When Farming Reality Doesn't Match the Business Plan

Final Report for LNC12-342

Project Type: Research and Education
Funds awarded in 2012: $165,293.60
Projected End Date: 12/31/2015
Region: North Central
State: Minnesota
Project Coordinator:
Kent Solberg
Sustainable Farming Association
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Project Information

Summary:

The Sustainable Farming Association, founded in 1990, is a Farmer to Farmer Network, dedicated to tapping into the wisdom of the community to enhance farming systems, and maintain a vibrant diverse farming community in the US and around the world.  Farming is a difficult business, and like all small businesses, start up farms are challenging.  Adjust 2015 gleaned from the collective experience of over 200 start up farms and identified the most common hurdles to farm success.  The New Farm Reality Check Curriculum is designed to help beginning farmers identify these potential hurdles in their business plans, and to prepare to navigate around them for future success.

Introduction:

Adjust 2015 is designed to: a) increase the knowledge and awareness beginning farmers have of potential difficulties they may face, b) build into the beginning farmer educational system an emphasis on realistic, nimble and flexible business plans, c) develop the skills of beginning farmers to recognize dangers looming on the horizon early enough to make adjustments before those dangers threaten the business or the farm family, and d) help aspiring farmers develop a proper exit strategy as a part of their original business plan.

 

If sustainable agriculture is truly sustainable, more farms need to succeed beyond the 3-5 year time frame, and grow into viable businesses that can adapt and overcome hurdles as they arise over a 20, 30 or 40 year horizon. As a movement, we should be doing all we can not only to prepare new and beginning farmers for entry into the farming, but also, we need to help them to anticipate and adapt to farm-threatening issues that occur after they have started farming.

 

As the materials developed in Adjust 2015 are incorporated into beginning farmer training programs throughout the North Central Region, new farmers will develop business plans that are more realistic and flexible and easily adapted to account for the potential pitfalls that are facing today’s beginning farmers. In the long run, as beginning farmers take into account the lessons learned from farms that have failed or made significant adjustments in order to survive, we will see more new farms succeeding past the critical 3-5 year window. As more farms succeed, we will see the profitability of farmers and associated ag businesses improve; and we will see enhanced quality of life for farmers, rural and urban communities and society as a whole.

Project Objectives:

The objective of the Adjust 2015 Project was to establish a curriculum and tools which can help farmers learn to adjust their farm operations to mitigate or avoid challenges to the farm business.  Specifically, we sought to survey 200 beginning farmers and interview 40 of them for case studies.  In actuality, we surveyed 232 and interviewed 36.    In hindsight, we may have been just as successful interviewing 20 or so farmers, as the interview phase of the project was the most demanding.

 

We have developed basic curriculum tools and informational presentations.  Some of these tools and information have been presented to various audiences and have been well-recieved. At the time of the development of the grant proposal, and the initial roll out of the project, SFA did not have its own beginning farmer education program, and we were anticipating a great emphasis in providing outreach with tools and information to organizations with farmer training programs in place.  While this type of outreach and collaboration is a hallmark of SFA and will continue to be emphasized with the results of the Adjust project, SFA now has its own farmer training program, the Deep Roots Farmer Development Program.  Deep Roots is incorporating all of the learning objectives identified in this report, and further development will make materials more available to other organizations.

Cooperators

Click linked name(s) to expand
  • Dr. Valentine Cadieux
  • John Mesko
  • Brett Olson

Research

Materials and methods:

This project identified key factors limiting new farm success in the initial 3-5 years, key changes made which can bring about farm success, and the needs of farmers who exit farming.

 

Our strategy hinged on providing a safe environment for people to share genuine stories of why and how their farm business has not met their expectations and how their families have been affected. We also provided an outlet for stories of success where the downward spiral was caught in time and disaster averted.

SFA is a trusted partner in sustainable agriculture in Minnesota.

 

Our annual conference in 2012 kicked off SFAs work in this area, with Dr. Val Farmer, rural psychologist and syndicated columnist as our keynote speaker.

