The Pride Factor In Agriculture Has A Price

What has been the driving force for progress in agriculture? There are many, but one is that farmers compete with their neighbors. It’s not hard to see why.

It is difficult to name another profession where the neighbors all do the same thing for a living, where each farmer has roughly the same raw material (land), the same economic environment (market price), and the same physical environment (weather) with which to contend.

The differences in farms lie in appearance, size and application of management practices. To the practiced eye of a farmer, the management ability and the success of a farmer are visible from the road. Looking over the fence can be a useful tool for learning new ideas.

Farmers judge each other by what they can see. What they can’t see, they can hear about, either from the farmer's own lips or from the big table at the local café. The only thing farmers don't know about their neighbors is the size of their bank accounts. Besides land becoming available, that is the ultimate secret in a rural community.

Pride is seductive. It is easy to see how new equipment, the appearance of buildings, and the size of the farm are seductive as farmers judge their worth. They know this because that is how they judge others. To be first out in the field and the first done with harvest isn’t just being efficient but is also a source of pride. This is noticed. Management decisions are open to view across the fence line. In such an atmosphere, one is tempted to live by appearances.

The usual signs of success in urban life, such as clothes, trips, fancy homes, new cars and lavish hospitality, are impractical and might be subject to criticism in rural communities. But with an increased exposure to media, rural people feel a competitive need for the same quality of life and conveniences they perceive urban and suburban dwellers have.

The demands of farming are such that long hours are the norm. Many farmers have little else they like to do - or feel as much satisfaction about - as their farm work. How can they reward themselves for this life of sacrifice and hard work? The psychological boost they give themselves is new equipment and improvements that make their farming a little easier. These improvements also have the added benefit of being seen by other farmers.

Gaining perspective. A farmer shared these comments on how the financial crisis in agriculture changed his view of why he does things.

"Things have been turned upside down. We used to compete with other farmers for land, progress, prestige, accomplishments and to make things bigger and larger. The banker was our friend, sharing in that growth.

"Our neighbors were envious and tried to keep up with us. Now we farmers are in the same boat and compete against the lenders and the suppliers for the disappearing wealth. We've learned to circle the wagons and do some soul-searching. We’ve sorted out our priorities. We’ve learned to cut corners and be creative in our efficiencies. We've had to deal with realistic values, no matter how pretty the paint."

Another farmer described how he chose not to compete with his neighbors.

"My adjustments were made way back. I reached a point in life in which I was satisfied. I didn’t get greedy. We were satisfied with what we were and what we did. The pride factor has a price. The idea of bigness ruined more people. We wanted to grow naturally.

"I plan my improvements for the year. If something comes up to interfere, I can wait another year. I try to stay with the times. The innovations I try have to be within the possibility of the economy I live in."

Off farm investments. One grain company executive described what he sees as the biggest problem in the way farmers manage their assets. He feels that too many farmers reinvest their profits into capital expenditures on their farms and don't set aside enough of a cushion to ride them through a couple of bad crop years: bad weather, poor prices, major breakdowns, etc.. To him, liquidity of assets represents a major strength in coping with the unforeseen.

He has seen too many farmers reinvest the profits of a particularly good agriculture year right back into capital improvements. This may leave the farm even more precariously short of liquidity during hard times.

Following your own convictions. Perhaps pride, competition, and self-reward have something to do with this impulse to plow the profits right back into the farm. However, the ultimate goal in a highly competitive business is to still be in business. This means hard-nosed decisions and following one’s convictions regardless of how it looks to the neighbors. Those who are in solid financial shape now were often laughed at for their caution and conservative ways during times when others took big chances.

Looking good in the eyes of the neighbors or in the community is a false standard upon which to make management decisions. The test of management is to utilize knowledge, skills and resources to find a niche in the marketplace that will result in a profitable enterprise. This task alone is daunting enough in today’s agriculture and should light competitive fires and push people to be their best without needing to look over the fence.