Final report for GNC20-306
Small-scale farmers are currently in a state of financial vulnerability. Approximately 91% of U.S. farms are classified as small with a gross income of less than $250,000. About 60% of these small farms are considered very small, generating less than $10,000 and are most vulnerable as they exhibit high turnover rates. Small farms are vital to community vitality as they can lead to: increased revenue in the local economy, utilization of cropping systems that support high biodiversity and access to nourishment for local communities. One of the most prominent barriers for beginning small-scale growers is maintaining sufficient level of income. Higher levels of education correlate with success and a grower’s ability to receive the same or better wages as compared to an off-farm job. In addition, business can better prepare students for their careers by improving the qualities, skills and attitudes needed for success. Unfortunately, there are very few studies that report what kind of education beginning farmers need to have the business skills that keep a farm profitable. Furthermore, none of them address the needs of beginning small-scale produce growers. The objectives of this study are to:
- Define the business skills that successful and unsuccessful small-scale farmers view as necessary to be profitable.
- Prioritize business and finance skills based on grower feedback to inform business education curricula.
- Examine the perceived needs between successful and unsuccessful small farm operators.
- Disseminate the results of the study to the Growing Growers program and other educators in the region in order to strengthen their curriculum.
The objectives of the project will be achieved through a series of focus groups administered among both successful farm businesses and farmers who are no longer farming due to financial hardships. There will also be an online survey through Qualtrics that will be delivered to small-scale growers including beginning and experienced farmers. The feedback obtained from this study will provide a better idea of what farmers need in business education in order to stay financially viable. These farmer-informed data will help educators better serve stakeholders and improve profitability of beginning small-scale produce growers.
- Knowledge of skills required for business management as defined by farmers
- Knowledge of what skills farmers find most important
- Data to improve the Growing Growers curriculum or other similar programs in business education
- Identification of farmers in the region who are experts in business management
- Development of new business education curriculum in the Growing Growers apprenticeship program from project data
- Beginning farmers in the Kansas City region gain knowledge from the business education curriculum that was identified by successful farmers.
- Beginning and small-scale farmers utilize the skills learned from the Growing Growers program to become more financially sustainable
- Other apprenticeship and training programs in the North Central region and beyond develop curriculum based on the results of the project
- Beginning small-scale produce farmers are more profitable
- There is a greater retention rate amongst new farms in the region
- Small-scale farming is perceived as a more viable option for young entrepreneurs
- There are more successful small-scale farms that grow produce in diversified cropping systems
- Access to local produce for at-risk and other communities is increased
Materials and Methods
A mixed methods research design of quantitative and qualitative data collection was used in this project. The study was adapted to be conducted exclusively online so that participants did not need to meet in person due to circumstances surrounding COVID-19. An online survey was conducted among individuals who identified as small-scale specialty crop farmers in Kansas and Missouri. Multiple choice and Likert scale questions collected quantitative data that helped assess farmer perception of business skills. Qualitative data was obtained through a series of four focus groups that conducted among 24 previous and current small-scale specialty crop farmers who met a specific set of criteria. This study incorporated synchronous and asynchronous online focus group approaches to utilize the best qualities of each format. Each group participated in a series of asynchronous discussion board posts and a synchronous 90-minute video conference meeting.
The web-based survey instrument was conducted electronically through Qualtrics in the fall of 2020. Advertisements for the survey were posted on key partner organization social media outlets and emailed to the Growing Growers listserv. A drawing for gift cards and prizes was utilized to incentivize participation. Participants included any Kansas or Missouri farmer who self-classified as a small-scale specialty crop grower with any level of experience and were age 18 years or older. Of the 106 total responses collected from both survey and focus group participants, 91 responses were used in the final data analysis, including demographic information, because respondents who had no farming experience were removed from the final analysis. Since the focus group participants took the same survey, their answers were aggregated into the final total and responses were cross-referenced to ensure there was no data duplication. The total number of responses for the Likert scale questions differed from the demographic section due to nonresponse.
