February 2000 // Volume 38 // Number 1 // Ideas at Work // 1IAW4

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Collaboration Builds A Successful Farm Management Workshop

Farmers realize the importance of farm records in the day-to-day management of their businesses, but for a number of reasons they fail to use their basic records for management purposes. The Tuscarawas County office of Ohio State University Extension, along with two local lenders and the local Career Center, developed a financial records short course to teach farm managers about the basic financial statements. The five- week course included lecture, discussion, and practical hands-on application using a sample farm. Based on a pre-test/post-test, participants indicated an increase in knowledge and stated they could apply the concepts taught in the workshop to their own farm records.

Christopher T. Zoller
Extension Agent
Agriculture, Natural Resources/Community Development
Ohio State University Extension
Tuscarawas County
New Philadelphia, Ohio
Internet address: zoller1@postoffice.ag.ohio-state.edu

Financial records are an integral part of the long-term success of farm businesses. Properly used, farm records can help managers monitor production costs, analyze production enterprises, and make well informed management decisions. However, in too many cases, farmers keep records simply to satisfy tax requirements and fail to take the next step in using their records for management purposes.

A collaborative effort between the Tuscarawas County office of Ohio State University Extension, the Buckeye Career Center Farm Business Planning and Analysis (FBPA) Program, the local Farm Service Agency Ag Credit office, and the local branch of the Huntington National Bank helped create a successful farm management workshop. Planning meetings were held during the fall and winter of 1998 and 1999 with each of the cooperators to plan the workshop. During these meetings, the planning committee established workshop objectives, developed the curriculum, and developed a strategy to attract participants.

The workshop title, "Progressing to Profitable Performance," was selected to convey a message of helping producers achieve financial goals and taking action for their financial future. The curriculum was based upon materials developed by the Farm Financial Standards Task Force and included an in-depth discussion of each of the major farm financial statements: balance sheet, profit and loss statement, and income statement.

Farm managers consider this an important topic, but other commitments or deadlines prevent them from attending this type of workshop and the planning committee was concerned that attracting participants would be difficult. In addition to the traditional newsletters, radio announcements, and newspaper announcements, the planning committee identified specific individuals to invite. Lists of potential participants were developed from FBPA client lists, Farm Service Agency borrowers and Huntington National Bank borrowers. These lists were merged and the Huntington National Bank sent a letter of invitation.

Workshop objectives included an introduction to each of the farm financial statements, a discussion of how each of the financial statements is organized and constructed, and intensive, hands-on exercises using a sample farm to teach the concepts.

The planning committee decided to hold these two and one-half hour workshops one day per week for five consecutive weeks. Each session began with an introduction for the week and was followed by intensive, hands-on instruction. The first session began with the balance sheet, the most basic farm financial statement, and was followed by the income statement, statement of owner equity, cash flow statement, and a final session on financial analysis. This format allowed participants to understand the interrelationship of each statement and how one statement builds on the next.

Included in each session was a discussion of financial ratios that can be calculated and measured against established standards to measure performance and take corrective action. Part of one session was devoted to a question and answer period with the three lenders participating in the workshop. This proved to be a popular part of the workshop.

A post-workshop evaluation revealed a very favorable response to the workshop. Participants indicated they had learned new information and were better able to use the workshop information with their own farm financial records. On a scale of one to four (1) being poor and (4) being excellent) participants indicated their knowledge of farm financial records at 2.1 prior to the workshop and 3.2 following the workshop.

Collaboration with all members of the planning committee occurred through the joint efforts to make the program a success. Each of the planning committee members saw the objectives of the workshop as being important and each was committed to make the workshop useful to participants. This collaboration used expertise from many people interested in the long-term success of farm managers and provided participants with new skills to improve their management abilities.