Economic Definitions Writing Group Conference Calls

[Amanda Raster]

Hello everyone –

 

The Economic Definitions Writing Group conference calls have been scheduled for May 25^th and June 1^st at 2:30 pm EDT / 1:30 pm CDT / 11:30 am PDT. Please reserve these times on your calendars. Each call will last 90 minutes.

 

The dial-in information for both calls is below. Please contact me if you have any questions.

 

Dial:  1-800-371-9219

Passcode:  2839931#

 

Thanks,

Amanda

 

Amanda Raster
Sustainability Standards Development
Leonardo Academy Inc.
Office+     (608) 280-0255
Direct+    (608) 310-3135
Mobile+   (608) 852-6720
Email+     ama...@leonardoacademy.org
Web+      www.leonardoacademy.org

 

[Eric Landen]

Hi everyone,

I may have to sit out today's Econ Definitions call (sorry), a family commitment has inadvertently readjusted the schedule today.  If I miss today's call I will pick up the conversation soon afterwards.

-- Eric

[Russell Williams]

I have been racking my brain for a benign enough principle statement so we at least have something to work with today.

 

I have incorporated the idea of profitability with planning that considers a long time horizon.  I have also highlighted the need for balance between the three pillars. 

 

“Farms are not sustainable if they are not profitable.  Sustainable farm operations seek to balance environmental and social concerns in ways that meet economic objectives in the short, medium and long-term.” 

[Eric Landen]

Russell,

This is great, thanks for getting us started.

One thing that's been nagging at me for awhile is the need to consider multiple time horizons:  the need to remain profitable in the short-term (i.e., turn a profit this year) while balancing this against not drawing down the  (natural capital, intergenerational equity, whatever you want to call it) that allows one to be profitable in future years.  This is in keeping with the "short, medium, and long-term" that you mentioned.  The part that's been nagging at me is the need to be more concrete than simply "short/medium/long-term"

Could we have a conversation about some possibilities for what constitutes short, medium, and long-term?  So that at some point we can eventually put together some tangible models/examples/formulas (etc.) for how to balance the 3 time horizons.

How about this:

short-term: this year

medium-term: 10 years

long-term: 50 years

-- Eric

[Jody Endres]

Russell, Eric, et. al.:

 

I think we might want to avoid pegging specific time horizons in the principle statement, or examples that might follow.  No other subcommittee has tackled measurement parameters in principle statements, and it might be premature to do so until we can aggregate and analyze values from finalized environmental and social metrics.  Can’t we work through this question when we discuss how various models treat the temporal variable?

 

I propose something like this:  “Sustainable farming operations balance financial viability with environmental and social considerations contained in the Standard”  or “Sustainable farming operations balance environmental, economic, and social considerations through short, mid- and long-term management planning.”

 

Jody

[Russell Williams]

Eric,

 

I understand your concern. In my opinion, this will be addressed as we layout a financial/operational planning model. Something that is more in the weeds than a general principle statement.

 

I am not sure specific time horizons (in terms of years) are appropriate, at least not for the long term portion.  That could be addressed though plans for retirement, passing the farm along to family, placement into farmland trust program and so on.  We should take care here though to not require any specific long term action as a prerequisite for certification. This will most assuredly push producers away from the standard.

 

For short and medium term, those are much simpler to illustrate with a number.  I would suggest short term be 1 year, medium term 5-10 years, and then long-term 10-retirement. It is important to note that all of these timeframes are moving targets. As each year passes, a year is extended on the medium-term plan. As a practical matter, many of the medium-term plans will be similar for a number of years, but I can imagine that after 5 years of certification, my medium-term goals would change. We could entertain the idea of periodic reviews of economic goals so farmers do not have to address the medium and long-term every year.

 

As for 50 years being long-term, I am not sure this works.  The average age of a farmer in the US is 55 years old.  I am not sure many have plans for when/if they reach 105 which is why I think it would be more appropriate to speak in term of retirement planning.  

[Russell Williams]

You type faster than me J I couldn’t agree more that time horizons, especially medium and long-term, are problematic.  I have no problems with the 1 year, and really don’t have a problem with the 10 year though it begins to get a bit subjective at that point. 50 years is subjective and for many people fairly irrelevant.

 

I am amenable to either of your iterations, but I would like to maintain the idea of profitability in some form or fashion.