Show Me The $$$

Here it is, the money section. How can one start a several hundred million dollar a year farm with no start up capital? On 49.59 decentralized acres? In the city? Answer: permaculture design techniques.

A city is a seed just waiting to be watered. Permaculture thinking is that needed rain. Rich and abundant with resources, here are some of the things an urban environment has to offer: plenty of variable macro- and micro-environments that offer a variety of growing opportunities not generally thought to be available in the regional zone or in outlying rural areas; large amounts of resources lying around, or being disposed of, waiting to be fully utilized; no natural ecosystems to disturb or destroy as with conventional farming; and lastly another resource the city is abundant with is under and unemployed.

The list of resources can go on and on, cities are full of them. But what about the several hundred million dollar a year profit margin mentioned earlier? How is that number derived? Also, no start up capital… how does that work? Keep in mind that currently this is still a goal, however it is a realistic one. To answer the first question, the numbers were calculated by using the following formula:

• There are 27 neighborhoods in Spokane.

• We would like a minimum of 100 houses in every neighborhood to pledge an average of 800sqft each.

• This means:

27 neighborhoods x 100 houses per neighborhood = 2,700 houses x 800sqft per house= 2,160,000sqft or 49.59 acres.

So that is how we arrived at the on-the-ground acreage calculation. Next the square foot is set against a projected, realistic, target production yield of $125 over the course of a year. Permaculture design maximizes the size of the space, as one of its attributes, by using the available vertical spaces. Trellis, stack, and tower systems are some examples of how to use “up.” Also, all of these techniques and technologies are proven to work. This, coupled with minimal to no inputs financially, after fully established, allows for the $125 projection to be, as stated, realistic.

This would mean:

$125/yr x 2,160,000sqft= $270,000,000 each year for LYL Coop Farm. That’s a whole bunch of green. Here is the breakdown of how the overall net profits will be divided.

–BREAKDOWN LIST—

No dollar amounts are given, as these are contingent on harvest yields at the end of the seasons. Goal dollar amounts are listed in parentheses just to give an idea as to the potential earnings this farm is capable of generating.

Divisions will be as such:

— 20% Homeowner Lease Dividends

The dividends are calculated using the total dollar amount divided by the total amount of farming space leased to equal
a square foot share. This share is then multiplied by the size of space leased to create the homeowner dividend.

(800’sq would yield @ $20,000/year )

–60% LYL Coop Farm Labor Share

The labor share is divided equally among the labor force. The current maximum size of the workforce is 3000 persons, with the property to labor ratio being 1 to 1.1.

(each person, of the 3,000, earns @ $54,000/ year)

— 5% LYL Coop Farm Permaculture Design Team

As with the labor force, this is shared equally among the design team. Here is where this business becomes odd. There is a
policy concerning the distribution of wealth and this is how it works:

— 5% to the City Treasury

All business should share the profits they make with the city they do business in. This is a pretty simple concept to follow.

–10% to community support and development programs. This could be anything from start-up funds for other co-operatives to supporting needed social services in the community.

As savvy business people will be quick to notice, we haven’t mentioned expenses. Here is the answer to the second question stated before. In maximizing all available resources, along with creative permaculture thinking and guiding principles, there really are not any expenses and ones that do occur are easily taken care of. Because it is a for-profit cooperative business, the initial labor body uses sweat equity as a buy-in. Using well tracked sweat equity to help establish the farm allows for its creation without upfront salary capital. Some have scoffed at the idea of this actually being a possibility, but they apparently have never heard of an unpaid, two-year internship for a company without guarantee of employment. The upside here is this: it is no internship, but equity into ownership of a truly green industry.

All the materials needed for construction are literally lying around. Building contractors love to lighten their waste loads by having it recycled into community projects. Seeds, starts and such can be acquired by gleaning or cutting propagation. Another method of acquiring necessary plants is “seed credit” where a seed or plant company “loans” the seeds or starts needed and within a short amount of time (like 5 years) three to five times the “loan” is “repaid.” Social networking that is not Internet allows for some really good connections.

In the aspect where liquid cash is needed, short-term matchstick business can be established to fill the need and the money becomes necessary materials within 24 hrs of cash acquisition. Yard clean ups are a good example of this because here not only does one acquire liquid capital but also biomaterials. For instance, the founders of Bruce-Ruhl Design spent 4 ½ hr in all and cycled 18 miles total to harvest 26 black walnut tree saplings that, once potted ($5 for bag of dirt), sold a couple weeks later for $15 each. This covered the cost of a presentation they did on green-scaping rooflines. The number and type of businesses are limited only by creativity. They only just need to exist seasonally or occasionally until the needs are met and are NOT intended to be long term or profit an individual as 100% of the funds go into the necessary support.

Due to their design aspect, these gardenscapes, in of themselves, eliminate the cost for water, fertilizer and seed, three of the several costly expenses in any agribusiness endeavor. Permaculture designed gardenscapes do this by: capturing and holding all of the needed water onsite; maintaining healthy beds with appropriate biology that fertilize themselves; and recognizing all plants that are seasonal produce seed, time just needs to be taken to gather it. Another cost saving aspect of LYL Coop Farm is the appropriate use of bio-power technology. Using bio-power eliminates vehicle and large equipment purchases, maintenance, fuel, and insurance; expenses that are only going up. All these combined cost-saving aspects allow for very little money out and a projected profit margin of 97-99%. Seriously. Permaculture design methods in the city, when done right, are capable of producing these results.

Naturally, those are the future projections once the business is fully established.  We will be successful once we design and convert all the properties that are participating. In not anticipating a significant return this year, any money acquired from a harvest will be directly reinvested (re-sown) back into the industry. Revenue and yield amounts will be tracked during the course of next year and we anticipate three to five years to reach full growing and farm production. There is no hiding the fact that lots of work has to be done first before any return is gained. This is true for the start of any business, however, and the potential return plus the need for food stability and jobs is worth striving for the goal of seeing LYL Coop Farm become a reality.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s