, with this kind of accounting, than the time I spend writing. And that does not take into account the probability that our home-grown food is more nutritious.
Wool sold directly to a local spinner rather than to the conventional wool market can bring twice to three times the price. If a shepherd processes the cottage wool into clothing, purses, or rugs, and counts the labor as income-that is, as a foregone or avoided expense-the value of the wool goes up even more.
Even when I barely break even with my lamb and wool on the conventional market, I "profit" because the sheep mow and fertilize my fields for me as part of my non-herbicide weed control program, and keep fencerows relatively clean of weeds.
Sheep manure is second only to poultry manure in fertilizer value, and the mere accounting of the amount of nitrogen, phosphorus, and potash in that manure does not begin to add up to its total value for soil fertility.
The value of keeping sheep, as opposed to letting some big-tractor farmer turn all the sod land required by sheep into erosive surplus corn, is immeasurable. The sod land will not erode; the sheep will provide the fertilizer and replace the cost of mechanically harvesting those acres, and thus improve the sustainability of the land while decreasing the chances for pollution.
The value of a husbandry-driven infrastructure of small cottage farms across the whole nation is also incalculable. If healthy, such a rural culture could mean who knows how many people retreating gladly and willingly to the countryside, relieving the population pressures that are turning cities into heat sinks of human frustration. Spreading out the population to share the life of shepherd and cowboy would hopefully generate a renewed emphasis on traditional rural virtues and give families a reason to work and play and love together again.
I sometimes entertain myself with a crazy vision of Ohio. From Lake Erie to the Ohio River, the land is quilted into meadows, tree groves, and playing fields, the latter kept manicured mostly by the grazing animals upon which the local economy would be based. In the groves, pastoral "factories" would be built-home/workshop combinations where most of the society's basic manufacturing would take place. Instead of staring at flow charts and spreadsheets all week, today's office workers could sit in their home workshops and spin and weave worldfamous Ohio Persian rugs or construct world famous solid walnut furniture, making a living by producing something they could be proud of. Instead of gathering on street corners to await in boredom the day when they can join the real world of meaningful work, teenagers could have just as much fun gathering in field corners where they would also be keeping an eye on the flocks. Every weekend the towns would host food and craft fairs along with sports tournaments. Golf addicts could play 7000 holes from Cleveland to Cincinnati and never leave the sheep pasture golf courses. Champion basketball and football players could become champion sheep shearers and hay bale slingers in the off-season and thereby contribute something useful to society while staying in shape. Teams of former factory workers could travel the grove and grass landscape, turning excess lumber into houses and home fuel. They could build small lakes and ponds for water storage, fishing, and swimming. We would all live eventually in a region-encompassing natural preserve. Good T-bone steaks and lamb chops and fresh fish would become as cheap as White Castle hamburgers. Pollution would diminish drastically because long-distance truck transportation would lose much of its economic base and lon
g-distance vacation driving would lose much of its allure.
Well, I can dream, can't I?
There is another aspect to such romantic visions of a pastoral economy that is not at all as impractical as the foregoing sounds. This aspect speaks to a situation too far in the future to articulate cleanly yet. But as national columnist Richard Reeves has been thoughtfully suggesting, we may be looking at a future where there is not enough full time, salaried work to go around. It is scary enough when big companies lay off workers right and left, and others flee to third world countries in search of cheap labor. But when Procter and Gamble says it must lay off workers not because the company is losing money but so that it can continue to make money, we may be hearing the first announcement of the end of the industrial society-the end of a society based on an ever-increasing scale of wages and an ever-enlarging rate of production. Whether one looks at that possibility in the practical short term-What will I do if I can't find a steady job?-or in the theoretical long term-What if the number of good paying jobs, especially white collar jobs, continues to decrease?-the cottage farm and workshop begin to look more and more appealing as a safe refuge. Within hardly a two-mile radius of our farm, in a county with a population of only 26,000 people, in a landscape of widely dispersed houses and farms, there are seventeen home businesses, not counting farming. Kathryn Stafford, associate professor of family resource management at Ohio State University, who participated in a recent nine-state survey of home businesses, informs me that such numbers are not unusual today. Most of the businesses in our neighborhood generate supportive income, not main income, but most of them are also hedges against possible interruption of the family's main source of paid wages. I don't describe those of us maintaining our livelihoods at home as having a sentimental yearning for the past, but rather a very practical vision of a post-modern pastoral economy where real goods count for a lot more than money.