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Chapter 6 of "Short Circuit" - page 4

As neither Herr nor Deary had heard of the CSA movement in North America or the subscription gardens in Britain, the details of the Philipstown project were developed from scratch. "This had the advantage that we could evolve something that was exactly right for local conditions but the disadvantage that we were never able to say to the Trust's board, 'Look, it's working over there'" Herr says. Deary adds: "I hadn't heard the term CSA until this September [1994] and when I began using it, a friend told me that in her profession it stood for child sex abuse." He learned his skills as an organic gardener by being a WWOOFer - a Willing Worker On Organic Farms - which entailed moving from holding to holding and working for his board and lodging and perhaps a little pocket money besides. "I really learnt what a good day's work involved" he says. John Butterworth says that WWOOFers give the Sundrum co-op substantial help.

Finding land for the garden took over a year. "People said it wasn't possible to make a living on a smallholding of, say, ten acres. We weren't being taken seriously" Herr says. But in November 1993, they met a wealthy landowner who was prepared to rent them a derelict barn, farmyard and cottage plus three fields which had previously been used for grazing horses and had never been chemically farmed. "That meant that we could go straight into organic production without any transitional period. We were lucky to get it" Deary comments. "The rent is 2000 a year, so we got no concessions."

A leaflet was printed which set out the aims of the Philipstown Trust and outlined the garden project. Part of it read:

"[This] is an invitation to membership of a community farm from which you will enjoy freshly-grown vegetables in abundance for 8-9 months of the year.....We hope to attract 120 members in year one, each buying 208 worth of produce...An August delivery might include tomatoes, peppers, peas and beans, potatoes and cabbages. A mid-winter delivery would have sprouts, leeks, cabbages and carrots. We will be growing more unusual varieties such as kohl-rabi and corn, too."

The 208 subscription was reckoned to provide sufficient vegetables for a family of five and half-shares were available at 104 for smaller households. Prospective members were asked to pay half their subscription in advance and the rest by monthly banker's order, and also to make the project a interest-free loan of 100 (50 for half-shares) for three years to cover its start-up costs. As if that was not enough, everyone was also asked to fork out 5 for a year's Trust membership. "To qualify for public funding [the Trust] must be clearly seen as a community-based organisation" the brochure said. In any case, it added, the costs of newsletters, copying, and postage had to be met.

Ambitious? Yes. Over ambitious? Well, most of the Trust's board feared that it would prove to be so. Herr and Deary sold twenty memberships quite quickly and bought polytunnels, a tractor and other equipment with the money plus a 7,000 overdraft which Herr had personally guaranteed at the bank. It was only after they were fully committed - some would say over-committed - that another forty subscriptions came in. "It helped that we were both local and our families were well known in the town" Herr comments.

Ollan Herr and Mark Deary of the Philipstown Trust, Dundalk
Help from official bodies was also important. The Irish Government's horticultural development agency, An Bord Glas, gave 1,500 and the government's local employment creation agency, which originally said that it could not help an agricultural project, eventually came up with a 3,000 grant.

Production in the first season went remarkably well. This was in large part due to the long hours and great effort put in by Deary and his colleague Aidan Faughy. "Aidan complements me, because he's good with things like the tractor" Deary told me towards the end of November 1994 when I bumped into him in Dublin "We've been working at least a sixty-hour week and it's only now that I've got my old interests back and been able to think about other things." Nine of the thirteen acres had been brought into cultivation, membership had risen to 105 and 9,000-worth of vegetables had been sold.

As a result of donations and the grants, the financial results - a loss of just over 4,500 after non-capital costs of 27,000 - were, for a start-up, reasonable, too, although the shortfall would have been greater had Deary and Faughy been properly paid. They got 140 a week each, which Herr realised was far too little. "Mark runs the farm while I look after the financial side. He's worth a lot more than he's being paid. We've got to be able to pay him at least the average industrial wage" he told me early in 1995, adding that, with just over 100 families signed up for the new season, he was optimistic that things would go really well.

Click for panel from original book on solving the land problem

They did not. The unpredecented drought saw to that. East winds and a dry April and May meant that the two men had to spend hours each day taking the tractor to a nearby river for water to keep the seedlings alive. "It was a particularly sensitive time" Deary says. "We were planting out the brassicas and Aidan had to work on watering from 6-10am and then I would work from six to ten at night. They survived but didn't grow. It was all we could do to keep them on a starvation water diet.".

