the people
	ownership

Owners of Swanton Berry Farm, photo by Carmela Meehan

First of all, it is important to
establish a distinction between
ownership of farm land and
ownership of a farm enterprise.
Most people assume that all
farmers own their own land.
But in coastal areas of California, farmland is too expensive for farmers to purchase.  Farmers in our area usually own a farm enterprise that rents the land they farm.

The barriers to entry into farming have always been high. An aspiring farmer faces stiff odds unless he or she was born into a farm-owning family, or has access to large amounts of capital. Even then, a new farmer must compete with established farmers to find a market for his or her produce.

In the early days of the Organic movement, a few entrepreneurial types broke through this barrier by renting small plots of land and building their own markets. Jim Cochran was among the lucky ones to have been ‘bitten by the farming bug’ at the early stages of this movement. While ownership of farmland was out of the question, it was still possible to get started by leasing a small parcel of land and working hard to create a new market for organic food. The early entrants into this market necessarily became very focused on pleasing their customers by producing a superior product which would justify a higher price.

But today, aspiring farmers now have even stiffer odds against their success. Large corporate farms have now established themselves in the Organic market; they can produce at much lower cost than a small farmer, and make it very difficult for a new farmer to command the price he or she needs to get for their products.

A major focus of Swanton Berry Farm over the past few years has been to address the issue of farm ownership. We are trying to create a new model of farming that allows aspiring farmers to enter the profession even though they don’t have any capital.

An inspiration for this effort was the concept of the ‘Employee Stock Ownership Plan,’ which was introduced in new legislation in securities law during the 1980’s. Many companies in this country are now owned by their employees, thanks to this legislation and to the tireless efforts of the National Center for Employee Ownership. (See link.) Although this model of ownership has not been tried in agriculture, it has a very interesting potential for providing a graceful ‘entry and exit’ mechanism for farmers.

Typically, entrepreneurial farmers have built family businesses, some of which have become very successful. But these businesses are plagued by a common problem in family businesses, which is that by the second or third generation, much of the talent has left the farm to become doctors or engineers, and the remaining members of the generation don’t have the skills to compete successfully. The farm slowly wastes away, not for lack of ‘heart,’ but for lack of ‘new blood.’

Jim has begun a process of opening the ‘architecture’ of the farm to a new generation of farmers. The means of accomplishing this is through a stock bonus plan that was initiated at Swanton Berry Farm in 2004, and resembles an ‘ESOP’.

Each year, a core group of key employees will be awarded stock bonuses based on their individual contribution as well as on the group’s success in meeting performance goals. Over time, this group will come to own a substantial part of the business. Current co-owners are: Jim Cochran, Sandy Brown, Adelfo Antonio, Juan Barranco, Bill Kennedy, Rachel Chatham, Jackie Olivares, Luis Ruiz, Tim Campion, and Tim Hudson.

The Company officers are:
Jim Cochran, President
Sandy Brown, Vice-President
Rachel Chatham, Treasurer
Jackie Olivares, Secretary

As a co-owner, a stockholder-employee has full access to the Farm’s financial and other records, and participates in all major decisions of the Farm. The success of the plan will be dependent on an ongoing education program for stockholders, who must begin to think like ‘farmers,’ rather than just ‘employees.’

Key employees who remain with the Farm for a number of years will build equity—more in ‘good’ years, less in ‘bad’ years. When they leave, the Farm will purchase their shares based on a pre-agreed formula. Their financial gain will be directly related to their contribution to the success of the farm during their time here.

The Stock plan opens the door for non-family members to participate in ownership of the Farm. Moreover, it allows them to participate in ownership without investing their own capital. The plan thus removes the barriers to entry into farming posed by lack of capital and chance of birth circumstances, and allows us to attract the most capable people, not the ‘luckiest’. It thereby addresses the ‘succession crisis’ faced by farmers across the world; the farm will take on its own ‘personality,’ which is based not on an individual, but on a philosophy.

The plan might be termed a “Meritocracy,’ because the ownership of voting stock will be held by employees who have differing amounts of stock which bears a direct relationship to their knowledge of the business. Decisions will be made by the collective wisdom of experienced professionals, rather than by outside investors or family members who may not understand the business or the philosophy behind it.

The plan is designed to appeal to career-oriented farming professionals who enjoy working in a collegial atmosphere. They are guaranteed a modest income and benefits package, without the serious downside risk faced by independent farmers who regularly work all year long and still lose money. Further, they have colleagues who can ‘spell’ them so that they can spend more time with their families. Both of these factors will reduce the amount of stress they face, and will hopefully make farming a ‘psychologically sustainable’ option for them.


Swanton Berry Farm, P.O. Box 308, Davenport, CA 95017 | (831)469-8804 | Web Design: Dov Bock © 2005