The doctor will see you know
Over the past 10 years, Dr. David Kohl has become a familiar and trusted voice among Canadian farmers.
Sponsored by RBC Royal Bank®, this Virginia Tech agricultural economist has crossed the country many times, speaking to gatherings of producers and advising RBC Royal Bank farm clients individually.
"Whenever possible, I like to spend a couple of hours with a farm family at their kitchen table," Kohl says. "I enjoy hearing about their plans and challenges, and I try to contribute to their thinking about farm strategy."
Being a professor, Kohl always leaves the family with an assignment. In a series of follow-up sessions, he typically guides them through a process of analysis and decision-making about the future of the farm. The heart of the program is the development of goals and strategies for their business, family and personal life.
Based on production and financial data provided by the family, Kohl benchmarks the farm in comparison with top North American producers in the relevant farm sector. The experience is always an eye-opener.
"Producers learn a lot by seeing their own farm's data next to the best performers in the marketplace," says Kohl. "It gives them a very good sense of where they should be placing management emphasis in order to be competitive."
TAKE ACTION TO GET BETTER
Once the producer has a realistic look at the farm's competitiveness, Kohl wants action. What concrete steps is the producer willing to take to make the farm business better?
"Change is not for everyone," he says. "It can be difficult, even painful, but I'm convinced that the people who are willing to make changes will be more successful in the long run."
Over many years of kitchen-table meetings in two countries, Kohl has identified several signs that influence the long-term viability of a family farm.
Is there a written business plan? "I often meet producers in their 50s or 60s who indeed have a business plan," says Kohl. "The trouble is, the plan is in their heads, not written down, and it's rarely communicated with anyone."
Is the whole family involved? Kohl looks for families where all members of the business are invited around the kitchen table. Who speaks the most? Are other views encouraged and respected or is it a one-man show?
Are the generations in synch? Suppose the principal managers of a farm are a 65-year-old man and his 35-year-old son. Based on his experience with thousands of producers, Kohl believes the two are likely to see farming and life very differently. "Typically, the father works very hard and is focused on production," says Kohl. He married at age 21 to 24, and probably married a local woman with a farm background.
"The son wants to work hard mentally, rather than just physically. He's more interested in marketing and finance, rather than production. He likely married at age 27 to 32, has likely lived away from the farm and has married a woman who's not from the area, and perhaps without a farm background. He wants balance between work and personal time, in a way that his father has not really considered."
These two generations can be a powerful combination, but if each doesn't recognize and respect the other's values, it can be a recipe for conflict in the business and the family.
Is there commitment to follow through? Kohl recently performed the kitchen-table exercise with a farm family in Atlantic Canada. He recommended that both husband and wife attend an executive school for North American farm managers to help them acquire the skills they'd need to make key changes to their business.
"They were thrilled by the prospect of getting this type of education," says Kohl, "and that tells me they're likely to succeed. In my experience, attitude is everything, and when producers believe they can succeed, they usually do."
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