"We kept thinking 'It must rain soon'" Herr says. "We felt that, as soon as we spent money on an irrigation system, the drought would break and we'd get a normal Irish summer". But in mid-May, they decided they could wait no longer and Herr borrowed 8,000 personally so that a well could be bored, a pump installed and they could order a sprinkler system from Italy. "It was either that or see the farm collapse. As it was, we were unable to make six weeks' deliveries. We should have started supplying members in mid-May but in fact began at the beginning of July."

Who was to cover the cost of the missed deliveries? Legally, the Philipstown Trust was liable as its promotional literature had indicated to subscribers the amounts and value of the vegetables they could expect to get. But the Trust had no money to make refunds and, in any case, what was it except an organisation made up of the subscribers themselves? An extraordinary general meeting was held in September to sort the matter out and to consider how the project's other, more serious, losses should be met. These arose because, with two full-time employees, the garden needed an income of 40,000 to break even, which essentially meant that it had to have 200 subscribers paying 200 each. Even without the drought, the project would have been lucky to have reached this number in 1995, although forty new families joined in the early part of the year. However, when the missed deliveries destroyed people's confidence, the subscriber-recruitment drive stopped in its tracks and some faint-hearts even cancelled their monthly standing orders, cutting the number of participating families to 133.

Herr was extremely anxious before the meeting. How would the members react to what he had to tell them? How would they vote on a motion to wind the whole thing up? "When we put the motion to liquidate, the people who had been criticising us most fiercely earlier in the evening immediately swung round and wouldn't consider it at all," he says. Instead, the membership decided to convert their interest-free loans into grants and to write off the amounts owning for the missed deliveries. More importantly, 33 families said that they would make donations of 200 each to cover the shortfall in subscription income.

At the beginning of 1996, Herr and Deary were looking forward with confidence to the new season, particularly as, having seen the membership's rock-solid support, the International Fund for Ireland, which works to build links between the two parts of Ireland, had promised to make the project a substantial grant to buy new equipment. "We were eligible for support because our subscribers come from both sides of the border," Deary told me. "When we set the project up, I bought the equipment I thought I was going to need. Now I know what I need and it isn't quite the same thing." Indeed, Deary had found that running a subscription garden was very different from growing for the commercial market. "If you are growing to sell wholesale, you can plant and harvest all the crop at the same time. Here, you need to have a little of each of a wide range of vegetables ready for picking every week. This means you have to have small plots of a wide range of things and makes planning quite complicated."

Herr was reasonably sure that they could get membership up to 200 during the course of the year. "The Dublin Food Co-op is going to subscribe for thirty memberships," he told me."That will take us to up to about 165. Then a group of five families in Drogheda are joining and a new group of ten families in Newry are coming in as well. With the people who said they were going to join last year but didn't because of the crisis, that should about do it. Two members of our board visited some CSAs in California recently and were surprised that they were smaller than we are. But Mark couldn't change a tractor tyre on his own and if you are going to have two full-time workers and set the subscription at a reason level, the scale on which you have to operate is determined for you."59

Purely from the perspective of developing a local economy, it might seem that there is little to choose between a subscription garden which its members own as at Indian Line Farm and Dundalk, or which the workers own, as at Sundrum, or a box system owned by the growers, as with the Deanes. All three solutions appear equally valid because they allow small-scale production to continue in circumstances in which it otherwise would have ceased by eliminating at least two stages, the wholesaler and the retailer, from the conventional distribution chain. They also save on transportation and packaging. Moreover, all three systems give greater scope for job satisfaction than growing for unknown consumers long distances away. Circumstances rather than principle will normally determine which of the three variants, or what hybrid between them, is used initially in a particular community. If an existing grower who already has land and equipment wishes to serve people living nearby instead of an unstable, highly competitive distant market, then a box system is ideal. And if this grower can persuade his or her customers to pay for their vegetables in advance, that's fine. But in places such Great Barrington or Dundalk in which there was no existing grower wishing to convert, consumers hoping to substitute organic vegetables for tired, well-travelled chemical produce and who also wish to stop purchasing power leaking from their community are going to have to act for themselves by renting the land, finding the capital, and recruiting and paying an experienced farmer. And, in such circumstances, they inevitably will have to carry most of the risk themselves as the members of the Philipstown Trust found.

