International Case Studies: Impact of Business Management

Today signaled the last day of the Congress and talk about saving the best for last.

My morning began with a speed-learning session on Entrepreneurship and Farm Strategies Development in CEE Countries which gave 10 international speakers the opportunity to present their work in 10 minute segments.

Of note, Ryan Koeslag of Ontario’s Agricultural Management Institute presented Baseline Study on the Behaviours and Characteristics of Farmers who conduct Business Management Strategies – A Story of 5 Ontario Farmers.

Other presentations included:

• Study of development paths in dairy farming in Poland, Lithuania, Slovenia and the Netherlands – an overview – Abele Kuipers
• Development paths of dairy farmers in Poland – Agata Malak-Rawlikowska
• Interactive strategic management method + application in farmers trainings within LdV Project – Alfons Beldman
• Farm analysis and strategy building with support of ISM method, – case of Polish farmer – Lech Sychocki
• ISM training experiences in Slovenia, including work with farmers, students and entrepreneurial assignments – Maria Klopcic
• Development paths and experiences with ISM trainings in Lithuania – Aldona Stalgiene
• Evaluation of the interactive strategic management trainings – Agata Rawlikowska
• Effect measuring of the trainings including competences – Carolien de Lauwere
• Sustainability of ISM project results – ideas for future Agata Sosinska

Some observations:

1. Analysis of Farm Development Paths: Lithuania, Poland, Slovenia, Dutch
– Most farmers characterize themselves as independent specialists (41%)
– Farmers indicated how important farming goals were, ranking as follows:

1. Maximize profits
2. Sustainable quality
3. Dairy tradition
4. Work environment
5. Improve management

– Farmers indicated knowledge was the most available resource to them, and least available is land. Labour is also an issue.
– Opportunities & Threats ranked the top threat as the Ag Policy (2015 removal of quota and reduction of subsidies), followed by the milk market, and regulations
– Top opportunities included interaction in the chain (vertical, horizontal value and supply chains) and technology
– Note: Dutch farmers see abolition of milk quota as an opportunity – Abele thought this had to do with self confidence in business management competency

2. Dairy Production Developments and Farm Strategies
– Accession to EU caused farmers to modernize and increase production scale
– Resulted in decrease of dairy farmers (61%), increase in yield per cow and improved milk quality
– Development strategies: 86% specialization (as opposed to diversification), 80% growth, 37% vertical chain, 42% cooperation, 9% diversification
– Downscaling, wait & see, diversification were ranked least used strategies
– 250% increase in milk production per farm since accession in 2004
– Rented vs bought land has had no impact on business development
– Dairy accounts for 20% of ag output
– 5th producer in EU – 10mill tonnes/yr

– 170,000 farms producing milk (average 10 ha w/ 11 cows)
– 62 tonnes of milk per farm, 5200kg milk per cow
– 27 euro for 100 kg
– 70% cooperatives
– 25% production exported
– No statistical difference between strategy and demographics – age, education of the manager
– Those who want to diversify are smaller farms
– 70% of farmers do not want to employ more workers (limiting the scale of production)

3. Interactive Strategic Management as Learning Tool for Improving Entrepreneurship of Farmers
– Issue: no clear direction available for the future of all farmers
– Farmers need to be shown how to develop a long term strategy for a successful future

The Program
– 3 day farmers’ training + other types
– Main goal not to develop the strategy but to think and work strategically
– Focus on strategic choices (5 years) not on operational or tactical choices
– Work with diverse farmers to avoid operational conversations in group
– 8-10 farmers, 3 meetings in a row with 2-3 weeks between
– + Facilitator
– + Web-based tool to support the tool not lead
– + Homework assignments to interact and reflect
– + Train the trainer

Day 1
o Farmers get acquainted – why are you a ___ farmer? What job would you have done if not a ______ farmer?
o What is strategic management?
o History and development of farm and farmer
o Working with tools
 Analyze current situation on farm (size, performance)
 Analyze environment (market and society)
 Use the tool
o Homework assignment – talk with an entrepreneur outside of agriculture

Day 2
o Present results of homework
o Talk about entrepreneurship skills
o Switch from analyzing to strategy
 Personal ambitions and drive
 Combining the analyses to matching strategy (must come up with at least 2)
 Consistency check with SMT – crucial step in training
– Spider diagrams