The survey was performed using an online software program (Qualtrics XM; Qualtrics, Provo, UT) to collect information directly from specialty crop farmers that could identify and prioritize business and finance skills that they valued in business education. The survey consisted of 8 questions that included multiple choice, Likert scale questions and an optional fill in the blank question. The demographics section asked respondents to choose the answer that was most applicable to them out of a series of choices. Questions included gender, zip code, farming status, experience and highest level of education and business education.
All focus groups were conducted online allowing for researchers to recruit participants from the region. A combination of critical case sampling and snowball sampling methods were utilized to recruit 24 farmers. Farmer demographics needed to align with the research study’s objectives and be most characteristic of “financially successful/viable” farmers or “financially unviable” farmers, which included “former farmers” that were defined as individuals who went through formal farm training and are no longer farming or not farming as a business.
The recruitment process began in the fall of 2020 via email using contacts from the Growing Growers KC contact list, Johnson County Community College’s Sustainable Agriculture Program list and Kansas Specialty Crop Growers Association member list. The project provided a monetary incentive ($50 per hour for five hours) to compensate focus group participants for their time. A total of 26 out of 34 farmers contacted from critical case and snowball sampling methods responded to the recruitment letters, for a response rate of 76%. Two farmers ended up having scheduling conflicts resulting in a final sample size of 24. A total of four online focus groups were conducted during December 2020 and January 2021. All participants signed informed consent forms before the focus groups began. Due to the sensitive discussion topics of business and finance, participants were assured that all data collected was stored anonymously and confidentially.
Each group had a homogenous sample size of 6 participants as this is one of the most frequently used sizes among focus groups. The groups were heterogenous in farmer background, experience and inclusion criteria to allow for within-group comparisons. Individuals were randomly assigned to groups as much as possible given each participant’s scheduling constraints.
The focus groups consisted of a multi-day asynchronous forum through Focusgroupit combined with a synchronous 90-minute video call through Zoom. The video call was conducted after a 2-day buffer following the initial forum discussion. A final day of asynchronous forum discussion followed after the video call. During the asynchronous discussions, participants were assigned random usernames to maintain anonymity. All focus group participants took the same online survey that was administered in the quantitative portion of the project to obtain demographic information prior to starting the study.
To fulfill the research objectives of the study, it was important to compare responses to the survey based on the respondent’s self-reported demographic characteristics. In order to do this, specific categories of farmers were developed for analysis: (i) beginning and experienced farmers; (ii) full-time farmers and part-time farmers and (iii) farm owners and farm employees. Survey responses from an additional group of “former farmers” were examined via qualitative analysis only due to the low sample size. Different types of analysis were performed on the qualitative and quantitative data. Qualitative focus group transcript data were coded and analyzed for thematic patterns using grounded theory to develop theories based on data collected. Quantitative survey data were analyzed using non-parametric statistics to obtain frequencies of demographics and Likert rankings.
Data obtained from the surveys were analyzed using non-parametric statistics to obtain frequencies of ordinal and nominal variables from the sample group. The non-parametric equivalent of an Independent-Samples T Test (aka Mann–Whitney Test) were performed on the rankings of business skill importance and satisfaction of resources data among the different types of farmers. This method was used to see if the rankings of skills and resources varied across the different categories of farmers (beginning vs. experienced, owner vs. employee and full-time vs. part-time). This was accompanied by the Mann–Whitney–Wilcoxon Test to determine which means were significantly different from others. All quantitative data was analyzed through the IBM SPSS Statistics and Microsoft Excel Analysis ToolPak (SPSS Version 27, 2020; Excel Version 16.43 2020). There was an option for respondents to specify a skill that was not on the survey using an open-ended response. These answers were analyzed qualitatively by coding responses and categorizing themes through NVivo for Mac (NVivo for Mac Release 1.4 2021).
Verbatim notes from asynchronous focus groups were available in text format as the synchronous focus groups were video recorded, and audio was transcribed verbatim by an online transcription program. All data were imported into the software program NVivo for Mac and analyzed using content analysis (NVivo for Mac Release 1.4 2021). Transcripts were first read through to become familiar with the content and subject matter. Open coding was then used to link portions of text within each focus group question with themes of business skills and courses. Next, these codes were categorized by grouping and classifying in order to identify patterns relevant to the research objectives which also resulted in frequencies of reoccurring categories. To ensure validity of the data, consensus coding with interrater reliability helped to produce a more valid description of the data. To address the confirmability of the study, transcripts of participants were compared with one another to ensure the prevailing themes fit a pattern.
