1999 Farm Financial Conference Summary
Farm Business Management Update, February 2000
By Mike Roberts
As a result of continuing low commodity prices, droughts, hurricanes Dennis and Floyd, and subsequent rains, many in Southeastern Virginia have suffered tremendously. Businesses are treading turbulent waters and, in some cases, trying to survive mortal financial wounds. In light of these circumstances, farm business managers repeatedly asked the question "How are we going to survive?"
Farmers need answers and help navigating the waters of government programs. Many programs are available to assist the farm business owner/manager. Many programs overlap and are often confusing, which is sometimes the trouble. Some farmers know how to work with the system to efficiently manage their business. Most do not.
Government programs and specifications often change from one year to the next, especially when natural disasters occur. In 1999, Congress passed legislation containing additional aid to assist those ravaged by disaster, as well as attempt to resolve other inequities plaguing agriculture. President Clinton signed the package into law. Financial tools are in place that the astute farm manager may use to manage the business' bottom line.
In December 1999, three Farm Business Management Extension agents in southeastern Virginia took proactive action to educate farm managers regarding several financial tools available for them to use in managing risk. Several Farm Financial Conferences (FFC) were held across Southside Virginia. Information from five major sources was presented that outlined several risk management strategies managers could use to identify and utilize many different sources of money available to them. The conferences had four segments:
|1. Government programs||-||Lending Government funds distribution|
|2. Conservation Funds||-||Natural Resource Conservation Virginia Department of Conservation & Recreation / Soil and Water Conservation District|
|3. Crop Insurance||-||Risk Management Agency|
|4. Farm Business Management||-||Virginia Cooperative Extension|
Thematic questions for each segment were:
a) What money is available?
b) Who qualifies for the money?
c) How does the farmer get the money?
All speakers were from the national, state, or regional level. Representatives from local government, lending institutions, equipment dealers, and insurance companies were on hand at every conference meeting to answer locality-specific questions, as well as to help participants sign up for financial programs.
Each participant and sponsor was given a resource book. The book is divided by program segment. The first two pages of each section contained a summary of speaker comments germane to that topic. Behind each speaker's comments were several blank forms. These forms represented information a farmer would need to have or be familiar with if he or she wished to apply for a particular program.
One hundred fifty-one farmers participated representing 111 farms. Forty-nine sponsors, educators and vendors also attended. Eighty-six percent of the participants stated the meeting was very timely and very useful, and 87 percent rated the quality and clarity of the information excellent.
Participants were asked what they found most useful from the meetings. The following was noted:
Other comments identified the usefulness of the crop insurance examples and stated that they had never thought of tax management as a source of cash. Seventeen percent of the participants said they found the conservation segment not very useful because of the competitive distribution of conservation program funds.
Business owners were asked to consider one thing, if any, they might change as a result of attending the meeting. Thirty-six percent declared they would make a business plan and set goals for the business; 33 percent would explore Farm Services Agency programs further; 13 percent would buy crop insurance, and 8 percent would explore ways to find cash in conservation programs.
Other comments received from participants:
"I liked the Farm Business Management section. It really got me to thinking that I run my farm like a 'way of life.' I want to run my farm like a business by developing a 5-year plan and also by taking advantage of all the programs. I will be visiting all the different agencies."
"I have changed my mind about CRP programs. Before, it all this seemed so confusing. I need to take advantage of more programs."
"The local FSA office can expect a visit from me. I really have fallen down on the job of running my business. All the speakers were informative and helped me to realize that there may be some help for me by piecing all the parts of the puzzle together. Why must farming be so complicated!"
"I have struggled for a long time on the farm. Things just seem more complicated. The speakers did a great job of presenting the information tonight, but it makes me realize that there are so many things to manage when running a farm and business. I will probably just sell out. I'm tired of low prices and bad weather. It just seems to me that there's lots of stress involved in trying to put together all these pieces."
"It would be very useful to make this an annual meeting."
"This meeting was the best reason I've ever had for driving three hours. It provided very timely information and was put together nicely into one resource book."
"As a result of this meeting, my wife and I decided not to sell the farm. We realized we aren't doing anywhere near what it takes to run a business. We have been very encouraged. The Farm Management agent can expect a call from us! Thank you very much for this meeting!"
The 1999 Farm Financial Conferences were very useful and timely. Participants were made aware of many important avenues for managing risk by utilizing various means to find sources of cash for the farming business. The future will most likely bring changes to these programs and may offer new opportunities for efficient and profitable risk management. The 2000 Farm Financial Conferences will take place, as need or demand dictates.
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