A Suggestion

[BeginningFarmers]

Hey all,

I was thinking about the issue areas or whatever we are calling them
and wanted to make a suggestion, because I am still a little bit
confused by 'inputs' and 'outputs' in terms of they are split up,
potential redundancy with other factors, etc. What would people think
about this as a revised list of categories instead?:

- Sourcing & Marketing - This would deal with the purchase of inputs,
and with product sales. One issue we didn't talk about today that I
think might be important is the potential for cooperative buying and
cooperative marketing agreements/alliances between farmers (where
appropriate).

- Risk Management

- Resource Efficiency - this would deal with the efficient use of
products on the farm that aren't marketed

- Cost Accounting/Audits - this is where we would deal with the yearly
P&L statements and with externalities (however we decide to handle
them). And this is the item in which I see us building a flexible
worksheet template (to make the job easier, and applicable tor farmers
of all sizes, types, and regions).

- Income Diversification - I see this as different from marketing
because I think it could be the place where program payments (public
or private) could be included. And because I think it speaks more
directly to product diversification.

- Farm Succession Planning

Please let me know what you think.

Taylor Reid

[Russell Williams]

Taylor,

I broke out Inputs and Outputs to draw specific attention to the unique
role they have to save or generate additional income. I am not wedded to
the labels by any means, but I think they are significantly different to
address separately. I also think this parallels resource efficiency both
from what is marketed and from what remains on the farm to add value to
the producer.

I would suggest "Cost Accounting/Audits" be changed to Financial
planning/management. Cost accounting has not been agreed to by the
subcommittee as the appropriate way forward yet, so I would keep it more
general.

Income Diversification is an interesting addition. I didn't think about
programmatic payments. I am not sure how we can measure this in terms
of sustainability, but it warrents a good discussion.

I am fine with farm succession planning, but it could also be made part
of the Financial planning/management subgroup.

Anyone else have thoughts?

Russell

[Endres, Bryan]

All:

I agree with Russell's thoughts with just one exception--farm succession planning. I think it warrants a separate "issue area" rather than placement as a subset of financial planning/management. Succession planning is quite complex and incorporates many issues beyond what I currently envision in financial planning/management. If we later determine that it belongs in FP/Mgmt, then we could merge it at a later point in our discussions.

Bryan

[Russell Williams]

That's fine by me Brian. Good points.

[Beginning Farmers]

Russell,

I don't totally understand from your response what you are suggesting the categories be, whether you agree with any of my suggested changes, and if so, which ones.

I've never been able to find the document where you suggested the principle and initial categories, which is perhaps contributing to my confusion.

I do understand (and agree) that financial planning/management may be a better category than cost accounting/audits.

And it sounds like you want to maintain inputs and outputs as separate, specific categories.

I think I understand your reasoning, but am not totally clear about what each might include or measure.

Do inputs refer simply to use of purchased products/existing resources in production? Do they include infrastructure/equipment investment decisions? Would this category include 'sourcing'? How might it be measured?

Do outputs simply include marketed and non-marketed farm products? If so, Would externalities be included in this? And aren't some outputs that are not marketed, (biomass, compost) actually also inputs?

Basically I agree that inputs/outputs have an important role (in understanding both the generation of additional income and the limiting of expenditures). But I see them as being applied within the broader categories that I suggested. Specifically, inputs and outputs may be a useful way to measure 'resource efficiency', 'income diversification', and/or 'financial planning/management'. For example, I included 'resource efficiency' because I thought it covered both judicious use of inputs, and the potential for non-market outputs (among other things).

I think any program payment (public or private) has the potential to increase economic sustainability in the short term, but they also have the potential to lock growers into particular production/marketing systems/decisions which may affect adaptability (whether we're talking about ACRE, DCP, CRP, or ecosystem services) which is why I chose 'income diversification' rather than strictly program payments as a category. In my thinking this category would also include much more that just payments. And it is another one in which consideration of inputs and outputs might be useful.

I'm not wedded to the categories I suggested, nor do I necessarily oppose the original list. I am just trying to understand what you and others envision specific categories to entail, and am looking for ways to delineate them that include the breadth of ideas we agree are important, while limiting redundancy and maximizing clarity.

Taylor

--
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[Amanda Raster]

Hi, Taylor –

 

I believe the document you are looking for is attached. Russell sent it to the full economic subcommittee on May 13^th. (Russell, please correct me if I am wrong).

 

Thanks,

Amanda

[Beginning Farmers]

Thanks Amanda,

This makes a lot more sense to me now. Look forward to talking to you all more about this tomorrow

Taylor

[Russell Williams]

Taylor,

 

It seems that the email Amanda sent around cleared some things up for you. I am glad.

 

I wanted to respond to a couple things you said below.

 

On externalities. There has been no agreement on whether or not to include externalities, cost accounting or any other component of ecological economics. I did not write that paper with inclusion of those things in mind. That being said, I would assume externalities, if included, would warrant their own set of criteria. I wouldn’t feel good about embedding them within other parts. I feel that people have a right to know exactly what these sorts of calculations entail along with their positive and negative impacts.

 

Program payments, be it public or private, have an impact on how farmers farm and what products they choose to produce.  That in and of itself is not a problem.  This standard is designed to be site specific, so farm payments, either Title I or EQUIP or CRP are really inconsequential. They will be measured against a specific set of performance based criteria and I don’t see why the existence of payments should impede with this.  Payments for any action are subject to political/consumer winds.  Farmers have undoubtedly modified their operations to qualify for programmatic payments, but while those payments are still being offered, farmers will take them.  We have to be very careful how we address this issue as it could push most farmers away from the standard if we came to negative conclusions.

 

Russell

 

 

From: econ-def...@googlegroups.com [mailto:econ-def...@googlegroups.com] On Behalf Of Beginning Farmers
Sent: Monday, May 31, 2010 6:36 AM
To: econ-def...@googlegroups.com
Subject: Re: A Suggestion

 

Russell,

[Beginning Farmers]

Thanks Russell,

Yeah, seeing that helped me understand your thinking. Not sure why I couldn't find it in my e-mail or the discussion group. We will obviously talk more today about out list of 'issues', 'principles' or whatever we want to call them. I understand your point on externalities. And though I don't think program payments exactly inconsequential - because they affect adaptability, crop diversity, planted acreage, and the farm's bottom line, I do understand your points with regard to site specificity and performance criteria. Look forward to the call.

Thanks again,
Taylor

[Russell Williams]

·         Management Plan – Sustainable farm operations should maintain a robust financial and management plan in order to capitalize on opportunities, prevent/mitigate threats, address weaknesses and build upon existing strengths. (SWOT Analysis).