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."

A new breed" -- hardly words that Clark, a laconic, balding man of 50, would use to describe himself. The words, in fact, come hard at times; Clark is self-educated, and admits to being frustrated occasionally with his inability to articulate his ideas.

Farming, he says as he fidgets with the door of a wood-burning stove in his living room, seemed "a natural choice." After all, he had grown up working alongside his father, who had bought the place back in the 1930s. It was the era of the classic small dairy operation, when milk was valued by its cream content and Clark's father did his own milk run into town. It was also a time -- as Clark learned long before he took over the operation in 1961 -- when making more money meant a strategy as simple as buying more land and cows.

By the late 1960s, though, that formula wasn't working anymore. Urbanization chewed up big parcels of land, and prices soared. Tiny Bedford's population almost tripled, from 3,636 in 1960 to 9,504 in 1980. With five kids to feed, Clark needed to expand. But where to? "Our debt load was running two to three times our income potential," Clark says. "The increments of production had to come from greater productivity per acre." He tosses another log onto the fire and adds, "The only way we could expand was through experimentation and innovation."

It was in his problem -- urbanization -- that Clark also saw opportunity. Demand for fresh produce -- especially tomatoes, he discovered -- ran high at local supermarkets. Because of the bitterly short New England growing season, the tomatoes usually came from out of state; besides being expensive, they were often green, hard, and bland. Given increasing local demand and a relative shortage of good product, Clark decided to try raising tomatoes in an efficient, competitive manner.Then his sister, with whom he held the farm in partnership, decided to get out of farming. Faced with the choice of selling his land or selling his herd, he sold the herd.

Right from the beginning, Clark's instincts led him away from conventional U.S. Department of Agriculture (USDA) wisdom for cold-weather growing: the use of Hot Caps (individualized plastic or paper covers) to protect early plantings. He saw that young plants were still being burned by early frosts with that method, so he turned his attention to plastic row covers, the long, tunnel-like minigreen-houses that were becoming popular in northern Europe, Israel, and Japan, other areas where land and good growing conditions were at a premium.First, he improvised the long tunnels from 6-foot-wide galvanized hoops and clear plastic. Still, the frost won out. Next, he tried large, semipermanent greenhouses, but the amount of labor required to move the structures eventually proved prohibitive, and the cost of materials increased. In 1979, Clark finally hit on a solution. He ran hoops of inexpensive galvanized wire in 1,000-foot rows, over which he draped a layer of plastic. To keep the heat from sterilizing the plants' first blooms, he burned holes in the plastic. Next to each row he laid another strip of plastic in case of unexpected late frosts.

Clark also experimented with black plastic mulches, which are soil coverings that keep plants' roots warm and foster higher productivity. The plastic mulches came in a standard four-foot width, however, and often tomato plants would spread beyond the plastic, leaving fruit on the ground to rot and blemish. So Clark contracted with a manufacturer to make a five-foot version -- which is now the standard.

Other innovations followed. Recognizing a strong demand for fresh melons, Clark experimented with new fertilization methods. He studied foliage feeds (the spraying of liquid nutrients directly onto plants), and found that he could cut costs and increase productivity by waiting until his plants bore fruit before feeding them. He tried various new breeds of medium-skinned tomatoes that were cosmetically acceptable to wholesalers, but were thin-skinned and flavorful enough to distinguish them from the hard, green fruit shipped in from warmer climes.

The results of the experiments were not always heartening. Once, Clark left the row covers on too long, producing a crop of tomato plants with sterilized buds. By the late 1970s, though, his entrepreneurial bent began to pay off. The combination of row covers, foliage feeding, and new tomato varieties added a whopping 80 days to his growing season. Clark now starts selling his outdoor-grown tomatoes on July 15 (three weeks before his neighbors) and continues almost until Thanksgiving, more than a month and a half after other producers shut down. His yield gains seem even more astonishing. Tomato plants that once produced 20 pounds of fruit now produce 40, and Clark's cantaloupes cluster in groups of four to seven.