But building a local economy is not just about using local resources to meet local needs - it is also about building the local community and in this respect, a CSA owned by its members is likely to be much more effective than one run for the benefit of private owners with customer involvement being little more than a convenient marketing tool. The Sycamore Co-operative Garden in Julian, Pennsylvania, is typical of many in the US when it states in its brochure that its prime objective is to 'foster the community of people who take seriously responsible stewardship of the land' and relegating the production of 'fresh eggs and organically-grown vegetables, herbs, fruit and flowers' to objective number two. As Timothy Laird puts it in the introduction to his study of 83 CSAs in North America, community supported agriculture 'tries to reconnect people with the land, and to reconnect farmers that are close to the land with the people who eat the food that they grow.... A [CSA] farm grows food not for sale, per se, but for the 'community''60.

The movement, then, is primarily about connecting people and 63% of the growers in Laird's sample said that this was the most successful aspect of their operations. Surprisingly, the benefit one would have expected growers to be most enthusiastic about, the financial stability being a CSA gave them, came a poor second and was mentioned by only 30% of them, the same percentage that mentioned as a gain the fact that they were able to produce organic food. Over half the farmers said that community support was the most critical factor in their success, one grower telling Laird, who has himself managed two community farms, that a CSA needed "an educated and committed group of folks who will see the larger picture [and are] not just out their for their own selves." Others said that the best way to build a committed core group was to develop a sense of ownership among members, exactly what the Philipstown Trust has now done.

Many of the CSAs in Laird's study spoke of the difficulty of giving the grower a living wage, the former grower of a now defunct CSA saying "the time and expertise required to grow the variety and quality needed by members is greater than the members can afford." Another grower commented: "People can't comprehend what it costs to grow food." Despite this, most farms in the sample enabled the less-well-off members of their communities to participate in some way, sometimes by working a fixed number of hours for their share. Philipstown enables people who could not otherwise afford to participate to pay for their subscriptions in the local LETS unit. It spends the units to employ extra labour at peak periods. "It helped us and it helped the LETS," Herr says. "The LETS members had to find ways of earning the units they had spent with us and that re-invigorated the local system."

Early in 1996, the Philipstown Trust was negotiating to buy an old watermill site where a 10kW generator has been installed and is selling power to the national grid. The buildings, part of which run underground, are to be renovated and Herr's company will move in on one floor, its rent covering the Trust's mortgage. The rest of the buildings will be used for as a flour mill, grinding organic grains grown for the Trust by small farmers under contract, and a bread and biscuit bakery, which will produce exclusively for the Dundalk area. The waste heat from the ovens will be used in the subscription garden's polytunnels which will be located on top. "We'll be using our own electricity for power and only using the grid to balance out supply and our demand" Herr says.

Click for 2002 update on the Philipstown Trust by Caroline Whyte

No decision has been taken yet on using the subscription system to help finance any of these although Robyn van En thinks that the approach could be applied outside the agricultural sector: "A local small-scale baker worked out how many bread shares she would need to sell to afford the downpayment on a 40-quart breadmixer. Unfortunately, she did not have all the interest necessary until after her deadline. Someone else has suggested a community-supported auto mechanic: if everybody paid in advance for a tune-up and an oil change, a mechanic would be able to buy the equipment he or she needs." In Britain, in fact, commercial organisations have already used the subscription approach very successully outside farming. The first legal whisky distillery on the Isle of Arran in Scotland for 150 years was opened in 1995 partly funded by the sale of 450 'bonds' which meant that the purchaser would receive five 12-bottle cases of a blended Arran whisky in 1998 and five cases of a single malt whisky in 200161. And as the panel on brewing explains, capital contributions from prospective customers have financed a private, profit-making brewery in Birmingham.

