Treading through challenges in family farms
Every farmer now is confronted with need for management, production, and marketing skills. In an earlier era, very little was required in terms of marketing what was produced; it’s very different today. Farmers are operating on razor thin margins, with very little room for error.
In the farming of the future, intellectual capital will be as critical to success as financial capital, says Bert Greenwalt. “The next generation of farm managers will face a much higher bar — and they will need a much more sophisticated skill set,” he said at the annual meeting of the Mississippi Agricultural Economics Association.
“The economies of scale have encouraged farm expansion and consolidation, and producers who have superior skills in management, marketing, and other areas will have a comparative advantage. Those who aren’t skilled in these areas will need to get outside assistance.
Greenwalt, who earned his Ph.D. in ag economics at Mississippi State University in 1991, is now a professor in the College of Agriculture and Technology at Arkansas State University and continues active in the long-time family farming operation at Hazen, Ark. He also is a member of the Federal Reserve Bank of St. Louis’ District Industry Council in the eighth district.
“More and more, we’re seeing large family farms operated by teams with diverse knowledge and skills who can cover all bases in production, marketing, finance, etc.,” he says. “If certain management roles can’t be filled within the family, they will need to be outsourced.
“The management team also needs someone from the outside to provide another objective, independent perspective in making decisions.”
Many trends and issues now have an impact on agriculture and agribusiness — consolidation, globalization, government regulations, greater capital/financial requirements, advances in technology — and, Greenwalt says, “Every farmer now is confronted with a need for management, production, marketing skills. In an earlier era, very little was required in terms of marketing what was produced; it’s very different today.
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