The destabilizing food security situation is releasing millions of consumers to find innovative new options such as using municipal tax free bonds.
Destabilization. We are at the start of another economic cycle. For some it is dread and for others opportunity. The industrial food production system is no longer able to retain its markets, driving millions of consumers to seek new food security options.
In the last few weeks we have seen a big surge in markets related to food security. New prepper conferences are being announced. Meanwhile, live chicken sales at the local feed store are measured in the hundreds per hour for mature hens. Similarly, the backlog for ordering baby chicks extends into months. Hatcheries that previously experienced slow online sales due to their position on the second page of search results are now seeing big sales increases.
Corona Virus Secondary Effects
People are starting to realize some longer term implications of this little virus on food security. It is bringing down Goliath, and Goliath might just be too weak to get up again. We knew that the dairy industry was experiencing more bankruptcies last year already. Likewise, the industrial food business is highly dependent on consistent high volumes, which means that a 1% drop in volume can make a huge difference. You can imagine what a 20% drop will do to companies with a weak balance sheet. The industrial food system is not built to guarantee food security in times of upheaval. It is structured to protect profits first.
The internet farming economy is rapidly growing.
I am becoming aware that there are 3 classes of local farms that we monitor. In the first group are those that were highly dependent on selling to restaurant and institutional suppliers; they have suffered. Their markets have evaporated and their accounts outstanding are not being paid. A second group that was oriented more toward local CSAs (consumer supported agriculture) and farmers’ markets has adjusted. However, their collapsed sales to the restaurant and institutional clients has left them scrambling for a few, precious opportunities. The third group has grown rapidly – those with online sales and shipping. People seeking food security by trying to fill their freezers are finding their answers online; but this too is going to reach a crunch soon.
The problems with food security at the moment are not due to equipment or capacity but to labor problems. Labor conditions among industrial meat processors in particular are deplorable, and on large fruit and vegetable farms they are only somewhat better. The virus could spread rapidly in these conditions, disrupting and even potentially halting operations.
The majority of farmland in the USA is owned by people over 60 years of age, and much of it is rented to farmers who have invested in large and expensive specialized equipment – generally using loans – to produce their crops. They cannot easily transition away from corn and soybeans grown for industrially processed products (xanthan gum, high fructose corn syrup, soy lecithin, etc.) to the production of food crops that we can actually eat.
If we have significant labor disruptions in the processing, it is likely to drive a stop in operations. What do you do when the processor can’t take your pigs? What happens when the staff at those farms no longer shows up? So much of our food is corn and soybean based, coming through an industrial supply chain that can be extremely fragile. There are no reserves for a failed crop season.
When Innovation Happens
You might remember the financial crash of 2008. At that time, we saw a big spike in interest in home food gardens, CSA shares, and other ways for people to diversify their food options. Home food gardens are always a good idea; but sometimes people are surprised at the amount of work required. Raised beds can dry out fast, requiring frequent watering; and any garden that does not get regular inputs of nutrients to replace those extracted by the food will experience declining yield over time. Purchasing necessary soil amendments can ultimately make the food relatively expensive.
At Microbial Earth Farms, we also had many clients asking us about their skyrAt Microbial Earth Farms, we also had many clients asking us about their skyrocketing water bills during the drought. We worked hard to help them with soil quality improvements that help to retain nutrients and moisture; but those are not actions that can solve problems at the last minute. These problems all require action taken over the longer term.
At Citadels, we have developed a way to drastically increase food security. Residents of a Citadels Organic Town become part-owners of the community-owned regenerative farm when they purchase a house. The farm is a multi-species permaculture farm operated by a master steward and producing just about everything that can be grown in the local ecoregion: meat and dairy products, vegetables, fruit, nuts, and honey. This project reduces dependence on global supply chains and brings the most necessary goods and services back under local control. Residents can access everything necessary for survival from their local environment, living Regenerative Lifestyles in the Regenerative Places that support them.
Municipal Tax Free Bonds.
The Citadels innovation is not about the technology of regenerative agriculture, but how we finance it. Citadels treats regenerative agriculture as an amenity to your community, similar to the parks or swimming pool in a suburban subdivision, except in this case, your deepest needs are being met with that amenity. In this concept, regenerative agriculture farms are just as much a part of the natural amenities for the community as are your local parks and trails in any city. What’s different is that a professional steward maintains green spaces using livestock instead of fossil fuel-powered lawnmowers and leaf blowers; and the greens produce your food and regulate your local climate at the same time.
What triggered this breakthrough in thinking was the legislation passed by the Texas State Legislature called Agriculture Development Districts, which uses districts and municipal bonds to finance farms. Citadels’ innovation is to employ this mechanism to pay for earthworks and soil improvements in order to ensure that the farm can produce high quality, nutritious food from the beginning. Residents guarantee the bonds with their property, just as school districts do. In times of tight cash flow, this technique enables homeowners to invest approximately $20,000 per household into their long-term food security. They pay this at the rate of $100 per month – while saving at least that much monthly, through exclusive discounts on a CSA bundle from the local food hub, which includes options for vegetables, fruit and nuts, dairy and eggs, and meat produced on their own regenerative community farm.