In farming, it's the small stuff that counts

By MANDY SPIKES | Central Texas Edition

October 9, 2003 -- When a person decides to become a small farmer, dreams of having a successful and profitable business are the first thoughts that come to mind. What they might not think about are the problems and difficulties that unexpectedly come up while owning it.

John Robinson gives insight into why many small farms fail during the Horticulture Food Crops Symposium, held Sept. 29-Oct. 1 in College Station. -Staff photo by Spikes

John Robinson, Extension economist, addressed the important issue of why many small farms fail, when he addressed a number of participants attending the Horticulture Food Crops Symposium, Sept. 29-Oct. 1 in College Station.

Robinson began his presentation by telling participants that his topic should be called the advantage and disadvantages of small farms and how to take advantage of the former.

"There are many characteristics that make up a small farm, yet many people don't think of these factors when dealing with their farm. These farms have smaller cash reserves and so they have less ability to negotiate for better prices."

If a farmer has problems that arise, then there is less room to screw up, he explained. These farms are also relatively more dependent on family labor. "Family labor can be a problem when you don't communicate properly and things are not delegated clearly. If you don't tell your family your business plan, how do they know what you want them to do."

The one advantage to having a small farm, he stated, is the farmer has more focus. "It's easier to run a small farm if there are fewer people there."

A business plan, according to Robinson, is a written document that outlines realistic and measurable goals and objects, has a realistic financial management plan, marketing plan, and contingency plans. The plan should also include specific job assignments and responsibilities.

"A business plan is important because it helps you remember good ideas. You are also able to organize and integrate your thoughts." Other reasons include being able to communicate their thoughts to others, especially family members, helps to make rational decisions during emotional distractions, and effectively deal with contingencies.

One disadvantage that occurs when owning a small farm includes there being a lack of management ability. "Excellent producers have failed from a lack of effective business management ability."

Other issues that can lead to a small farm's downfall are a result of poor financial management. These issues include a farmer's overdependence of collateral, improper loan structuring, lack of an effective marketing program, and tunnel vision toward production technology.

"Remember, when you own a small farm, you can't take things for granted. You must communicate. Above all, you must be focused in your operation. It's the one advantage that you have," he said.