It wasn't too long before his results attracted a following. Carl Gasparik, a vegetable farmer from East Quogue, N.Y., came north to study Clark's techniques. "I followed his instructions," Gasparik says, "and the results were like strawberries in January. We get tomatoes an easy three weeks before we usually do." And when the World Bank's Gus Schumacher took a trip up to Clark's farm, he was astonished at innovations that might seem like simple common sense. "His microeconomic adjustments, like putting holes in the plastic, are absolutely brilliant," Schumacher says. "What he did, in essence, was create variable heating in a row cover. It's exactly the kind of research the agricultural land-grant colleges should be doing."

Ah, the land-grant colleges! Nowhere have Clark's ideas had a tougher time gaining currency than among traditional agricultural academics, who are widely perceived by small farmers as unresponsive to their needs. For years, Clark has tried, without success, to persuade the University of New Hampshire's Agricultural Extension Service reseachers to incorporate his successful variable venting method in their recommendations to local farmers.

Clark accepts this state of affairs philosophically, noting that in any industry, innovators "have to work with methods out of the standard mold." Still, the academics' close-mindedness rankles his normally friendly wife, Ann. She remembers an occasion when her husband had been allotted the entire afternoon session of a regional agricultural conference. "We overheard a professor sitting in front of us saying, 'This guy doesn't even have a college degree, and he has more podium time than me." The Clarks attended another "small farmers" conference in Washington, D.C., where a professor presented a slide show touting new irrigation methods, including a 175-acre "wheel" system. "We walked away laughing," Clark remembers. "Who in New England has 175 acres of flat land?"

Marketing, say critics of the agricultural extension service, is another area in which the USDA does small farmers little good. "The whole extension system tends to keep them very production-oriented," observes John Vlcek, direct-marketing program director at the Texas Department of Agriculture. "The signal is, 'You produce, and let the larger marketing system take care of the selling." This tendency, in turn, leads farmers to depend on large marketing cooperatives, export markets, and wholesalers, which not only take a percentage of profits, but also leave producers with little control over their own fates.

Yet for many small farmers these days, direct marketing has become a way to retain some influence over their sales. The most striking evidence of this effort is the reemergence of the traditional farmers' markets, long overshadowed by the supermarket chains. Nationwide, farmers' markets have increased by more than 50% since 1979. In California, the nation's largest agricultural producer, there were 6 markets in 1977, 37 in 1980, and 85 in 1984. In Texas, the number has tripled, from 6 to 19, since 1982. New York City's Greenmarket, now in its tenth season, grossed an estimated $6 million in 1984. Other forms of direct marketing have also proliferated. A conservative estimate of the number of pick-your-own farms and roadside stands nationwide is 21,000. Even such states as Missouri and Nebraska, where commodity crops predominate, are investigating the possibilities of more direct marketing.

At first, marketing was a foreign concept to the Clarks. "Coming from a dairy background, we had no idea of the process we'd have to go through to market produce," Ann Clark recalls. "Back then, a truck came by and picked up your milk. You never got a feel for the market, for advertising. It was all done by the cooperative. If they didn't develop capacity, you didn't have a market." As their yields jumped, however, the Clarks were forced to think through phase two of their farm's transformation: How could they get the best possible price for their crops?

They began with tables in front of their nineteenth-century wooden farmhouse, later moving to an attached storage room. Posting a sign that read "Locally Grown," they offered a small sampling of cucumbers, tomatoes, corn, and melons. The response took them by surprise. "We were dumbfounded by the hundreds of customers we got," Ann Clark remembers.

The direct connection to urban consumers began to take on new appeal. "I wanted to keep the operation consumer driven," Richard Clark says. "We were finding out all sorts of things. For example, we found out that not all people wanted big tomatoes. Seniors and singles tended to want smaller, one-meal tomatoes. So we could make adjustments in how we planted and harvested and graded."

