Lentil Underground (16 page)

“What are they using them for?” queried Anna, who always seemed to have a question.

“They're processing them for nutritional supplements,” Dave responded.

“Is that really the answer? Processing? Is that sustainable?” Anna's voice quickened and amplified with each word.

But Dave had a question of his own. “What are you eating?” Timeless Seeds' CEO asked his most tenacious board member.

“Potato chips,” Anna admitted.

“That's reality,” Dave continued. “Processed food. Ninety percent of the products that we sold to Taiwan—your flax being one of them—were powdered.”

It was near midnight, but Anna could not go gently into the dark realities of the global food system. With a principled resolve that must have reminded Dave of his own forty-three-year-old self, she shot him a look that said, “I didn't give up my weekends and my life savings to sell powdered flax to Taiwan.” If sufficient local markets for whole foods weren't readily available, then Anna was determined to create them. She was partnering with a young nutrition professor from Montana State, who had already hatched plans to host a series of three workshops for Montana chefs about the health benefits and culinary potential of organic lentils. Meanwhile, Anna and Doug had worked so hard to develop a relationship with their most supportive chef that the woman had given the
Crabtrees the first piece of furniture for their new farmhouse: a baking table. Even farm-to-table wasn't good enough for the Crabtrees. They were so deep into reciprocal relationships with their buyers that they were literally bringing the table back to the farm.

I thought Dave might roll his eyes at Doug and Anna's direct-market evangelism, having been there and done that. But he welcomed Anna's energy, glad that someone other than himself was taking on the lentil underground's grunt work. Still, Dave hoped to shield this younger version of himself from burnout. “Don't you get tired sometimes?” he asked Anna, with a knowing smile. Anna didn't hesitate. “You do what you gotta do to live your dream,” she replied. In this case, what Anna had to do was go to bed, since it was past midnight and the trio had already scheduled a six thirty
A.M.
contract negotiation. By the time the boys rolled out of bed on Monday morning, Anna had already fired up three burners, infusing farm camp with the smell of garlic and the sizzle of cast-iron skillets.

While Dave munched on a veggie scramble, Doug and Anna laid out the terms they wanted to see in their contract. At a minimum, they wanted to get paid on time for their crop—or count on a guaranteed interest payment if Timeless was behind. Similarly, Doug and Anna hoped to establish a contractually stipulated storage fee that would kick in if Dave missed their agreed-on date for crop delivery. Ideally, the Crabtrees wanted to see the Timeless plant run on a predetermined calendar, so they could plan ahead. “Can't we just do a schedule?” Anna asked. “Say, this is when all the Belugas come in, pick your month?”

Doug and Anna's ultimate goal, however, was to get paid based on the number of acres they seeded rather than the pounds of harvested crop they delivered. Although this way of paying farmers was a radically new proposition for wholesale buyers, Anna and Doug pointed out that direct-market consumers had been doing this for decades—through community supported agriculture. Increasingly popular with the local food crowd, CSAs were essentially farm subscriptions, in which the subscriber paid up front for a season of produce and received weekly boxes of whatever the farmer was able to successfully harvest. If individual consumers could afford to share risk with farmers in this way, Doug and Anna reasoned, surely wholesalers and processors could too. The Crabtrees had already negotiated one such contract for their durum wheat—with an organic pasta company. Now they were hoping to do the same for their lentils.

“Frankly, Timeless Seeds is a big reason we decided to do this and do it here in Montana,” Doug told Dave. “We want to see Timeless grow and succeed.”

“But we need a more clear road map and plan,” Anna added, tag-teaming. “Maybe it's just the engineer in me.”