 

Adjust 2015 collected the actual, on-the-ground stories of farms, farmers and farm families that have had to make some significant change in plans, expectations, or business structure to avoid negative outcomes. We promoted the opportunity to participate in our project with advertisements in a wide variety of media, including direct communication with SFA farmer- members. We surveyed 232 farmers across the United States, and collected a broad spectrum of stories reflecting the breadth of difficulties beginning farmers face. From these, we selected 36 respondents to conduct in depth case studies to further identify specific issues faced by beginning farmers.

 

These case studies explored the initial motivation behind the individuals getting into farming, their education, family situation, and initial goals. Participants in these case studies identified the course of events that have transpired since beginning farming, sharing the good, bad and ugly. From this, we identified the “red lights on the dashboard”indicators of impending stress points.

 

Additionally, from the case studies we identified the common adjustments that farmers who successfully weather the storm make in order to remain in business.  The survey and case study portion of our project was led by Dr. Valentine Cadieux, from the University of Minnesota.

 

We were able to summarize the findings into several broad categories, such as: family issues, knowledge issues, production issues, economy issues, customer service issues, equipment issues, land issues, financial management issues, expectations issues, etc… The number of situations falling into these categories will help SFA and other organizations better understand the needs of beginning farmer education program participants.

 

We’ve developed support mechanisms, educational modules and tools for farmers who are experiencing less success than originally planned. The purpose of these materials is to provide struggling farmers with the awareness of, knowledge of, and access to available help to the implement positive changes to the operation, or assist in adjusting farm goals, or if necessary, assisting farmers to exit farming successfully. 

 

A successful exit from farming, where the farmer is still engaged in sustainable agriculture at some level, as a consumer or as labor on another farm, furthers the movement and enhances the quality of life of our rural communities.

 

Survey procedure and survey questions were prepared in collaboration with the University of Minnesota and Renewing the Countryside.  Survey respondents were recruited through all of SFAs normal communication channels as well as the outreach of various collaborative agencies and organizations.  We received surveys from 22 states and 3 provinces in Canada. 

 

Surveys were reviewed by the Adjust 2015 Leadership team, which included several farmers and representatives from other rural leadership organizations.  Each survey reviewer was asked to score the surveys based on the relevance and helpfulness of the information shared.  Each reviewer scored each survey regarding the perceived usefulness of interviewing the survey respondent in more detail, and probing for more information. 

 

Potential interviewees were asked to sign letters of permission. Most interviews were conducted in person, but a few from far away were also conducted by phone.  Detailed notes were taken by interviewers regarding specific responses to questions, as well as unsolicited feedback and curriculum ideas.

 

After reviewing all surveys and interviews, Adjust 2015 Leadership Team met in mid 2014 to determine key themes running across respondents and to begin developing learning objectives for the New Farm Reality Check curriculum. Curriculum tools, such as presentations, worksheets and scripts were developed and presented, refined and posted on the SFA website.  Additionally, these materials are all made available to farmer education programs through SFAs affiliation with the USDA BFRDP program.

Research results and discussion:

We finished the project with 232 surveys of farmers who had struggled in the beginning of their farming careers or had exited.  Of those, we interviewed 36 farmers and farm couples regarding the specifics of the issues they experienced.  These surveys and interviews have been the basis for developing our learning objectives and educational modules.  Key survey and interview findings were reported in our 2013 annual report, and the additional surveys and interviews conducted in 2014 provided findings very consistent with those from 2013.

 

As a team, we met in mid-2014 to summarize key themes from the survey and interviews.  The team initially identified 20 key themes, then refined them to the following:

 

  1. List of Key Themes as identified by participants
    1. What to watch out for.
    2. Advice to beginners
    3. Common issues.
    4. Keys to success.

