Klinefelter: By the Numbers

Key Courses Colleges Forgot

Future farmers need more education in managing labor and risk mitigation given the scale and volatility of global agriculture. (Photo by John Morgan, CC BY 2.0)

In 25 years of my association with The Executive Program for Agricultural Producers (TEPAP), I've observed that it provides what most ag universities do not. Many of the courses that will be critical to farm successors' performance in eventual management roles are either not being taken or are not being offered by many colleges. This article looks at what those areas are. I believe it isn't likely to happen unless the industry speaks up and starts to lobby administrators at colleges of agriculture.

1. Personnel management and development. Even if students take human resource management courses, they are taught mostly from a corporate policy and the organizational development theory perspective. Students need more direct people management, delegation and accountability, effective performance evaluations, recruitment, retention, motivation, incentive and compensation, personnel development and training, personnel law, succession planning, personnel benefit options and conflict resolution. As Jim Collins states in his book "Good to Great," the best companies get the right people on the bus, in the right seat, and the wrong people (including family) off the bus.

2. Operations management and process improvement. This deals with process mapping, developing standard operation procedures and analyzing ways to improve efficiency. It also involves analyzing what the company needs to stop doing or change.

3. Alternative business arrangements. This includes pooling arrangements, joint ventures, alliances, sharing arrangements and closed cooperatives. It also includes analyzing vertical coordination and contractual arrangements. This involves analyzing prospective partners, entry and exit provisions, liability, counter party risks, prohibitions against self-dealing and issues involved in working together.

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4. Entrepreneurship. This involves evaluation of new opportunities, developing objectives, assessing competition, anticipating potential problems, marketing and pricing strategies, developing entry and exit strategies and developing the business plan and contingency plans.

5. Macroeconomics (domestic) and global geo-politics. We live and operate in a global economy. It is particularly important to develop leading indicators and sources of reliable information, as well as evaluating the impacts of changes in the global economy, including emerging and declining markets. Finally, it includes the evaluation of and anticipation of new regulatory developments and adapting to those changes in a timely manner.

5. How the political process actually works and the ability to separate reality from rhetoric. This looks at the actual process of how laws and regulations are passed or not, and how to decipher and evaluate political speak based on facts and actions rather than emotional appeal.

6. Practical cost/managerial accounting. It is extremely hard to evaluate performance without knowing actual costs and returns, not only at the whole farm level, but down to the individual enterprise and farm level. The increase in financial benchmarking also requires the data to be more consistent and accurate than what now exists on most farms.

7. Negotiation skills. Whether it is dealing with suppliers, buyers, landlords, lenders or employees and family members, negotiation skills are critical. Most farmers don't know what win-win really means and how to achieve it, or that different negotiation strategies need to be used in different situations.

8. Risk management strategies and decision tools. An understanding of puts and calls, along with various combinations in option strategies is not widely used or understood. The same is true of government and captive crop and livestock insurance products. In addition, a much greater understanding is needed of how various risk-management tools can be used together to develop a comprehensive risk-management strategy. There are also many computer-based decision tools that require more training and understanding in order to be used and evaluation of their strengths and deficiencies. New tools are constantly coming out and people need enough understanding to know what questions to be asking.

9. Last, but not least, more education is needed in developing creative thinking and innovation skills. This is not a template approach; but, learning how to look at and ask questions in different ways. As Tom Peters said in his book, "Thriving on Chaos," if it's not broke, you haven't looked hard enough. Continuous management improvement, creating new opportunities and dealing with problems as they arise creates a real payoff to looking at problems and for opportunities from a variety of new perspectives.

Part of the problem is the advising of students who intend to go back to production agriculture and part is that many courses dealing with the topics described above simply are not being offered. Many of these needed topics could be covered in extension programs as well as in the classroom. Farmers with a future vision and their advisers should push for those changes now.

EDITOR'S NOTE: Danny Klinefelter is a professor and extension economist with Texas AgriLIFE Extension and Texas A&M University where he teaches a beginning farmer program. He also is the founder of the mid-career Texas A&M management course for executive farmers called TEPAP.

(MZT/AG)

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