The survey was composed of demographic- related multiple-choice questions and a Likert scale question where respondents indicated perceived importance of skills and satisfaction of resources. Focus group respondents also provided lengthy discussions of topics surrounding business education including skills, obstacles, desired courses and resources. Themes identified in the study are based on the study objectives to define and prioritize business skills and examine the perceived needs of growers.
A total of 106 responses to the electronic survey were collected for demographic information which includes the focus group participants, however, only 91 responses were used for analysis in the study, including respondent demographic information because respondents who had no farming experience were removed from the final analysis. The majority of participants were from Kansas (67% of survey respondents and focus group participants) and are located within 50 miles of Kansas City (69% survey, 88% focus group).
The majority of survey respondents having less than 10 years of experience (60%) and the majority of both survey respondents and focus group participants were female (60%, 58%) and farm business owners (76%, 83%). Based on data from the USDA Census of Agriculture, the survey sample differs from the total U.S. population of specialty crop farmers in terms of gender and years of farming which nationally are 62% male and 64% have farming experience of 11 years or more (USDA NASS, 2017). Survey respondents were asked to indicate their highest education level and approximately half of respondents had a 4-year degree (48%) and a quarter had at least a graduate degree (25%). When comparing years of experience with education, 72% of experienced farmers and 75% of beginning farmers had a 4-year degree or higher. Similarly, 77% of farm owners and 70% of employees had at least a 4-year degree.
Survey Results: Important Business Skills Question
Participants in the survey were asked to rank using a Likert scale the importance of a series of skills that are common to standard business education curriculum. For the purpose of analysis, an important ranking is assigned a 3, neutral is a 2 and unimportant is a 1. Although the majority of participants ranked these skills as important, human resources had a mean score closest to neutral at 2.28 and almost half of respondents (49%) indicated a neutral response. Credit access was the second lowest with a mean score of 2.46 and 41% of respondents indicating a neutral response. At the highest end of the spectrum, recordkeeping had a mean score of 2.96 with 96% of responses ranking it as important followed by financial management and marketing which both had a mean score of 2.92 and 92% of responses rating it as important. Rankings were statistically compared between different types of farming groups. Descriptive statistics showed experienced farmers ranked all skills as more important than beginning farmers. However, a Mann–Whitney Test was performed and there were no statistically significant differences among the means of the importance scores of beginning and experienced farmers.
Focus group respondents answered the same skills importance question as the electronic survey. They answered similarly to the overall survey participants in that all skills were ranked as important with the exception of credit access being neutral. There were no statistically significant differences in responses for skill importance among the different groups of farmers in the focus groups.
Survey Results: Farm Business Skill Resources Available Question
Survey respondents ranked their satisfaction with resources available on the various business skills. A satisfied ranking is assigned a 3, neutral is a 2 and unsatisfied is a 1. Unlike the business skill rankings, the level of satisfaction of resources was much more varied. All resources had a mean within neutral limits; however, the percent of responses was divided among satisfied, neutral and unsatisfied more unevenly. Marketing was the only skill split almost evenly among satisfied, neutral and unsatisfied but all other skills had the majority of responses being neutral or unsatisfied.
Rankings were statistically compared between different types of farming groups. When the Mann–Whitney Test was performed among beginning versus experienced farmers, median resource satisfaction for accounting, financial management, tax management, farm law and human resources were statistically significant. Median resource satisfaction for accounting was statistically significantly different at U = 491.5, z = -2.354, p = 0.019. Experienced farmers had a higher mean rank (x̄ = 2.10) than beginning farmers (x̄ = 1.73) and median resource satisfaction for financial management was statistically significantly different at U = 478.5, z = -2.499, p = 0.012. Experienced farmers had a higher mean rank (x̄ = 2.07) than beginning farmers (x̄ = 1.67) and median resource satisfaction for tax management was statistically significantly different at U = 393, z = -3.431, p = 0.001. Experienced farmers had a higher mean rank (x̄ = 1.93) than beginning farmers (x̄ = 1.38) and median resource satisfaction for farm law was statistically significantly different at U = 479, z = -2.52, p = 0.012. Experienced farmers had a higher mean rank (x̄ = 1.9) than beginning farmers (x̄ = 1.46) and median resource satisfaction for human resources was statistically significantly different at U = 521, z = -2.121, p = 0.034. Experienced farmers had a lower mean rank (x̄ = 1.52) than beginning farmers (x̄ = 1.79). There were no statistically significant differences among the means of farm owners and employees.