Pubs brew their own beer for only nine pence a pint (click for panel from original book)

THE IMPORTANCE OF LOCALLY-OWNED SHOPS

However many brew-pubs and CSAs are set up, it is not going to be possible for all local products to be sold direct to the customer. Local shops have therefore a crucial role to play if a district is to achieve greater economic self-reliance and it is unlikely that they will be able to do so unless they are locally owned. This is because major chain-stores do their buying centrally and will not be prepared to stock very different sets of suppliers in each of their outlets. As a result, the preservation - and in Britain, where so many villages have lost their shops, the re-creation - of locally-owned retail businesses has to be given high priority. The city of Canterbury does not have a single sizeable shop which is locally owned whilst Dorchester, Thomas Hardy's archetypical market town, retains only two.

Ireland is much better off in this respect. Even tiny Irish villages still have a food store and in Westport, the town where I live, only a video store and a shoeshop are not owned by local families.. But locally-owned retailers are under pressure in Ireland too, particularly in the grocery trade, and this has forced many of them to add less value to the products they sell because they do less to them. The result is that, even though they are still locally-owned, a smaller proportion of the price the customer plays stays within the community. Twenty years ago, Hoban's, with its wooden counters and a system of wires and springs which catapulted money across the ceiling to the office to make change, was the biggest grocery in Castlebar, Mayo's county town. That is, if it is correct to call it a grocery. It had a bakery at the back which was renowned for its pork pies and also made a wide range of breads, fancy cakes and pastries. There was an abattoir at the side, which slaughtered cattle for sale in the butchery department of the shop. "We didn't cure our own hams but we boiled and stuffed them and made excellent sausages and luncheon meat" Art Mulloy, a former employee, told me. The shop also packed its own tea and roasted and ground its own coffee. In short, it was more than a big shop with over thirty employees. It was a food factory too, and since it closed in the mid-1980s, partly because of competition from national supermaket chains but also because none of the owner's children was interested in taking it on, its work is being done elsewhere. Almost all the products the food shops and supermarkets in Castlebar pass over the barcode scanners at their checkouts today are processed and packed outside the town, sometimes on the far side of the world.

It is going to be extremely difficult to recreate businesses like Hobans but Derek Smith, a retired farmer, has established the non-profit Village Retail Services Association, ViRSA, to help communities in Britain to retain or re-open their local shops. His efforts began when, in January 1991, the owner of the only shop in his village, Halstock in West Dorset, was defeated by high interest rates and announced he was planning to close it. Smith and the other 350 villagers were stunned by what they regarded as another stage in their community's decline: their school had been closed five years earlier and before that the church had been amalgamated with seventeen other parishes into a four-priest team ministry and the rectory and glebe land sold.

But the fate of the school and church had been decided by outside institutions. The future of the shop, Smith and his neighbours felt, was in their own hands and they held a series of public meetings to decide what could be done. "At the first meeting, we came to the unanimous decision that we were determined to keep it open" he says."At the second meeting, about two weeks later, we had our plans well worked out, which was just as well because the owner dropped the bombshell that he was closing down in three weeks' time. At that meeting, sixty people undertook to lend a total of 15,000 interest-free to a special company, Halstock Village Shop Ltd., which was to run the new undertaking. Five days after that, the company had leased premises which were converted, decorated, fitted out and stocked in what was left of the three weeks' notice we had been given. The old shop closed on the Friday evening and the new shop was trading on the Monday morning."

The shop was run by a volunteer for six months until a tenant, Brenda Erscott, took over. She put 12,000 of her own money into the operation and sub-rents the premises from the village company (which voted to convert itself to a co-operative at its first AGM) for 60 per week. As a result of a small difference between the rent she pays and the amount due to the owner of the premises, plus her payments for the company's stock, the original investors have been getting some of their loans repaid.

"They were given no guarantee that they would get their money back" Smith says. "The view from the outset was that people should not put up money they could not afford to lose. However, there was always a good chance of recouping half of the money if the business closed and the stock and fittings were sold off."

Although the shop matches supermarket prices on basic lines, it made a net profit of 3,665 on a turnover of 100,000 in 1993 besides paying Erscott a wage. But every penny she got was hard-earned. She opens between 7.30am and 6pm each weekday and also on Sunday mornings. She takes Tuesday afternoon off and employs two regular part-time helpers and another occasional one for a wage-bill averaging 100 a week. "It's hard work and would not really be worthwhile without my Post Office salary of 4,000" she says.

