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Editor’s column

In January I spent four days in London, Ontario at Syngenta’s Grower University Business Foundations Program.

Every year for the past 10 years Syngenta has sent 40 farmers from across the country to the Richard Ivey School of Business at the University of Western Ontario. The goal of the course is to teach farmers about management and profitability — not about Syngenta products. Syngenta Canada’s president Jay Bradshaw turned up at the opening session in person to promise us that none of the instructors would even mention Syngenta products during the course. (Of course, it would have taken a lot more than that to stop a group of farmers from talking about Syngenta products and all kinds of other chemicals out in the hallway during the breaks.)

Grower U is a pretty intense course, focusing on book-learning and high-level strategies, but also on bringing that knowledge back to the farm. Everyone was asked to come up with an action plan to do two new things on their own farm when they got home.

Here is a short list of the things I learned:

1. Preparation is key

About a week before I left for London, the Grower U organizers mailed me a big envelope full of information, including a financial analysis textbook. That’s right, a university-level textbook, with a note suggesting that everyone should read the first five chapters before the course.

I was about to start reading when the phone rang. The woman in charge of the course was calling. “I see you’re with Grainews,” she said,

“Yes,” I answered.

“Oh dear,” she said. “When we saw your mailing address, we thought you were a farmer coming to Grower U.” So I told her that my husband and I do farm, and that, in fact, I do the bookkeeping here and was excited about the course.

“Well,” she said, “I just wanted to tell you that we sent you the wrong package. Instead of the media package, we sent you the farmer package. We would never expect the media to do all that reading!”

2. Farmers have some differences

There is no one type of “Canadian farmer,” so, as you can guess, if you fly 40 farmers to Ontario, there will be some differences.

The farmers were different ages (but many were just getting started — in their 20s), and had different types of farms. Some farmers had off-farm businesses, or were working on ideas to move their business up the value chain.

All of the farmers had different areas of expertise. A couple had accounting backgrounds. Some had experience in corporate management before they went back to their farms. Others were great mechanics, or great agronomists.

The farmers had different political views. Even in 2013, one instructor had to warn the group not to keep talking about the Canadian Wheat Board.

One lunch discussion about dairy quota got a little heated, ending with one man pointing at a young farmer across the table and saying, “he just doesn’t have a clue!”

3. Farmers have a lot in common

Good-natured political debates aside, the 40 farmers had more similarities than differences. Everyone had the same challenges dealing with banks, input suppliers and changing commodity prices. Farmers from across the country had eerily similar stories about the good and bad sides of ridiculously high land prices.

More than once I was relieved to see that most of the 40 farmers are experiencing the same problems and rewards we are.

For example, after I listened to the instructor talk about financial ratios for over an hour, it made me feel better to know that most of the farmers in the room weren’t actually tracking their financial ratios on a regular monthly basis (though I think most of us realized we’d better pull up our socks.)

And, despite the course’s focus on business management, it was nice to see that most of the farmers in the room, even the youngest ones, still see farming as something more meaningful than a typical business.

4. There’s always more to learn

I figured the accountants in the room might be getting bored during all that discussion about financial ratios. But they weren’t. “Every new instructor manages to put a slightly different spin on things,” a young accountant told me in the hallway. “It always hits home in a different way.”

5. Every farmer has employee challenges

Well, everyone with employees, anyway.

Some of the tips that the farmers shared for keeping staff on their farms were:

  •  Setting up an employee retirement plan (this is possible even if you only have one employee);
  •  Building a new house for your employee and their family;
  •  Sending flowers and candy to the employee’s spouse, as a symbol of appreciation during busy times;
  •  Treating the employee as part of the team, rather than just a hired hand;
  •  Rewarding the employee based on the farm’s success so that employee is really part of the team (one farmer gave his employee an annual bonus based on the profit from a set number of acres on the farm — making sure that the employee never had to cover a loss, of course);
  •  Keeping in mind the “the power of recognition” — some employees will appreciate on-the-job perks, like tickets to Las Vegas, in years when a wage increase isn’t possible.

6. It’s hard to justify that new combine

We spent one afternoon learning about “net present value analysis.” This involves crunching through every possible number before making a decision.

We looked at an example of deciding whether or not to buy a combine, and took into account estimated savings from lower repair costs and lower staff and fuel costs due to fewer hours needed on the combine. Then we balanced that against the cost of the new combine, the trade-in value of the old combine, and the expected value of the new combine after it was used for a few years.

Based on those numbers alone, there was almost no way we could get the decision to buy a new combine to look good on a spreadsheet. I was about to text my husband to tell him he should quickly cancel that new Case machine he has on order.

The problem is that it’s really, really hard to estimate the true value of something as vital to your operation as a combine. Maybe if you don’t buy the new combine, you’ll lose a day in the field next harvest, and your crop will be downgraded. Maybe it will rain before you finish harvest.

There are real costs to these disasters, but it’s quite a guessing game to turn them into dollar values that you can put into a spreadsheet and show your banker. I’m not saying it’s impossible, but you’d have to do a lot of estimating and make a lot of assumptions. Justifying that new combine is always going to involve a lot of guessing and a little hope.

7. Reconsider London as a winter vacation spot

I like London. It’s a beautiful city with lovely old buildings, great restaurants and some interesting history. I even had a chance to visit some family while I was there.

But the problem with going to London is that when you tell people you’re going to London, they get quite excited for you, thinking you’re off to see Buckingham Palace and ride The Tube (subway). But then you say “that’s London… Ontario,” and you can see the sudden sadness in their eyes while they stop imagining you in front of Big Ben, and try to remember exactly where London, Ontario is.

Besides that, it was cold. And not a dry cold. The locals were shocked, and kept promising me: “It’s never like this here! Never!”

Enjoy this issue!

Leeann

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