Focus Groups: Business Skill Needs Identified
For the focus group (qualitative) portion of the study, the frequency of recurring themes were compared among types of farmers in the focus groups. Unlike the survey, participants were not given a list of skills to choose from and skills identified originated from the farmer’s own thoughts and ideas. All skills that were in the survey were also brought up in the focus groups but there were some that were categorized differently. In an attempt to simplify the number of themes identified, certain themes were grouped together because they were often cited in conjunction with another skill. In the focus groups, human resources was grouped with labor management, risk management was grouped with business management and credit access was synonymous with access to capital.
Of the 24 participants participating in the focus groups portion of, 13 were experienced farmers, 6 were beginning and 5 were “former farmers” (FF) which included individuals who received formal farm training and are no longer farming or not farming as a business. There were nineteen recurring themes for the most important skills to a specialty crop operation. Among the top five most frequently cited skills that are most important to a specialty crop farm business were marketing, business management, labor management, budgeting or finances and business planning. The top 10 identified skills overall were the exact same for the experienced farmer group but for beginning farmers, only marketing was similarly ranked as a key skill at number 1 with the remaining theme rankings differing slightly. As part of the qualitative analysis, a third group was also examined which was former farmers. This was the smallest group, and their top skill identified was recordkeeping. Another top skill of former farmers included land management which was not in either of the other groups’ top ten skill needs.
Focus Group Themes: Obstacles
During the focus groups, participants were asked to identify and describe their biggest obstacles to profitability as specialty crop growers. Participants were not given a list of obstacles to choose from and a total of 18 themes were created based on discussion responses. The most cited obstacles were labor and markets/sales which were mentioned a total of 40% of the time during the discussion. Other obstacles included access to capital, lack of knowledge, infrastructure, land, profitability, regulations and weather/climate change.
Labor was one of the most cited obstacles across all types of farmers. Among beginning and former farmers, not having enough time to complete daily farming tasks was a prevalent obstacle. One former farmer described labor obstacles as, “Juggling running the farm with managing the administration of the farm is one of the biggest challenges. There are so many tasks to DO that it can be easy to postpone sitting down to manage the admin…yet, if you don’t manage the admin side you can easily decrease or even threaten your profitability…having the discipline to stop while there is still light out to manage the admin is always tough. The flip side is having the energy to keep going at night to get it done after daylight is done can burn the candle at both ends and wasn’t sustainable for me.” Experienced farmers cited different forms of labor obstacles as one explained, “One of the big challenges for us is to be able to retain that quality employee from season to season. We don’t employ anyone year-round. For about eight months we have employees that have a regular schedule…But the challenge arises when you find that quality person is to be able to give them enough hours to make sure they’ll stay with you, bring them back.”
Some of the biggest challenges cited surround the obstacle of markets and sales included fluctuating markets, retaining and surveying customers, balancing pricing and volume of sales with different buyers (direct vs. wholesale) and using social media or online platforms to market. One experienced farmer gave their viewpoint on why beginning farmers may have difficulty with this, “One thing I see in younger starting individuals is that they see a particular crop as being very profitable and plant a lot. Then come harvest time they find out that their outlets for said product is very limiting in demand. Nothing worse than raising a good crop and not being able to find a home for it.” Among experienced farmers, finding the most profitable market was a challenge as one stated, “I would say on our end, some of the risks in terms of wanting to grow our farm more are access to strong markets for products. In particular, I especially think of the organic crops we grow. I think about larger scale wholesale [markets] around here. There’s just not a big market for it.” Another theme was finding the right market and finding customers as one beginning farmer stated, “So I think I would say the biggest thing is that it can be a challenge to identify your ideal customer base and take the time to establish it. People expect transparency from farmers now and establishing that image and trust takes effort away from food production.”
