Tag Archives: Adam Smith

guy’s newsletter: mixed farming & muddled thinking: battling with a dead man

Between the showers, our neighbours are busy with harvest; watching the grain flowing from the combine harvester, I feel envy and deep nostalgia for the smell, dust, sweat, cider and teas in the field that were the harvests of my youth. When my parents took on the tenancy of Riverford back in 1951, they (like most of their neighbours) kept cows, sheep, pigs, chickens and grew corn, and a lot of grass. Every farm also had its own orchards and cider press. The work was varied, complex, highly seasonal and demanded a wide range of skills and machinery. Managing such complexity was simply the tradition and, some might argue, most farmers weren’t much good at any of it. With rationing still in place and 35% of household income spent on food, perhaps they didn’t have to be.

As the decades passed and food expenditure declined to 10%, one enterprise went after another: first the chickens (“Never did like them much,” says Pa), and then the sheep (“Always looking for a new way to die”). The orchards that once paid the rent were grubbed out, the hedges bulldozed, corn left to those with better land and even Pa’s beloved pigs went; “A conflict of love and money,” he finally admitted. The political economist Adam Smith’s vision was fulfilled as we reluctantly became a specialist dairy farm, expert at turning grass into milk.

I never did much like the irrefutable, soulless logic of Smith and over the last 30 years the next generation of Watsons have somehow reversed the trend, and managed to make Riverford even more complex than Old MacDonald’s farmyard. As well as the cows, between the five of us we have farm shops, a butchery and commercial kitchen, a processing dairy and vast barns packing veg and meat boxes. Meanwhile with 100 different vegetables growing in the fields and polytunnels, my parent’s farm of the ‘50s looks simple in comparison. It feels crazy at times but I love it and reckon we have done an incredible job of managing the complexity with a fair degree of efficiency. It’s all about motivating and managing people; on reflection I’m not sure Adam Smith understood the difference between man and machine.

Guy Watson

guy’s newsletter: feeling mixed up about being mixed up

It always annoys me when we have to buy stuff in. In a childish, probably very egotistical way, I want us to grow it all ourselves. I would even love to brew our own beer, bake bread, run a cookery school, make sunflower oil on the farm in France and more besides. What’s my problem with specialisation, trade and scale? Maybe it’s time for me to get over it and accept that the economist/moral philosopher Adam Smith and his mates had a point; it is stupid to try and do everything yourself.

I have a neighbour near our farm in France who grows 400 acres of baby leaf salad. He is not evil; he uses a minimum of pesticides and artificial fertiliser, supports several development projects in Africa, looks after his staff well, lends his incompetent and chaotic neighbour (me) his machinery and is thoroughly likeable. Over two generations he and his family have specialised in growing a very narrow range of crops at scale, very well. He did even grow organically for a while but could not find a large enough market. The scale and focus has enabled him to invest in knowledge and machinery and to become so competent that he employs fewer people than me on ten times the acreage. The result is that when he did grow organically, he produced baby leaf salads for €3/kg where I need to get €6 to have a hope of breaking even.

So why do I invest so much energy growing 100 different crops and fighting the progression down the well-worn path towards specialisation? Outsourcing everything and becoming a well-marketed brand with a bit of logistics hidden behind would make our lives much easier, so I can’t find any business logic to support my stubbornness. I like farming, love vegetables and like the idea of you cooking and enjoying them knowing that we have grown them. It’s a personal thing, a deep-seated, perhaps prejudiced belief that something intangible is lost with each trade between grower and table. Growing so many of them for you and sharing the stories of our farmers is a part of what makes Riverford tick, so I reckon we will carry on being mixed up to the the end, however that comes.

Guy Watson

guy’s newsletter: complexity, humanity & nature

According to Adam Smith and most classic economic theory, trade harnesses and drives specialisation and generates wealth. When combined with scale and global trade, specialisation also produces fantastic mobile phones and cars. I’m less convinced that it produces good food in an environmentally and socially acceptable way, but the same trends towards scale and specialisation can be seen in agriculture. Here at Riverford we grow almost 100 different crops and run an incredibly complex business doing everything from farming, to running a restaurant, a commercial kitchen, farm shops, a website and making home deliveries. There is no doubt that things would be easier if we just bought in stuff, put our name on it and contracted out the rest of what we do. However this would make us simply a brand and a marketing machine making nothing, just clogging our consciousness with self-serving nonsense.

