Saturday, November 03, 2007

Alpacas: the Windmills of upstate New York?

When we used to drive to Palm Springs in the 1980s, I remember thinking how odd all those "windmill farms" looked along Interstate 10. I vaguely recall understanding that we had to wait in long lines for gas in the 1970s, and that was somehow related to President Carter's administration giving tax credits for alternate energy sources in the 1980s.

As a kid, my gut perception was that those funny windmill farms were the result of some dumb government policy, and that they probably didn't actually do much but serve to make some smart, rich people even richer. I mean, if they were such great energy sources, why wasn't the desert covered with them? Something seemed fishy. And it still does, to me. As an adult, those windmills stand out in my mind as some crazy thing that people do to avoid paying taxes.

Well, I've discovered the Upstate New York analog to the 1980s California windmill phenomenon- ALPACAS!!

Question: How many alpaca farms do you know of, within 100 miles of where you live? Well, our area seems to be flush with them, so I did a little digging to try and explain this fact.

It seems that alpacas- the llama's cuter cousin from South America- offer not only tax incentives, but a bucolic way of life for the retiring baby boomer generation. Apparently, you can retire to a cheap, naturally-beautiful place like Upstate NY, write off your house and property as a "hobby farm," depreciate the livestock and claim your property as some sort of agricultural/farmland, all the while living with these easygoing, low-maintenance creatures. (That was a gross oversimplification but you get the idea.) One website even calls alpacas "a hugable, lovable investment." Another guy says that, while his stocks dried up when the market crashed, his alpacas are still around, keeping him warm.

But here's what else I found: it seems that the bulk of the earnings on an alpaca farm come in the way of breeding and selling to other alpaca farmers. A giant alpaca-ponzi, if you will. There is actually a fair amount of concern that there is an "alpaca bubble" and that, unless the industry and build a much bigger market for the fur/fiber the animals produce, the ride may soon be over.

Alpacas may soon join their friends on the llama, buffalo, ostrich, and emu farms- that is, in retirement from the topsy-turvy world of an entire industry based on an oddity of our national tax policy. (Apparently alpaca meat = not too tasty.) Makes me wonder if John and I will find ourselves retiring to some crazy "killer bee farm" or whatever is the "flavor of the decade" for random tax breaks to build your entire life around!

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