The consumer orientation, combined with Clark's extended growing season, also provided opportunities to boost profits without expanding acreage. Clark began raising a small crop of greenhouse tomatoes early in the season, for sale in May and June, before his row-covered plants bore fruit. Instead of charging the exorbitant prices demanded by out-of-state competitors (sometimes exceeding $1.75 per pound), he held his price to $1.19. His strategy was strikingly simple: By keeping prices for his greenhouse tomatoes low, he won the loyalty of local customers -- who would keep coming back during the early outdoor crop season, when larger profit margins were possible. "We'd wake up in the morning with 25 to 30 cars lined up," Clark says. "We were grossing from the same acreage what would normally require twice the amount of land."

Keeping sales up during the late summer, when other local producers enter the market, required an even more aggressive strategy. Ann Clark took control of that. "To keep the customers willing to drive here, just two miles from town, requires a real educational effort," she says. She got her daughter, Ramona, to help design posters informing customers about the different uses of vegetables. Meanwhile, Richard began a series of seminars on food preparation and home gardening that drew crowds during the weekends. Later, the Clarks bought local newspaper and radio advertisements. "We basically had to do the same job of marketing and educating that the large marketing cooperatives do for farmers in other states," Ann says.

The family's experiment in direct marketing could have stopped there, but Richard Clark was eager to break into one more area: the local supermarkets. Traditionally served by centralized buyers, who tend to deal with large-scale producers that are often thousands of miles away, supermarkets took the lead in centralizing agricultural markets after World War II. So when Clark asked the local chains to buy local, he was bucking history as well as entrenched corporate policy.

"We finally got one supermarket to try 60 pounds one day, and we set them up with a sign that said, 'Fresh Local Tomatoes," Clark recalls. "Within an hour, we received a phone call for another 300 pounds." Word spread quickly, and last year Clark's Farm achieved a 100% penetration of Manchester, N.H., supermarkets. "Locally grown produce is a draw for us," says Vic LaRose, manager of Allegro's Star, a Machester-area supermarket that regularly stocks Clark's tomatoes. "We're getting a young, professional clientele who like the idea of a high-quality vegetable that's locally grown."

Despite his success with the supermarkets, however, Clark has kept his operation tilted in favor of retail sales, and has recently invested $100,000 in a new roadside stand. Not that the temptations weren't there. Several wholesalers wanted Clark to expand his commitment to them.But he resisted when he saw other growers get hurt as buyers at one chain cut their orders drastically. "With retailing," he says, "we're more in control of our marketing ourselves. We don't want to lose hold of our destiny."

This operation could be computerized," Clark remarks as he wanders down a row of bedding plants inside one of his low-slung greenhouses. Feeding times and growth-cycle information could be put into a personal computer, he explains, systematizing the experience he has accumulated over years of experimentation. And it is here, in the humid plastic domes that sit across the road from his house, that Clark envisons much of his farm's future growth taking place. In fact, he has already spun off a new enterprise. "After we bought this greenhouse to seed our own tomato plants back in 1976, we saw we had excess capacity," he recalls. "So we thought we'd try a few plants to sell to customers at the stand."

Like his fruit and vegetable business, Clark's new project required the creation of a marketing system. Again, he sacrificed intitial profits to gain a local following. And again, he listened to his customers. When they told him his packaging trays gave them more plants than they wanted, he switched to smaller ones.

Entering the plant market, in turn, fueled more growth. "People started to think of us differently, and started asking about live flowers," Ann Clark says. So the Clarks began growing field mums, expanding that part of the operation as demand picked up.

The diversification of Clark's Farm offers new opportunities to the Clark children. Ramona Clark, 23, now oversees greenhouse operations. Richard Jr., 22, has become interested in vegetable crops and the possibility of a retail garden center. Unlike many of their counterparts from troubled medium-size farm families, neither shows any inclination to leave the land behind.

Indeed, if the family farm itself is not to be left behind in America's agricultural future, it may be innovative, businesslike strategies like Richard Clark's that make the difference. Increasingly driven by local markets, small farmers are helping to re-regionalize agriculture in a way no one could have envisioned a scant 10 years ago. But like their small business counterparts, they will have to stay innovative and learn to keep shifting with the times.

"There's a lot of dairying outfits like mine who need to change," says Clark. "They come to me and ask me about it. I tell them there's no way to do it overnight. They have to ask questions. Can I grow it? Can I market it? I tell them they have to learn to grow with the market."