Environmental Sustainability Drives Student Interest in Farming

Sustainability now also means treating farmworkers well, an avocado grower tells MBA students interested in food and agriculture resource management.

January 28, 2012

Is it bad to eat meat? What incentives help people manage land in sustainable ways? What kind of agriculture works best in developing countries? Why are avocados so expensive?

About 100 students at Stanford’s Graduate School of Business have formed the Food and Agriculture Resource Management Club, or FARM Club, to explore these questions.

The club was started in spring 2010 by students who wanted to know more about careers in agriculture, said Michelle Paratore, Class of 2012, one of the club’s presidents. Some want to work for companies that sell healthy food, for example; others want to learn more about investing in farmland. Although many of the members are also interested in food issues in their personal lives, the club’s focus is on the industry and careers.

One of the club’s regular activities is hosting guest speakers. Recently, members heard Jamie Johnson, a fourth-generation California farmer who grows avocados at Rancho Simpatica in Fillmore, Calif., explain the challenges facing his industry. Johnson’s farm produces 5 million to 8 million pounds of avocados per year, a small percentage of those grown in California. Johnson is also vice chairman of the Hass Avocado Board and a member of the California Avocado Commission Marketing Committee.

Stores that sell avocados face high risks and high rewards. Profit margins are high, and consumers who buy avocados tend to buy other products as well. But avocados go bad fairly quickly, so grocers risk losing all their investment if the avocados don’t sell.

Like other California farmers, avocado growers struggle with the scarcity of land, water, and labor, Johnson said. Farmland prices in the United States are at historic highs. California’s water battles, which pit urban water users against rural, and northern California against southern, have not been resolved — and avocados require a lot of water to grow in California.

Finally, labor costs are an issue. Johnson said he takes pride in paying fair wages and providing health care to his workers. But increasing government attention to the immigration status of farm workers is making it more difficult to find workers to pick the crops.

The upside to growing avocados in the United States is that the market is growing. Area growers are looking to the food service industry for increased sales.

Johnson gave students a look at other trends affecting the avocado industry.

For example, he is working with the Hass Avocado Board, which is funded by an assessment of 2.5 cents per pound of avocados produced or handled in the United States, to market the health benefits of avocados. One of the group’s goals is to support research showing the health benefits of avocados, since without proof they can’t make health claims.

“I know I have a product that’s a super food. I know that if you eat an avocado, its good for you. But how can I prove that?” Johnson asked.

A boon for sellers in recent years has been the ability to ripen avocados before selling them, in much the same way that bananas are ripened before sale. “The ripening process changed our business,” Johnson said. “It allows us to sell a whole lot more avocados.”

The current focus on organic and sustainable food is also changing demand. Johnson said it’s not clear that consumers are willing to pay the extra costs required for organic food. He is, however, seeing a trend toward sustainability, which includes treating farm workers well and maintaining good relationships with the community. “People are demanding that not only is their food safe and regulated, but also that they’re treating people humanely,” he said. In addition to consumers, some large buyers are starting to demand this,

Johnson also said efficient farming — in which farmers get the highest nutritional output for the least expenditure of water and other resources — is likely to become increasingly important.

By Margaret Steen

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