John Mesko of the Sustainable Farming Association (SFA) introduced the New Farm Reality Check, a farm business planning curriculum, at the Midwest Rural Agricultural Safety and Health conference held at Ankeny, Iowa on November 19-20, 2014.
I was listed as a co-presenter of the project because I serve on its Advisory Committee but John is the brains behind this innovative approach to making farming outcomes more predictable and sustainable.
Funded by a North Central Region Sustainable Agriculture Research and Education grant, the project is in its third year and has completed two of four planned phases: 1) identifying the causes and range of farm difficulties and 2) developing the elements of a farm business curriculum to support beginning farmer education and to assist existing farm enterprises.
During the first phase, the SFA staff surveyed 200 farmers of all types from the Upper Midwest, but the sampled population was concentrated in Minnesota. The surveyed persons included large-scale livestock, crop and dairy producers, small vegetable, fruit, poultry and livestock entrepreneurs, organic and conventional operators and some farm business people whose enterprises had failed recently.
Forty farmers and farm families were selected from the surveyed group for extensive interviews to expand on the causes and range of problems they encountered and to identify what they learned and wished they had learned that would have made their enterprises more successful and satisfying. The farmers selected for interviews validly represented the larger survey sample.
Most surveyed farmers (71%) intended their farm business to provide a full-time income, but 54% reported making less than 25% of their net income from farming. Fully 69% of the surveyed respondents said they were not satisfied with their farming income and 62% were not able to pay themselves or family members a salary for working on the farm.
Three quarters of the sample did not predict their farming experience when they started and 75% changed goals since they started farming. Clearly, better farm business planning was needed.
Farming is more stressful and uncertain than they had predicted, the respondents said. They made recommendations about what needs to be considered when developing a farm business plan:
- Acquire a basic understanding of soil literacy to develop reasonable expectations for land acquisition, production and mitigation of production issues
- Identify progress goals, and benchmarks, consistent with realistic expectations and build them into the business plan
- Identify indicators that signal exiting the business, including retirement and succession components when appropriate
- Indicate the basis for each assumption in the business plan, such as: a) what products will be raised, b) what is expected, c) plans for expansion or retraction, and d) who will carry out these functions
- Understand basic employee management
- Build a team, including family, laborers, friends, supporters of all types, professionals and experts to provide advice, expertise in areas of insufficient knowledge, and include an “honest” skeptic
- Identify opportunities for building relationships and markets within the surrounding community
- Identify life patterns (relationships and behaviors) contrary to achieving farm business success
- Develop up to three alternative schemes in addition to the primary plan to achieve success
- Develop a plan and expectations for the number and timing of children coming into the family
- Establish clear roles for family members, while recognizing family members differ from employees
- Develop a website with information about the operation, and include links to markets for the farm products
The third phase of the project is delivering the curriculum. John will deliver the curriculum for the first time in conjunction with the upcoming Minnesota Organic Conference on January 8, 2014 at the Rivers Edge Convention Center in St. Cloud.
Registration for the workshop can be undertaken on the Minnesota Department of Agriculture website: www.mda.state.mn.us.
The curriculum is available for presentation at various farmer meetings in the future. Interested persons may contact John by telephone at 763-260-0209 or by email at [email protected] There are short (2-3 hours) and long (4-7 hours) versions of the course.
The fourth phase of the project involves follow-up assessment over several years to determine the impact the New Farm Reality Check business planning program has on farming profitably, sustainably and safety. Comparison with a control group will be undertaken.
Particular attention will be given to assessing strengths and hampering factors, which may lead to adjustments in the curriculum.
Additional consideration will be given to a number of matters, including farm location, land acquisition, buildings and equipment, traffic, wildlife, financing, insurance, safety considerations, and certified safe farm evaluation leading to possible reduction in insurance premiums.
Farmers without a business plan, especially beginning farmers, and those with a business plan but who wish to review their operation may want to consider scheduling a New Farm Reality Check event in their area or contact the Sustainable Farming Association (www.sfa-mn.org) for information about an upcoming presentation of the curriculum.