Smith believed that Halstock's experience might be of value to other communities and set up ViRSA to pass along the lessons he had learned. "Only a handful of villages have had any success with shop-rescue operations and fewer still have stood the test of time" he says. "It seemed to me that Halstock had the skeleton of a scheme which could be refined, widened and adapted to provide a repeatable model for other villages. Re-inventing the wheel can be an expensive and time-consuming business and the omission of a few spokes can easily lead to disaster."

The Halstock model has two important features, Smith believes. The first is that people wishing to retain a village shop actually invest money in it, thus guaranteeing that they will give it their trade. "Other methods of pledging working capital such as reverse credit in which customers advance cash to cover, say, their purchases for a month, are less durable because there is nothing to stop people withdrawing from the system by not to replacing their capital after they have spent it some month" he says. "In any case, the amount of money reverse credit will raise is unlikely to be sufficiently large." A community loan to help an existing shopkeeper out of his debts is also unlikely to be satisfactory unless the reasons the business got into debt in the first place are tackled. Too many rural shopkeepers have borrowed so much to buy their houses and shops that they cannot hope to pay their mortgages with what they earn from their businesses.

The second key feature is that the village shop committee actually owns or leases the premises and the refrigerators and fittings in it and finds a tenant to run the shop there. "This enables the villagers to decide who should be their shopkeeper rather than vice versa" he says. "They have the chance of assessing the tenant's personality, retailing ability and financial standing before signing an agreement." Although running a shop with a volunteer staff might be necessary until a tenant can be found, he does not think it realistic for a community to plan to use volunteers to staff its shop indefinitely because people will lose interest. Nevertheless some villages - Letcombe Basset in Oxfordshire is one - have run shops with volunteers for ten or fifteen years.

Smith also advises against appointing a paid manager to run a shop on a village's behalf because the salary the business will be able to afford is unlikely to be sufficient to attract someone of the necessary calibre. In any event, he asks, who in the village is going to have the time and ability to supervise the manager? "Renting gives the tenant the opportunity to make a profit by using his or her retailing skills without making a heavy capital investment in premises. If the tenant fails to make a go of the shop, the village still controls the premises and has the option of keeping them open, perhaps with volunteers" he says.

After establishing ViRSA, Smith carried out a detailed survey of village shops in six counties to try to identify the factors which led to success. He came away convinced that the personality and ability of the proprietor was all-important. "Every shop I visited had a supermarket within ten miles. One shop, with a turnover of 158,000, had two competing supermarkets within a mile. It was run with skill and efficiency by a man and wife and showed the supra-importance of the shopkeepers themselves and what could be done in the face of intense competition."

The second most important factor, Smith found, was that the shop included a sub-post office because this paid the shopkeeper a regular salary and brought customers to the premises. "It may be that in villages with populations of well over 600 people a shop can flourish without a post office but this must be considered the exception rather than the rule" he says.

Given a shopkeeper with retailing skills, a congenial personality and the stamina to work long hours, a village shop and sub-post office can be made viable with a customer catchment of only 400 people provided the community gives its support, Smith says. Such a shop needs a selling area of at least 500 sq ft, a store of 150 sq ft, and should be available for a rent not exceeding 50 per week. Other overhead costs, such as rates, electricity, water, telephone, insurance, accountancy and transport can be expected to total 146 a week. Since a typical village shop makes a margin of 18% on its sales, this means that an annual turnover of 55,555 is required before the shopkeeper gets any return for his time apart from the payment for running a community post office which, if he has it open for twenty hours a week amounts to 4,257 a year. Smith therefore reckons that a minimum turnover of 70,000 is required before a village shop can be considered viable but even at this level, the shopkeeper would only earn 132 before tax and social welfare deductions a week, including his post office wage.

In ViRSA's first year, Smith advised twelve communities on saving their shops. One which followed the Halstock formula to the letter was at Talaton in east Devon where the village store had been caught in a vicious circle of falling custom leading to reduced stock leading to a further fall in trade and had eventually closed after being run by the same family for three generations. "Everyone thought it was too much of an institution to close" one villager commented.

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Page 5 of Chapter 6

Short Circuit by Richard Douthwaite: links within this site

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