Dave liked the idea of buffering his growers from the layered uncertainties of (1) farming (2) specialty (3) organic crops. But the problem was, Timeless Seeds didn't have enough of a buffer from those uncertainties itself. Because Dave and his three farmer partners had launched the company at a time when organic food was not considered a legitimate business model in Montana, they'd never properly capitalized. Since none of them had money
and banks wouldn't lend to them, they couldn't set up Timeless Seeds as a formal cooperative, even though they were sharing time, money, and equipment. So the Timeless boys had chartered the business as a Montana C Corporation and raised money from friends who'd chosen more lucrative occupations. Those friends—mostly AERO members—had become shareholders in the new “corporation,” whose dividends consisted of a Christmas package of lentils every few years. In the days before Kickstarter, when the Internet was still in its infancy, crowd-funding depended on being able to locate an actual crowd—the very thing north-central Montana was known for
not
having.

Still functioning like a young start-up after twenty-five years in business, Timeless Seeds' biggest handicap was that they didn't have a line of credit. Operating exclusively on cash flow, the shoestring company's only option was “pay as you can,” and certain times of the season were leaner than others. Dave hated to see tardy checks and unpredictable delivery schedules stretch farmers' tight budgets, and he was open to establishing penalties for late payment and delivery. The risk of a CSA-style contract, however, was more than he could absorb. The scale of his growers' operations—determined to some extent by the scale of the farm economy around them, from which they were never wholly independent—was simply too large in relation to the size of his business. “It would be neat to do what the pasta company does,” Dave said to the Crabtrees, “but you've got to have a lot of money to do that. You have to be able to spread it out over lots of growers. It could kill us if a grower got hailed out and we still had to pay them.”

The prospect of a predetermined schedule for cleaning and storing each type of lentil, one variety at a time, posed a similar difficulty. Given Timeless Seeds' limited operating budget, the
company didn't have enough money to buy ahead on its thirty products—or enough warehouse space to store extra inventory. So Dave attempted to schedule deliveries from growers according to orders from buyers, which were maddeningly hard to predict. Restaurants, in particular, tended to place small, mixed orders, which fluctuated wildly according to food trends and consumer taste. Specialty distributors were just one step up the food chain from restaurants, chasing the same trends—and neither were eager to store extra product in their own warehouses, which were often located in high-rent areas like New York or San Francisco.

Timeless Seeds' diverse customer base was part of what made the company resilient, but it was also a source of uncertainty in its own right. Dave couldn't predict when he might get a big order for Belugas, or when the hot crop might be French Greens. So he managed his inventory much the way he'd always run his farm—adaptively. Sometimes farmers made the drive to the Timeless plant on short notice to help Dave fill an order—and more often, they stored crops for a year or two in their own bins while waiting for space to open up at the plant. The whole thing, Dave admitted, was “a big juggling act.”

To be sure, Dave's flexible, somewhat freewheeling approach was baked into his character—this element of his personality was, after all, what had allowed him to go against the grain, succeed as an organic lentil farmer, and develop an unorthodox business. But it was also a survival strategy, born of the constant need to make do with less. Until Timeless had the resources to beef up its operating budget and double or even triple its warehouse space, its CEO had to take things one day at a time.

Meanwhile, Doug and Anna had their own challenges, not the least of which concerned their struggles with lenders. On the list of institutions they wanted to reinvent—equipment manufacturers, trade associations, universities—banks were at the top of their agenda.

“Farm Credit Services, you think they'd provide credit and service to farmers, right?” Anna rhetorically queried Dave, frustration dripping from each word as she recalled the ordeal of buying her farm. “We did this whole six-month process. We were totally clear. We had budgets, we had all the cash flow lined out. Then right before we were supposed to close, they said we can't do this deal. So we went with another local bank to do the guarantee. We went up there thinking we were going to have this great conversation about what we're doing. The loan officer took us into the office, and he says, ‘Why do you guys want to do this? Why do you want to farm?' This is the
ag
lender.”

Once they'd convinced the agricultural lender that farming was a good idea, Anna went on, she and Doug had faced another hurdle. Having purchased a place to farm, they needed at least a little bit of operating credit before they could start seeding. Anna couldn't wait to launch into that story.

