The Rural Voice, 1991-09, Page 36DECIDING ON ALTERNATIVES
If your farming operation isn't giving you a satisfactory living,
maybe it's time to make some decisions to change. You could
get an off -farm job, grow an alternate crop, or, quit farming
by Heather Linington
Farm management is a large piece
of my job as agricultural represen-
tative. I work with farm families with
a wide range of profitability -- every-
thing from counselling those who have
to leave the business, to those who are
making so much profit they are look-
ing at other investments and ways to
minimize tax.
What are the factors currently
facing agriculture that are making it
difficult to be successful doing the
"same old thing?"
The obvious answer as to why
alternatives are necessary is because
what we're currently doing hasn't
been profitable enough to meet our
goals.
If we look at the Ontario Farm
Management Analysis Project from
1989, it shows the trend for the past
six years for the average net farm
income based on information from:
- swine farrow to finish — 90 farms
- feedlot — 170 farms
- cash crop — 54 farms
- dairy — 501 farms
There have been tremendous fluc-
tuations in net farm income. How do
you survive the big dips? For some,
one of the alternatives might be to
diversify with more than one source of
income. When the bottom falls out of
one commodity, there is something
else to fall back on.
The numbers in the analysis pro-
ject represent only a part of Ontario
farmers — and within each commod-
ity, we examine the average. The
project does separate out average as
well as the top 1/3 based on net farm
income. When you take the top 1/3
out and look at what the other 2/3 are
making, the difference is fairly drastic.
From net farm income, they need
to pay principal, get their family
living, and make capital purchases or
improvements. For the two thirds of
feedlot and cash crop operators,
$8,571 or $5,917 isn't too large to
cover all those things!
According to an article in the
Globe and Mail, December 19, 1990,
the poverty line for a couple with two
children in Ontario is $26,801. Those
on farms don't need as much as our
urban counterparts because we have
housing and part of the heat, plus
some vehicle expenses, and maybe
some food covered from the farm - but
it does give us something to think
earning no income, it becomes only a
place to work for no pay. How many
people do you know who would go
$400,000, $200,000, or just $100,000
into debt so they could have a job for
no pay?"
Duane Acker, of South Dakota
State University, says the role of
management in farming is the same as
in any business — to put together
resources to maximize income or
satisfaction.
If I asked you why we aren't
Dairy
Swine
Feedlot
Cash Crop
Net Farm Income
Average
$46,980
$35,235
$31,097
$19,487
Top 1/3 Remaining 2/3
$85,020 $27,960
$70,564 $17,570
$75,524 $8,571
$49,022 $5,917
(from the Ontario Farm Management Analysis Project 1989)
about.
Ernie, of Dauphin, Manitoba, who
found himself needing to make some
decisions, says: "If the farm is not
earning enough income to service
debt, cover cash costs and living costs,
something has to be done. When an
individual is in a financial situation
that is, at best, bleak, the best thing to
do is sit down and consider the three
"If the farm is earning no
income, it becomes only a
place to work for no pay."
most important things in life. Write
them down and see if the farm is one
of them. If it isn't, there should be no
doubt as to the result. If the farm is
making enough money, what would
you tell me? Possible answers are
GATT, government, weather, sprays
don't work, prices too low, interest too
high, fertilizers going up, etc. It is
hard to change some of these things
because we don't have any control
over them — but there are things that
we have control over to minimize the
risk associated with them. Eleanor
Wood, a dairy farmer from Troy, is a
graduate of the Dale Carnegie pro-
gram and she is a firm believer in "If it
is to be, it is up to me." This is true in
that each of us controls our own des-
tiny through choice. If I don't like
something, I do have an option — to
change. Change may not be easy in
the short run, but if we want some-
thing to happen, it can.
What we're really talking about
32 THE RURAL VOICE