Access to capital was the third most cited obstacle and was commonly expressed among both experienced and beginning farmers. One experienced farmer talked about their experience with the need to take out loans, “I leveraged our assets quite heavily to rapidly expand our farm during that same time. With equipment, land, and operating loans open, one thing that ate up our cash vs profit (although was financially planned for) was loan payments and interest expense. It can be something that is easily looked past when working on capital budgets, especially when market rates on operating notes change regularly.” A beginning farmer expressed similar challenges, “I also think that there is a gap between profitability as a small-scale farmer and that of a mid-size farmer for vegetable production. Finding efficient ways and techniques to scale up without having to over-extend yourself with investments in equipment/personnel/inputs/post-harvest processing and handling/etc. is tough when trying to increase acreage or add a new market or distribution channel.”
Focus Group Themes: Desired Business Courses
In the focus groups, participants were asked to describe their most desired business courses. Participants were not given a list of courses to choose from and a total of 17 codes were created based on discussion responses. The top desired courses composed of 54% of all themes mentioned and included financial planning, legal/farm law/taxes, hiring professionals and accounting.
Focus Group Themes: Resources Utilized
For the qualitative analysis, focus group participants were asked to describe their top resources where they obtain information. Participants were not given a list of resources to choose from and themes were created based on discussion responses and were of their own opinions. Thirteen themes mentioned were analyzed to show frequencies of recurring themes. The most popular resource was peer support and networking which was brought up 23% of the time during the discussion among all farmers. Other resources that farmers looked to included formal training programs such as the Growing Growers program and JCCC’s sustainable agriculture program, as well as conferences and events, the internet, mentorship and books.
Focus Group Discussion: Definition of Business Education
All focus group respondents were asked how they defined business education and what its role played in relation to specialty crop farming. While there were many different responses, many shared some similar words in their definitions. A word frequency analysis showed the top occurring words included skills, training, management, marketing and accounting.
Many of the participants discussed that business education’s purpose is to provide training or competency in running a farm business efficiently and that it should be comprehensive or broadly focused. It was also mentioned several times that business education pertained to everything but the growing and cultivation aspect of farming. As one farmer stated, business education encompasses “Basically, everything that isn’t the actual growing or producing of the specialty crop.”
There was heavy discussion that curriculum should incorporate real world applications so that the knowledge learned could be used directly into their own operations. One experienced farmer summarized this belief with “getting to work with real world examples (even if old data, being able to look at and review real financials and books from companies both big and small [names can be changed], be given real world problems (such as crop enterprise budgets or short/medium term capital budgets) to work through that relate to decisions the farm was making at that time (how to price lettuce, can we justify a vacuum seeder [does it pay for itself in labor savings], how do we extend our income season with season extension without blowing our labor budget, etc.”
Participant’s definitions were thematically coded for important subjects included in specialty crop business education curriculum. There were 20 emergent themes of core subjects in business education cited among the study participants. The top five themes made up almost 50% of all total themes which included finances and economics, accounting, business planning, marketing and legal knowledge. Many of the subjects cited were also topics in other themes such as skills and obstacles. Participants were asked to give their definition of business education once throughout the study and it was deemed that there was an insufficient number of themes to run any statistical analysis among the different types of farming groups.
This study provides new insight into the relationship between small-scale specialty crop farmers and business education, and to our knowledge, it is the first report on this topic. The financial vulnerability of specialty crop farmers is indisputable as 60% of Kansas producers and 57% of Missouri producers earn less than $10,000 a year (KDA 2017; MU 2017). Additionally, the decline in the number of farms and farm workers are resulting in fewer small-scale farms than ever. If the lack of an educational resource prevents a farmer from dropping out of business, that represents the farmer’s lost economic, social and environmental contribution to society. Because research shows that business education is positively related to profitability and that farmers with a higher education are more likely to be successful in their farming careers, the need for specialty crop business education is critical now more than ever. Accordingly, the business education needs of specialty crop farmers must be addressed.