I sometimes wonder why I so stubbornly resist the pressure towards specialisation and my best answer is that it does not sit comfortably with human nature, at least not mine anyway. We are chaotic, emotional beings with needs that cannot be satisfied without the variety, autonomy and opportunity to grow in our work often found in small generalist businesses. Nature is also chaotic and gains its resilience from diversity. Modern agriculture with its push toward vast monocultures is as likely to produce environmental harmony as a call centre is to produce social harmony. My observation is that the biggest push to specialisation is lazy management, but what we lose through having to manage complexity we can gain by unleashing the potential of our staff through good management.

One of the things that I am proudest of about Riverford is that we are the real thing; a real farm with real people. My brother does wield a meat cleaver and make those tarts, my other brother and sister do chase cows and I do (occasionally at least) grow vegetables when I am not writing this. And yes, I do write it myself.

Guy Watson

Business, ethics + corporate drivel

A vegetable-free rant from Guy.

We recently won the Observer’s Best Ethical Online Retailer award for the second year running, adding to our Best Ethical Business and Best Ethical Restaurant awards, so I’ve been asked to write about ethical business. If you just want the fruit and veg and can do without ranting and pontificating, you’d better turn the page now. Though I am proud of these awards, the term ‘ethical business’, for most large, publically quoted companies is an oxymoron.

Over the last few years I have been asked to talk at a number of conferences on ‘business ethics’, ‘values driven business’, ‘corporate social responsibility (CSR)’ and the pursuit of the ‘triple bottom line’; increasingly hideous expressions that have entered business speak. Few of us would take issue with the idea that business might have a purpose beyond maximising short term profit and most would support the consideration of environmental and social issues in decision making. Unfortunately, because actions are more often driven by the needs of brand protection than by a genuine desire to do anything useful, the effects are normally shallow, short term and depressingly ineffectual in bringing about meaningful change. After attending a few such conferences, I have decided it is more fun talking to the WI about slugs on their hostas than pouring my heart out to a roomful of accountants who just don’t get the idea that the starting point for change might be belief rather than profit.

Since Adam Smith published Wealth of Nations in 1776, the basis for business and capitalism has been an assumption that the decisions of rational individuals are driven by personal greed. We have surrendered to this assumption and the resulting competitive forces have shaped the world around us. In the 80s and more recently in the City, it was even declared that ‘greed was good’, since it drove us to an ever more feverish pursuit of wealth.

I am convinced that unfettered greed will destroy all that we hold dear on our planet and is incompatible with ethical business. I am certain that most people are motivated just as much by the desire to do something useful, to master skills, to be involved socially, to share, and that if we just had the confidence to acknowledge and incorporate these desires at work we would have some chance of business serving people, rather than people being slaves to business. Why is it that, when we step out of the door to go to work, we abandon these values and become slaves to greed? Greed has been supported in its all-pervasive hegemony by capitalism, which moves like an amoebic life form in the background; changing shape to move around, engulf, disparage, corrupt, co-opt and subsume anything that might resist it.

The reason for the rant is not a God-fearing, born again summer of Bible study. It is frustration with how public demands for change from business on social and environmental issues have produced nothing but smoke screens. The pervading argument that change will be driven by customer choice is ludicrous; customers just don’t have the time to do the research and become experts on competing claims, and as a result have been cynically fobbed off with emotive greenwash. Take bio fuels, and bio diesel in particular. It took an interested staff member a week of desk research in 2007 to conclude that (with a few exceptions) bio fuels were bad for the environment and liable to contribute to world hunger, and therefore had no place in an ethical business. So, given the resources of supermarkets and our government, why have bio fuels persisted as part of their environmental message for so long?

Perhaps we have been lucky at Riverford in that the support of our customers has given us the freedom to do business in our own way. But it is also having the confidence to question whether greed is synonymous with rationality. Initiatives start with a desire to be genuinely useful: to staff, to customers, to suppliers or to the environment. Of course most must be profitable and many are discarded, but this is very different from seeking profit and then, as a window-dressing afterthought, trying to appear useful. Until we find a way to displace greed as the main motivator in decision making, CSR will stand for a Complete Shame Really in my book. There endeth the rant.

Guy Watson