The CFFO Commentary: Focus on Planning Tools Key to Improvements

By Nathan Stevens
November 11, 2011

The Agricultural Management Institute has developed a baseline study of Ontario farmers use of planning tools. The next step will be identifying and implementing ways to encourage more farmers to take a serious look at the benefits that planning can provide a growing business.

On the qualitative side, most farmers consider success to be maintaining a comfortable living and farming lifestyle. Most farmers are focused on day-to-day business and improving production rather than business planning and development. The study revealed that the single greatest barrier to business planning for farmers is that they are unable to articulate the value of the plan and thus don’t believe it has a strong return on the time invested.

Most farmers consider farming to be equal parts business and lifestyle. On the quantitative side, only 22 per cent of farmers have a formal written business plan. Financial and operational assessments are the most common planning activity amongst producers, while engaging in benchmarking and human resource activities are very low.

The picture reveals that there are essentially 5 approaches to planning by farmers in Ontario.
·         There are the planners who actively engage in planning for their farm business.
·         There are the developers who tend to be on the cutting edge of new production practices that have an interest in the assessment tools that will help them continue to innovate.
·         There are the independents who are not interested in a full plan but may adopt tactical tools that help out on the farm.
·         There are the skeptics who have little interest in planning beyond what they are carrying around in their head.
·         Finally, there are the sunsetters. These farmers are nearing retirement and succession planning is their key priority.

The Agricultural Management Institute’s baseline study of farm business management planning is a crucial first step in assessing and improving the adoption of planning as a core component of farming in Ontario. Moving forward, tools will need to be developed that encourage more farmers to engage in learning about the benefits of planning, and perhaps developing a plan for themselves.

Nathan Stevens is the Research & Policy Advisor for the Christian Farmers Federation of Ontario. The CFFO Commentary represents the opinions of the writer and does not necessarily represent CFFO policy. The CFFO Commentary is heard weekly on CFCO Chatham, CKNX Wingham, and UCB Canada radio stations in Chatham, Belleville, Bancroft, Brockville and Kingston. It is also archived on the CFFO website:www.christianfarmers.org. CFFO is supported by 4,200 family farmers across Ontario.

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