Frederik Lean Hansen – Small individual farms are probably not the future of farming in Europe

A wide-ranging conversation with Frederik Lean Hansen, a regenerative farm business consultant who spent a year traveling and working on 12 farms alongside regenerative farmers across Europe. He is currently active as a Farm Finance genitor and is now starting his own silvopastured poultry enterprise on his parents’ farm in Denmark. We discuss topics such as finance, CapEx, OpEx, income statements, and cash flow, as well as the myth of small-scale farming and whether economies of scale truly matter. Fred shares insights on how farmers can organize together to access better markets, run more financially successful businesses, and improve their quality of life. We also delve into the importance of inner work, which is often neglected in our sector—or any sector, for that matter.

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Fred worked on many regen farms along with farmers in Europe, not as a volunteer in his twenties, but as a professional with experience in his thirties, actually giving financial advice and helping farmers get clarity on their finances, which is so important.

THE ECONOMICS OF SCALE ARE FUNDAMENTAL

Frederik suggests scaling up to overcome financial challenges in small-scale farming. Small farms require diverse skills, including business acumen, mechanics, and animal knowledge.

”The first thing is probably to just consider scale, right? Be big enough. You don’t have to be 500 or even 1000 or whatever hectares, don’t need to be that large, right? You could be smaller, but just big enough so that you can afford some overhead. I think that would be context-dependent, right? But I’ve been pondering this question quite a bit. I haven’t, I think, found the perfect answer. I think it’s probably impossible to find the perfect answer, especially across the board, right? You would have to really get into each context.” Frederik Lean Hansen

”It’s really hard to make the economy stack up on the small farm. I mean, I’ve seen so many people now that are really struggling with it and have been sort of, I’m not going to say, sort of lured into it, but they’ve definitely been romanticising this idea. Yeah, and it’s not just that there are small farms that can—I mean, stop to say that small farms can work. They definitely can, but it’s difficult to follow this narrative that you need to be a solo entrepreneur. You really need to do everything yourself, right? Okay? You need to have a market garden. You also need to have, like, I don’t know, ducks, or you have, you know, snails, or, you know, there’s all kinds of things you need to manage at the same time. And you also need to be the sales guy. You need to be the accounting guy. There’re so many different things that you need to do in a small enterprise.” Frederik Lean Hansen

ORGANISING FARMERS TOGETHER IS CRUCIAL IN COOPS OR NOT

Fred explores the idea of organising farmers into cooperatives to share resources, processing, and land acquisition.

”He speaks about his journey, right from having started a small farm and just burning out on that, and then looking into “Okay, what can we do?” There’s possibly no need to reinvent the wheel. I mean, many, many farms, even from the 1800s, right, they gathered in cooperatives. And there’s a reason why that worked. You share the resources. It allows for specialisation, to some extent, without having to, you know, give up on biodiversity or even multiple enterprises, etc., on your own land, right? But you can take a bigger piece of the supply chain that you, kind of co-own with other farmers, etc., right? And it’s not a coincidence that you have quite big corporations today that are actually cooperatives, right?” Frederik Lean Hansen

QUALITY OF LIFE IS ESSENTIAL

Fred shares their experience of working on a farm in the UK and Spain and how it improved their quality of life.

”I got into the habit of doing physical work in the morning, walking around, lifting things, and, just being around animals, being around plants. And I really love that. I really, really enjoyed that division of the day and kind of getting all this kind of like borderline ADHD energy out of my body, and then, or let’s say, full-scale ADHD, whatever, getting that out of my body, and then gave me much more calm to be, to be more focused when I was then doing office work, right, and it just made me sharper, like I’m able to do so much more work in a short amount of time than I was before, just because I have done physical labour in the morning. Literally just works for me in that way. So, I wanted to kind of continue that.” Frederik Lean Hansen

HAVE A FARMER ON YOUR AGTECH TEAM

The farmer’s voice must be prioritised in technology development to ensure success.

”If we go into the bit more ‘’classic venture funding or venture investments’’, I just think that from what I’ve seen now, it’s really important that on the team, and probably not just on the board, you have people who have done and probably are doing actual farming, because the devil is just in the details. There are so many things that you could easily build, like a piece of technology, for instance, that looks great on paper and, even logically, makes a lot of sense. […] There are so many, I guess, smaller things that really make a big difference in how, you know, the value will actually end up being created for the farmer to take that perspective, right? So, I think really be eminent about making sure that the farmer’s voice is really represented well and has a say in the decisions that are being made.” Frederik Lean Hansen

SECRET PIGS

Passionate farmers may ignore analysis for love of pigs, leading to creative solutions.

”I guess it goes into one of the great joys of working with farmers who are really passionate about what they do. Even if you make a great analysis and find out, actually, you know what, it doesn’t really work to have pigs in this way on this farm. Then sometimes, just because the farmer really, really loves pigs, they’ll be like, don’t tell Fred. Don’t tell Fred. We’re going to get pigs, yeah, because we love pigs, like it’s just going to do it anyway, and somehow, I just love that. It’s really, it’s kind of heartwarming in many ways. And, okay, fine, we’re going to see what we can do to make it work as well as we can. Then, if you love pigs, great.” Frederik Lean Hansen

OTHER POINTS DISCUSSED

Koen and Frederik also talked about:

Focus on education and land access
Creating a platform for farmers to share resources and knowledge
Mindset, and farmer success

LINKS:

LINKED INTERVIEWS:

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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agriculture cooperatives economics farm finance finance food silvopastrure small scale