STUDY FARM MANAGEMENT
....to improve farm efficiency and productivity
To manage a farm well requires careful planning. In most instances, you should plan for years, if not decades in advance. You should plan both the physical development of the farm property, as well as the development of the farm business.
Some of the things which may need to be planned for include:
Some farmers are very good at growing produce (animals or crops); but there is more to farming than just producing a good crop or maintaining healthy livestock.
Upgrading facilities (e.g. Introducing new technology, new procedures, replacing or improving worn out or damaged facilities)
Expansion of operations
Changing direction (e.g. moving from one type of livestock to another, or diversification)
Major maintenance (of property, buildings or equipment)
Contingencies in case of anything going wrong (e.g. economic downturn, drought, illness).
Every farmer needs management skills. It doesn't matter whether they are acquired in a course or on the job; but without them a farm will struggle.
There are 8 lessons as follows:
1. Strategic Planning
Planning procedures - the policy formulation approach, strategic management approach, initial strategy approach; Farm business structures; Management plans; Financial terminology and the money market; Finding finance; Rural finance sources; Financial terminology and record keeping; Contract law; Elements of a simple contract; Offers; Acceptance; Consideration; Strategic plans; Trusts
2. Business Plans
Farm Planning; Quality management systems; Whole farm planning; Preparing a business plan; Integrated production plans
3. Business Assessment
Business goals; factors involved in business assessment;Considering factors affecting your business; Drawing conclusions
4. Viability Analysis
Assessing profit; Risk analysis and managing risk; Standards; Cost efficiency; Cost of production; Quality and quantity standards; Financial records; The bookkeeping process; End of period accounting;Cash flow; Example budget; Sensitivity analysis
5. Management Strategies
Organising the workplace; Scheduling; Production systems; System variables; Animal production systems;Lot feeding; Cropping systems;Polyculture; Office systems; Computers;Business diversification; Value adding
6. Human Resources
Supervision; Oganisational structures; Leadership; Workplace changes; Interviewing, recruitment and staff induction; Giving instructions; Managing human resources; Work scheduling; Occupational Health and safety; Duty of care;
Protective equipment; Dealing with chemicals; Handling tools and equipment; Safety auditing
7. Physical Resources
Managing equipment, machinery and buildings; Managing physical resources;Engineering efficiency; Animal structures
8. Natural Resources
Regulations and legislation; Land Care programs; Rehabilitation; Trees; Erosion control; Soil degradation; Salinity; Soil acidification: Compaction; Chemical Residues; Water management; Water quality; Irrigation and watering systems
Duration: 100 hours
- Develop strategic planning methods for an agricultural business.
- Prepare a Farm Business Plan.
- Develop methods for assessing the operations of a Farm Business.
- Analyse the viability of different production enterprises:
- assessing profits
- risk analysis
- cost efficiency
- quality standards
- financial records
- Develop strategies for managing different farm production enterprises, covering workplace organisation and crop scheduling.
- Plan the management of human resources in a farm business covering:
- types of leadership/managers
- orders & instruction
- motivating employees
- Develop methods for managing the physical resources of a farm business including managing equipment, machinery and buildings.
- Develop methods for managing the natural resources of a farm business, covering topics:
- regulations & legislation
- landcare programs
- erosion control
- soil degradation
- soil acidification
- chemical residues
GOOD MANAGEMENT REQUIRES CONSTANT ADAPTATION TO CHANGE
The world is changing faster than ever, particularly the introduction of new technologies, and there are implications for every industry, including farming. If you are to be successful in farming today, and into the future, you must learn to adapt to these changes. The way to succeed today will be different from the way to succeed in the past, just as the way to succeed in the future will be different from the way you might succeed today. And while it is still important to learn from the "way we've always done things", it is even more important to both face up to new challenges, and to embrace new opportunities.
Growing good produce was sufficient for most farmers to make a profitable living - but not any more. Catch phrases such as value adding and multi-skilling are common to us all now, but what exactly do they mean? And what about just being good at one thing, or the concept of creating a core business? All of these things are important to the success or failure of business today. Some businesses, no all, that have gone down the track of specialising to some degree have actually failed due to exactly that reason. The farm business, just like any other, must learn to take calculated risks. But risk taking should always be based on thorough knowledge, thorough planning and thorough preparation.
To look at what range of business opportunities are available, we must first look at where rural industries have been and where they are going.
While large scale production is most economical in terms of return, the long term effects on land, water use, etc. can be costly. Rather than strive for the highest return in the short term, a good farming enterprise must always be looking to the future. While fallow land may be unproductive land, the money lost in short term production may benefit the farm in the longer term. As less and less land is available to provide farm produce for more and more people, it becomes increasingly important that the land be kept productive. Land care issues should always form part of the long term management of a property. Just as a good factory must be maintained to ensure long term productivity, so should the land and other natural resources, such as water, of the farm
Production methods have also become more sophisticated. Using technology, mechanisation, biochemical products, biotechnology, and a myriad of other techniques, production has changed a great deal. It is more than the average person could hope to keep up with, especially one who is already working hard to maintain a business. Seek advice, use the service of experts. Don't let high technology be daunting, but don't expect to know everything about it. Learning just enough to see how it could fit into your business, and experimenting with new ways can lead to changes that will benefit the farm overall.
There are also a lot of niche industries available to service providers specialising in an area of technology or machinery. For instance, it is not cost effective for most small grape producers to own the harvest equipment necessary for picking grapes, yet machine harvesting may be cheaper than hand picking. The person that has invested in the harvesting machine will often have a solid market in running the harvester for other small producers. The same is done in all facets of areas of agriculture, including hay baling, wheat harvest and cotton harvest.
Aside from the increasing challenges of production, we operate in a different financial climate than we did in the past. There are more types of credit available, interest rates seem to go up and down with alarming regularity and finding the right type of credit, and a source that will provide it, is difficult. But you can take advantage of these differences, if you are prepared to look at all the options. Many private investors are always looking at ways of making money. And while most farmers would prefer to be a sole proprietor, there are methods of having it both ways. This could be achieved by the autonomy of your own business and the support of an investor, be it banks, private parties, or other sources. As with all other aspects of farming, though, you need to be prepared to do your homework, to ensure that you are legally covered and that the arrangement suits your needs. While everyone hates to pay the high price of legal and accounting advice, it is generally much better to part with the money and obtain good, sound advice, than to lose the business because of some type of 'fine print', or a lack of understanding on your part.
Today's farmer is expected to meet these higher and ever changing demands of production, marketing and finance while operating on tighter margins. One of the greatest difficulties that many farmers have is finding time to spend on budgeting and planning for the business. It is understandably difficult to justify looking over the books when there are fences to mend, animals to tend to and endless chores to complete. But as profit margins decrease, so increases the need to know exactly what your financial position is at all times, and what can be done about it. Keeping an eye on the markets, planning for both poor and productive years and knowing what you intend to do for 1, 5, 10 and 20 years are all very important, and very time consuming, aspects of successful farming.