“We go to our bank here in Helena, where we have banked since 1999, and we apply for a line of credit for our business,” Anna began. “They say yeah, sure. We get a credit card with a five-thousand-dollar limit and we're thinking that's great, that's all we need, just a little overdraft protection. They never asked us what the business was. So I get home, and I'm doing all the reconciling of the expenses, and I realize, what the heck, they attached it to our personal checking. No.”

Doug interjected. “That was the whole point of getting a business account—to have it separate.”

“So I go down to the bank,” Anna continued, “and I ask what's going on. They say, ‘Oh man, we really messed up.' I'm thinking, yeah, you messed up. So they canceled it and we had to reapply. This time, they asked us what our business was and we said a farm. The application comes back, and the underwriter says, “You're denied.” What? The same exact information, the same people, the same credit—the only thing that changed is it said that it's a farm. They said, ‘Sorry, farming is a prohibited business.'”

“Seriously—I want a T-shirt that says ‘Farming Is a Prohibited Business,'” howled Anna, amused but fuming. “So I looked at the loan officer, and I go, ‘You ask your underwriter who grew the wheat for his toast this morning.'”

Dave readily empathized with Doug and Anna's exasperation, because financial institutions had been a headache for him too. That's what had gotten him in the racket of sourcing “creative capital”: leaning on AERO friends for labor, equipment, in-kind donations, and whatever other help they could offer. The community resource pool had kept the plant's doors open, but Dave had grown increasingly frustrated with the limitations of running a business like a bake sale, his hat perpetually in his hand. “Without money, it takes much more time to get something done,” Dave admitted. “We're in three or four hundred stores, when we could be in three or four thousand, but that requires having a larger inventory to go out and sell those stores on the product. If we run out and can't deliver it, they won't come asking twice.”

Since Timeless didn't have a line of credit, Dave explained, he couldn't build the grower base that would allow him to pursue markets strategically. That would be sticking his neck out too far. So instead, he'd had to play it conservative and stick with the
opportunistic strategy that made it impossible to establish a regular schedule like Anna wanted. “The good news is that we've grown step by step, organically,” Dave told me. “The bad news is that it's taken ten years to get where we could've gotten in three years with adequate funding.”

At the crux of Dave's problem was the fact that the biological time of his plants and the financial time of his markets were not in step. Dave was forever attempting to reconcile these two types of time, to make Timeless a successful business without undermining everything it stood for. With everyone around them barreling along faster than their slow-release nutrients and long-term cropping cycles, both Dave and his growers were always feeling behind.

“It takes a long time to get there,” Doug Crabtree told me. “I had twenty years to drive around and certify and look at what everybody else was doing and conceptualize what we wanted to do, but even at that, it's still going to be ten years before ours is any kind of a mature system.”

“The frustrating part of that to me,” Anna added, explaining how long it had taken to build up enough of a nest egg to even get to the point of tussling with bankers, “is that we had to wait until we were forty to start, so we're going to be fifty before we've actually seen two cycles of our rotation.”

Thinking aloud, Doug estimated that it would take twice that amount of time—twenty years—before the Crabtrees could actually observe the impact of that rotation. “Oh shit,” said Anna's face. “By that point, I'll be in my sixties.” Two weeks earlier, I'd
seen Anna nearly blow her top when a friend mentioned how taken she was with the patient approach of crop breeder Wes Jackson. Jackson had spent more than thirty years working to develop a perennial wheat variety and had recently proposed that Congress scrap its every-five-year agriculture legislation and lay out a strategic plan for the next half century instead. “We have things we can do right now,” Anna had butted in, impatiently. “We don't have time to wait for another fifteen years of research or a fifty-year farm bill.” Anna admired Jackson, but her trouble was that she had a foot in both worlds—the perennial one underground and the annual one above it. As her mounting frustration approached full-on folkloric tragedy, I worried Anna might pull a Rumpelstiltskin and tear herself right in half.