Day 3
o Present strategy to the group
o Develop action plan
o Reality check – investment? Make the first calculation yourself
o Reflection from trainer and other farmers

Year Later
o Return meeting
o Presentation of developments
o Plan tweaking
(try and stay in touch before this)
– Based on Canvas Business Model approach

4. Farm Analysis and Strategy Building with Support of ISM Method
– Farmers say they want more family life in beginning, but end plan doesn’t have it – so facilitator comes in to point out mismatch
5. Baseline Study on the Behaviours and Characteristics of Farmers Who Practice Business Development Strategies
– Farmers categorized as sceptics, planners, developers, sunsetters, independants
– When compare types of farmers, there is a correlation between more business plans and increased sales in last 5 years
– Developers are the largest, planners have the most business plans – most likely to report increased sales
– Full study and report available at takeanewapproach.ca

9. Effect Measuring of the Trainings including Competences
– Farmers who participated, perceive their competencies as higher than control group
– Survey to participants + control group
– Decrease in negativity about the future

A number of simultaneous sessions were held during this Thematic Session, one of which was Mathieu Lipari’s presentation: 2020: Planning for the Business Management Needs of Canadian Farmers – When You Don’t Know What You Don’t Know

Everyone collected back into the main lecture hall where we were delighted by a farmers’ panel:

• Wiesław Gryn (Poland)
• David Hughes (Argentina)
• Alex Lisitssa (Ukraine)
• Andy MacFarlane (New Zealand)
• Alastair Paterson (South Africa)

Of particular interest, David Hughes from Argentina spoke about the adoption of CREA (farm management groups) after a French model 50 years ago. This is the same model adopted by the Groupes conseils agricoles in Quebec. David’s CREA has over 200 groups with over 2000 members total.

Groups consist of 12 farmers who meet monthly and are led by an advisor paid by the group. Information is shared and benchmarked and field tests are planned. A Coordinator ensures advisors get together to readily share information and secure a strong technical network. Each group is chaired by a farmers and after two years, cannot come back to Chair until all members have had a turn.

Andy Macfarlane, farm management consultant from New Zealand, cited some dairy facts re: average farms:
– 100% irrigated
– 550 acres
– 770 cows
– Production 342,000 kg MS (5,2% fat)
– 6800 kg milk per cow (25 kg/day)
– 4 employees, 16% of total production costs
– 80% pasture diet
– $38,000/ha
– $8000/ha Fonterra shares
– $6000/ha stock
– $1000/ha plant
– Return on Capital: 4.7-6.6%

Andy cited NZ’s main trends:
– Environmental standards tightening
– Cost of infrastructure continues to drive farmers from sheep and beef towards dairy
– High prices encourage opportunists to defraud value chains
– 45% avg. debt level
– 6% fixed interest rate
– Markets moving west to east, China takes 30% milk and lamb, beef and timber
– Ag students need to increase by 500% to meet demand
And lastly, NZ can feed 30 million people.

Finally, it was time to present Canada as the next Congress location and invite participants to come see us in 2015!
The 20th International Farm Management Congress will be in Quebec City – August 2015. Be there!

Thanks to Agriculture & Agri-Food Canada and Quebec Tourism for supplying materials for the presentation.

Rob Napier (Australia) closed the Congress encouraging participants to create a Takeaways 2-pager and action plan to follow the Congress.

Afterwards the Council (Board) met for a post-Congress meeting to reflect on what went well, areas for improvement and carrying IFMA’s strategic direction forward.

A personal thanks goes to our fellow Canadians for bringing such a strong Canadian delegation to this Congress. And special thanks to CRAAQ for taking part in the Congress to ensure 2015 is a huge success!

Tomorrow (Saturday) I begin the first day of a week-long post tour around Poland. Be sure to follow my adventure, starting with JMP Flowers.

-Heather

IFMA19 Pre-Tour bloggin’ from Ag Mgmt Institute!

Hey everyone!

Our friends at Ontario’s Agricultural Management Institute are blogging from the IFMA pre-tour!

Check it out: agmanagementinstitute.blogspot.ca/

Agritourism visit: Herbal Corner Farm

There is something oddly familiar about the landscape of rural Poland.  Perhaps it’s the birch and sumac trees, maybe its the endless vista of farmers fields rolling over a relatively flat landscape similar to Southern Ontario…

Nice one AMI! Keep the insights comin’!

See you in t-3 days!

-Heather