In business as in politics, your tactics derive from your strategy. Strategy & tactics derive from your program. Program derives from your macro assessment. Macro assessment derives from your Critique or Analysis of the current situation, which arises from your basic worldview or philosophy. So it is with our need for strategic planning as we contemplate actually purchasing a chunk of land for sustainable urban agriculture here in Central Exposure, WI.
Here are a few strategic planning bullet points we expect to base our plans upon over the next couple few years.
1. Macroeconomic crisis. There is no basis for optimism about the macroeconomic environment. I said this in January, 2007 at a public forum and look, it still seems to be true today. Our macro economic outlook is for a deflationary double-dip recession (3-D recession).
This means that supplying local organically grown food from a small-scale urban ag. operation is going to be very challenging. The high end “foodie” market will continue to shrink, we believe. The low-income market is extremely cost conscious and this gives people marketing to this segment of the market very little pricing power. Everything must be done on a low-cost basis. Whether delivering organic food can be made affordable on a mass scale is an open question at this point. Few people seem interested in this question.
2. Peak oil problem. The global peak of oil production is probably already underway, or at best, within a half-decade. You can always follow the development of this on The Energy Bulletin yourself. Beyond the year 2015, just five years off, global oil production will be falling, and outside the OPEC countries, falling fairly fast.
Small local food producers should expect, as we do, the beginning of overt shortage of motor fuels around that time. We can’t predict what government will do in response, but given recent experience, we can expect that response to be a) too little, badly organized and b) too late, as shown for example in BP oil spill response. Small local food producers should expect themselves to be shoved aside by large corporate farms in their regions when it comes to the rationing of fuel supplies. Expect as we do a chaotic business environment.
3. Man-made global climate change. Most of our season’s production this summer has been ruined by too much rainfall in too short a time, falling on ground not well suited to excess rainfall in a veggie crop production scheme. We expect the man-made global warming to continue ramping up, leading to weather chaos which makes planning for crop production exceptionally tough.
We expect, as small-scale local food producers, to have to plan and spend excessively for both irrigation needs (for hot, dry summers brought by global warming’s regional effects) as well as drainage (for hot, wet summers brought by global warming’s regional effects). The land we have looked at for purchase was viewed with an eye on both these problems. Investment will be needed in both areas we’re sure.
4. Continued credit crisis. We expect the credit crunch or crisis to continue. Despite the massive bi-partisan bank bailouts endorsed by both G.W. Bush and Pres. Obama, banks are not lending out their cash, but instead are profiting from borrowing cheaply from the Fed and investing it in their proprietary trading schemes, bound to once again implode in the near future, exacerbating this crisis once again. We expect small-scale farmers and community needs including small-business job creation to be completely starved for credit going forward.
This means for us, we can never expect conventional bank loans nor small business loans via govt. as a source for capital. Everything will have to be paid out of current earnings. As small-scale producers we expect not to be alone in facing this challenge.
5. Continued unbelievable levels of unemployment. Not only are the Baby Boomers facing their suddenly becoming irrelevant in the labor market, but the 20-Something generation faces systemic, structural, persistent unemployment unlike anything previous generations of Americans have faced.
This means again that the high-end foodie market for boutique-style food offerings from small local food producers will remain constrained and not a high-growth area. This may mean, for small food producers, a need to try offering food at affordable prices. Given the chronic cash shortage many people are facing, various forms of barter — barter for food, barter for services needed by the food producers, and so on — may become increasingly important.
6. Class struggle intensifies. Since 1974 we’ve been studying and teaching the perpetual class struggle in America. In times of economic crisis, such as we expect chronically over the next decade, this struggle does not ease nor diminish, but intensifies.
For small-scale food producers, this means you should expect concerted effort by large agribusiness to continue driving you completely off the scene, out of business, and for government to generally take the side of large agribusiness. Small-scale producers who must depend on off-farm wage labor to support their farms should expect intensified workplace struggle, the driving down of your wages, the loss of pension benefits, loss of health-care benefits, and so on.
7. Crash and chaos scenarios increase in probability. Given America’s recent experience with large-scale crises, and the ongoing #fail mode we have seen with situations such as Hurricane Katrina, the Gulf Oil spill, and other situations, we expect incidents such as these to increase. Since Central Wisconsin is not highly urbanized, large-scale incidents are not expected. However, chronic, ongoing crises such as hunger and chronic underemployment will remain in our forecast.
We will remain open to participating in various crisis-mitigation and mutual self-help type groups as time goes on. This participation will depend upon our assessment that participation is grass-roots democratic and not driven by or dominated by local ruling elite interests.