By Mark Cannella

Small farms in Vermont contribute tremendous value to our evolving food system by being nimble enough to respond to shifting consumer demand quickly. Small farms have pioneered niche products, such as multi-variety mesclun mixes and hybrid CSA memberships. They are engaged in cutting-edge production practices, such as air-cooled poultry processing, as well as land practices that benefit our water, air, and wildlife. Owners of small farms are easily accessible to customers through farmers’ markets and events, allowing them to tell (and sell) their story as individuals, families, and responsible stewards of the land.

By 2016, however, many of Vermont’s direct-to-consumer markets or direct wholesale markets (to restaurants and grocers), which have been the bread and butter for our small farms, have gotten very competitive. Since 2012, Vermont Farm and Forest Viability business planners have observed numerous farms pulling out of farmers’ markets or direct accounts due to lackluster sales. These farms are now seeking broader markets.

Why not encourage these small farms to simply scale up? To grow larger and reach an economy of scale that could increase profits? Many have tried but it turns out to be not so easy. Expanding a farm business almost always requires the recruitment, management, and retention of employees, which requires setting up formal payroll practices, absorbing costs to provide worker benefits, and institutionalizing specific farm management practices for others to follow. This requires new skill sets. Scaling up also leads to a customer service focus that many farmers are not interested in fulfilling. This does not mean that small farmers aren’t friendly and courteous to talk to—many excel at that. But an expanding farm must engage with all different types of buyers. Farming and marketing simultaneously is not for everyone.

Yet profitability is a major challenge for small farms that choose to remain small. The Vermont Farm to Plate Strategic Plan has collected U.S. Census data that highlights the financial woes of small farms nationally. Farms are twice as likely to lose money if the farm is a part-time endeavor of the owners. Farms that sell less than $100,000 in goods have a 50 percent chance of profits. Farms that sell between $100,000 and $250,000 when farming is the primary occupation have a more than 85 percent chance to profit. Again, many argue that individual farms need to scale up to increase their efficiencies. It seems like a no-brainer to scale up to meet market demand and also enhance profits, right?

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