This study aimed to define the most important business skills that successful and unsuccessful farmers view as necessary to be profitable. Our data suggests that there is great opportunity to develop curriculum and resources for Kansas and Missouri specialty crop producers. While many of the business skills that correlate with standard business education subjects were perceived with importance, specialty crop farmers emphasized a low satisfaction with business education- related resources. Data revealed that there are important differences in the needs of various types of farmers that educators should take into account when considering the development of business education programming. Educators should be aware of their target audience’s perception of resource satisfaction, skills, obstacles and desired courses because beginning farmers need different types of support than experienced farmers. These data also provide insight into how certain farmer groups differ, identifying areas of business skill knowledge that can be strengthened in order to improve beginning farmer viability. The goals of developing curriculum from this data would be to identify skills and areas where beginning farmers need increased confidence and knowledge to get that boost and motivation to manage successful and viable farm businesses. The development of appropriate and useful business education resources could help farmers become more business literate and ultimately more financially viable and successful, securing the future of specialty crop farmers in Kansas and Missouri.
Educational & Outreach Activities
McManus, M. ” Defining Business Education and Supporting Wholesale Marketing for Beginning Specialty Crop Farmers.” M.S. Thesis. Department of Horticulture and Natural Resources. Kansas State University. 2021.
McManus, M. “Business Education Small Scale Specialty Crop Farms”. 2021 ASHS Conference (Denver, CO)
McManus, M. “Beginning Farmer Grant and Business Training Results”. 2021 K-State OHC Commercial Fruit and Vegetable Research Field Day (Olathe, KS)
McManus, M. “Business Education for Specialty Crop Growers”. 2020 K-State OHC Commercial Fruit and Vegetable Research Field Day (Olathe, KS)
McManus, M and C. Rivard. Business Education for Specialty Crop Growers. K-State OHREC YouTube Channel.
This research study showed how important business education and resources are for truly sustainable farm businesses. There are many different skills that farmers perceive to be necessary for an economically viable farm and this project helped to prioritize and define which skills educators should focus for the development of resources. Networking and mentorship were the top resources for farmers of all backgrounds, including experienced and beginning farmers. This social component of sustainable agriculture is crucial for farmers to have the support they need in order to help their businesses thrive. Only through the sustained viability of farm operations can the environmental benefits that small scale producers provide be continued.
This study emphasized the importance of business management skills for growers to sustain a successful and profitable farm operation. The results from the survey and focus group increased our perceived importance and necessity of business curriculum and resources for farmers. Data also revealed an strong preference for networking and mentorship among farmers as one of the top resources for education which shows how important community and relationship building is within the sustainable agriculture community.
Many farmers spurred conversation about the benefits of participating in a multi-day focus group. A specialty crop producer form Eastern Kansas stated, “It’s nice to be in a group because there’s a little bit of responsibility that you’re putting into it. You get feedback. Sometimes, I need to have somebody hold my feet to the fire to actually get it done, so if in a small group like this and you’re actually talking about real issues, you can get more done.” Another specialty crop farmer from western Missouri stated, “I just have really appreciated the ability to participate in this at my own pace. A one- or two-day conference, you just barely get warmed up. But by expanding it out over a whole week with minimal investment per day, it gets you thinking about it for more than one or two days. I feel like this is what I needed at this time of the year, so I’m grateful.” Lastly, one specialty crop farmer from Northeastern Kansas talked about the convenience and ability to connect with others, “I’ve really enjoyed this focus group because I get a chance to listen and hear other farmers’ stories and experiences and I don’t have to go anywhere, and I get to work at my own pace.”
Future research should focus on a more defined exploration of certain business skills. The study was a broad exploration of business education curriculum as a whole with general perceptions on business skills and obstacles. With a more specific research goal like marketing, more defined curriculum could be developed from feedback. Additionally, obtaining a larger sample size of individuals who dropped out of farming for business- related reasons could provide more insight into the barriers that beginning farmers face so that they can be addressed and prevented. Finally, with the continued improvement of internet access among urban and rural farmers, online focus groups could be a powerful and useful tool in agricultural qualitative research.