Farmers, How Do You Live With Risk?

An awesome responsibility of farmers is to reduce risk in a business environment that is inherently competitive and risky. Production has to be good. Cash flow is important. Marketing is crucial. The potential is there to make good money and have really good years.

The downside is that farming can have major losses even when the decisions are sound. It is a nervy, high stress way of making a living. Add to that how much farmers love their profession and rural, family based lifestyle, and strong emotions enter the decision-making process.

What to plant? When to plant? How to market? How to deal with equipment repair and replacement? What to spray and when? Fertilizers? Major land purchases? Is there enough work and income to support additional families? What about new technology and new ideas?

With the mainstream economy in recession, how will agriculture be affected? Where is alternative energy headed? Where are prices going to go? Will the cost of inputs come down? Has the boom gone bust too quickly? What will the weather bring?

Depression and anxiety can paralyze the decision-making process. Depression needs medical and psychological attention. Some farmers develop excessive worry or anxiety about their fears and decision-making. Obsessive worry can take the fun out of farming.

How do you reduce psychological risks as well as business risks?

- Seek information. Consult with knowledgeable people. Be a good listener. Attend conferences. Get "big picture" information about weather, markets, new technology, etc. Do a "pro" and "con" list but also take your "gut" feeling into account.

- Have consensus decisions on big ticket items. Persuade, educate and give your farming partners time to think through the issue and give their ideas. A family business meeting is ideal for drawing out ideas and developing a unified strategy on key decisions.

Some decisions (land, major equipment) may take months and even years before they are enacted. If decisions are made this way, there will be no "I told you so’s." Family members will share in the responsibility. Both sides of an issue need to come out with plenty of comparison information and shopping around to be done.

- Control business risks. Carry out experimental decisions on part of your operation before converting the whole enterprise to new ideas. Innovations need to be proven with first hand experience or based on proven results and research data from a trusted source.

- No second guessing. It is a matter of controlling the controllable and letting go of the uncontrollable. Once a decision has been made, detach from it and have the patience to sit back and wait. To second guess or blame oneself puts unnecessary agony and anxiety into farming.

There are plenty of day-to-day decisions to worry about without revisiting a decision you’ve already made. Make the tough decisions and then work hard to make the decisions the right ones. The time to rethink major decisions is only after new developments occur.

- Mistakes are normal. Mistakes are useful information upon which to make future decisions. Success is based on paying attention to mistakes and correcting them. Nobody is perfect. By trying things, people learn and improve what they are doing. As one farmer said, "We try not to make the same mistake twice."

- Look at your track record. You also benefit from your inner confidence in your overall decision making. Success builds on success. If over the years your decisions have generally been good, then new circumstances cannot intimidate you as easily.

You may not know the immediate answers, but you have confidence because you have risen to the occasion over and over again. Your experience in farming gives you the security of making decisions under stressful circumstances. Basic optimism goes a long way in life and in farming.

- Don’t farm on the edge. Decision-making is easier when you have an equity base and savings that enable you to withstand the bad years and capitalize on the good years. A lot of pressure can be relieved when you set aside savings or investments that can buffer hard times. The conservative use of money and the retirement of debt after good years sets you up for a calmer existence in the future.

- Seek advice. Farming on the edge has higher levels of stress as the threat of loss becomes more real. If you have high debt loads and a tenuous foothold in farming despite your best decisions, you will battle depression and anxiety.

If you are in this position, consult with outside sources for an analysis of your situation and be open to options and alternatives. Stress will moderate when people have hope and confidence that they have a good plan and that it is working.

- Step away from farming. Take time for quality family life, hobbies, community involvement, church activities, friendships, leisure and develop an ability to relax. Be a team with your spouse and make your marriage a source of pleasure.

You manage personal stress better by having outlets that go beyond work and farming. It will bring perspective to farming. If something needs to be done then you do it.

Decisions are the building blocks of life. The big ones take thought, communication and work. Then take a step back, watch, learn, adjust, have fun and go easy on yourself as circumstances unfold. Life is serious but not that serious.