  2. Learning objectives for students completing the New Farm Reality Check Curriculum:
    1. Identify life patterns (relationship and behavior) contrary to farming or business success.
    2. Identify progress benchmarks consistent with realistic expectations. Build them into the business plan.
    3. Identify benchmarks associated with exiting the business.  (find examples from other industries, and businesses.
    4. List the basis for each assumption in your business plan.  ex. Dairy farmer and his milk checks.  Old equipment owned by mr. fixit.
    5. Ability, awareness, impetus to actually build a network of experts, friends, colleagues, consultants, professionals who are your “team”  :  Including an “honest skeptic”

      How do you find an honest skeptic? qualifications.

    6. Be able to develop alternative plans (3) in addition to primary plan.

      -“Pre-nuptial” agreement – practical ideas for managing risk. (e.g. “What are we going to do if:…[fill in the blank]

      -back up plans for enterprises (e.g. irrigation)

      -How will future events affect my business, climate change

      -Managing risk- Insurance.

    7. Identify community building opportunities: sources of expertise, associations, memberships (SFA, FLAG, others…), Books, publications, magazines, online forums

    8. Develop plan, expectations regarding number and timing of children.
    9. Acquire necessary soil literacy to develop reasonable expectations for land aquisition, production and mitigation of problems.
    10. Establish clear roles with family members.  Managing family differs from employees.
    11. Understand basic employee management

 

Research conclusions:

Presentations were made at NPSAS Annual Conference in Brookings, SD, SFA Annual Conference in St. Joseph, MN, and at the MN Dept of Ag Organic Conference in St. Cloud, MN in early 2015.  Evaluations from these presentations were positive, indicating the material presented was helpful to participants.  Across all presentations, 29 evaluations indicated 76% (22) participants found the tools provided were sufficient in helping them identify issues to be addressed in their business planning.  Fifty-nine percent (17) of participants felt the workshop provided exit strategy tools they would implement. 

 

The New Farm Reality Check Curriculum has been incorporated into SFAs Deep Roots Farmer Development Program.  As a result, the outcomes of this project, including the identification of potential pitfalls and avoidance methods are being shared with each participant. In 2014, 8 new farmers were graduated from the program.  In 2015, SFA received a USDA Beginning Farmer Development Program grant, and the content has been further expanded and broader audience outreach is a significant part of the new program.

 

Adjust 2015, the New Farm Reality Check Curriculum, and respective outcomes will live on within the Deep Roots Program.

Farmer Adoption

As the New Farm Reality Check curriculum is presented to more farmers, we continue to receive feedback as to its effectiveness in helping farmers to avoid situations which create negative outcomes.  While difficult to measure, a negative outcome, such as a new or aspiring farmer delaying implementation of a new enterprise, or delaying or canceling the launch of a farm that is poorly equipped for success is actually a very positive outcome for farming as a whole.  Farm failures affect more than just the farm that fails.  When a farm goes out of business the whole community suffers.  “Better to have never farmed than to have farmed and failed.”

Participation Summary

Educational & Outreach Activities

Participation Summary:

Education/outreach description:

The New Farm Reality Check Curriculum is developed for 2 different formats: a 1-2 hour workshop presentation, which could easily augment an existing farmer training program, and a 1/2 day workshop which can be implemented as a stand alone workshop.  

 

The SFA website hosts key presentations and worksheets with more being added as workshops are held.

http://www.sfa-mn.org/adjust-2015

Project Outcomes

Recommendations:

Areas needing additional study

Surveys and interviews revealed that the most successful farmers were those who consciously built a community of experts, neighbors, collaborators and trusted critics who could speak to them about problem identification and problem solving.  Over the last 40 + years, many rural areas have seen a dramatic decline in Mechanical Solidarity, or the social infrastructure within a community which causes it to work as a community.  The lack of Mechanical Solidarity was highlighted in many cases where farmer and farm families struggled to get established.

 

More work needs to be done around helping farmers and rural communities to become reliable, developers of Mechanical Solidarity.  Communities could be trained and coached on how to welcome new residents, new farmers and the issues they might bring with them.  

 

If new independent farmers are desired to be accepted into rural communities, then communities need to be prepared to develop the social fabric capable of supporting them.  This will require an investment of time and resources in most cases for communities to build the type of community they desire, rather than just allow economies of scale and generic migration to affect change in local demographics.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.