Finally we’re actually moving into an agriculture that knows exactly how to integrate business management for better, more profitable decisions in the field.
I know that many of you have been following our series of financial management columns written by the faculty and teachers at AgriFood Management Excellence, the group that offers the advanced CTEAM educational program.
If you haven’t, I recommend you pause over this month’s AME Management column which explores how to build bridges between what you can glean from your financial statements and the directions and objectives you may want to set for your farm.
Preceding columns in the series can be obtained through our website at www.country-guide.ca, and although they aren’t quick reads (it’s worth having a pad of paper and a pen so you can scratch away at some numbers as you read) you will feel, if you’re like the other readers I have talked to, that your time has been well spent.
You will find the columns in our November issue of Country Guide all take a similar theme. Indeed, I would say it is becoming a central theme of the entire magazine, addressing the kind of decisions that may be the most critical of all the decisions you face in the next few years. In this period of volatility, opportunity and risk, how do you integrate business management and your operational workflow, so the job assignments you give yourself tomorrow will drive the farm in the best possible direction?
I suppose this might sound like MBA-speak, but the truth is that most farmers across the country are already a long way down this path.
It is one of the great points of differentiation between how today’s farms are being run, versus the farms of 20 or 40 years ago. Fewer farms today get financial advice solely in order to reduce their tax burden. Taxes are still a significant issue, of course, but farmers today are seeking insight into how better to structure their farms, how to address succession issues, how to allocate resources for growth, and so much more.
This changing tide is perfectly captured by an observation from farm adviser Richard Cressman in Maggie Van Camp’s must-read story “Independence.”
Cressman often works with families in the midst of difficult succession discussions, with the parents wondering, is the next generation really up to the job? Can I trust the farm to them?
Increasingly, Cressman says, he sees parents making that decision based on whether the “kids” are interested in and whether they understand the farm’s financial statements.
It’s an observation in line with what I see as well, and it is a million miles from the standard complaint of previous years, when Dad might be 65 years old and son may never have seen the books.
Not surprisingly, this transition isn’t uniform everywhere in the industry, but it is a lot more developed than many have believed, and much more advanced than anyone outside of agriculture is aware of.
Which is a good thing, because it’s becoming clear that this isn’t just a best practice, it’s vital to the future competitiveness of the farm, as you’ll see it in every story in this issue.
Are we getting it right? Let me know at [email protected].