Small Potatoes

Much like minimills in the steel industry, small farms are using their size to stay flexible and responsive to new market opportunities.

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The farm had always been there for Richard Clark; it was literally outside his living room window. It belonged to his father, who had staked the family fortune on this 80-acre dairy farm in Bedford, N.H., just outside of Manchester. And there was never any question that the son would follow in the father's footsteps -- even when, as a high school student, he was offered a prestigious General Electric Co. scholarship to go off to the city and study. "I turned it down," Clark says in his matter-of-fact manner, "because I knew that when I accomplished something here, it would be in my name."

What Clark didn't know was that he would have to reinvent the family business to survive: change his product line, boost productivity with new technologies, and redefine the concept of marketing as it applies to small farming. And he never dreamed that, having accomplished all that -- with Clark's Farm grossing in excess of $300,000 and netting at least 20% on the gross -- he would end up with scholars flocking to his door and a World Bank delegation proclaiming his inheritance "the most advanced farm in New England."

This is a family farm? To the avid filmgoer, Clark's success may come as a surprise, for if there was one predominant theme among last year's films, it was that of the family farmer who fell victim to bad bankers (Places in the Heart), bad bureaucrats (Country), or bad weather (The River). Indeed, the farmers' plight has turned into a mass-culture passion play, complete with heroes, villains, and victims. It is the subject of Time and Newsweek cover stories, endless somber television specials, and some of the most fervent speech-making heard in the halls of Congress in years.

Most of the passion centers on the nation's medium-size commodity-crop producers -- North Dakota wheat farmers, for instance, with several thousand acres under cultivation, or almond growers in California. Encouraged by the devaluation of the dollar, a much-hyped overseas market, and increasing land values, medium-size family farmers in the 1970s decided that stepped-up production was the key to their future. For a while, the strategy worked: All through the decade, land values rose, allowing for bigger loans and bigger crops, the prices of which were buttressed by a multibillion-dollar price-support system. By 1979, average farm size was up by 40 acres.

Then the economic climate changed. Interest rates climbed, land values receded, the dollar came back strong, and foreign agricultural productivity rose. Exports, which had more than tripled in the 1970s to account for two out of every five harvested acres, began to plummet. From 1978 to 1983, total agricultural receipts fell 16%. Not big enough to reap economies of scale but too big not to be in debt, more and more farmers got into deep trouble. Twice as many filed for bankruptcy in 1984 as did in 1983.

The numbers add up to a serious crisis, with roots more complicated than any brief summary can convey. But amid all the rhetoric and genuine concern, in is easy to forget that the problems of all farmers -- and all segments of agriculture -- aren't the same.

Not surprisingly, the largest farmers -- those with the resources to finance their operations without loans -- have found opportunity in the woes of their medium-size brethren. Land can be had for a song, and debt-free farmers are taking advantage of the bargains. Although most of this land is not going to such giant corporate farms as Tenneco Inc. and Gulf & Western Industries Inc., but rather to large, incorporated family farms, the trend has prompted medium-size farmers to scream for relief from "corporatization."

But a more surprising trend has gone virtually unnoticed. As medium-size farmers continued to fold, a number of small farmers, like Richard Clark, were figuring out how to increase profits without expanding their acreage. Much as minimills do in the steel industry, these farmers use their size to stay flexible and responsive to new market niches.

This kind of minifarm strategy can't work everywhere, of course. For one thing, it depends heavily on direct marketing in urban centers, something a wheat grower in North Dakota has very little opportunity to do. Still, there are lessons for all farmers in Clark's experience. "Dick Clark represents a new breed of entrepreneurial farm managers who control their own products, research, and marketing," says August "Gus" Schumacher, formerly a World Bank agricultural economist and now commissioner of agriculture in Massachusetts, who has studied Clark's methods. "He's among the top 2% of farmers in the whole country."

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