Stick with what you know
- June 2004
This Opinion was featured in the June 2004 issue of the the Anglia Farmer
Sometimes it is best to stick with what you know. David Walker asks whether farming families have the skills to diversify.
Many farmers, perhaps the silent majority, believe talking is best left until after dark, or when the weather is too bad to do anything useful. They probably don’t have much to say about diversification, let alone much good.
But hardly a report gets published these days without "diversification" being promoted as at least a part answer to the low farm income challenge. The Curry commission’s "Farming and Food - a sustainable future" was typical.
It suggested "that the available strategies for profitability are likely to boil down to some combination of three things: driving out unnecessary costs; adding value; or diversifying the business." "Driving out unnecessary costs" makes sense any how, any time and any where. And "adding value" is really diversifying in a different dimension, up or down the market chain, rather than across it.
Adam Smith, the eighteenth century economist and the author of "The Wealth of Nations," however, espoused "the physiological differentiation of labour," the opposite of diversification. And this seems to have served the world economy very effectively for more than two hundred years.
His hypothesis was that individuals are likely to be more productive if they limited themselves to one or a few activities. Employees in large organization tend to have quite narrow responsibilities, while small businesses tend increasingly to stick to the basics. The days when the ice cream vendor made his own ice cream have long since past.
In the same vein the farm with more than a few crop and livestock enterprises is just a memory. Nobody has the time to bother with a few chickens or pigs clear up dross corn, or few acres of cereals to met their own livestock feed needs. And beyond this, activities such a crop walking, servicing machinery, mucking out yards and even the role of bull are increasingly contracted out by most farmers.
The question then arises as to why those who are seen to understand and to be visionary are so enamoured by the apparent about turn of diversification. Surely many, but far from all, farmers have resources that could be more effectively used for non farm purposes. Disused barns, redundant farm cottages, paddocks not suited to conventional grazing, and even the spare bedrooms in the house are, of course, some of the examples most commonly suggested.
The real question is whether farming families typically have the time and skills to develop these resources. Getting involved in such diversification ventures may make as much sense as operating a combine for a 50-acre harvest - only likely to be profitable if you have the time and ability to find and harvest another 500 acres under contact.
And the challenges are, in fact, probably greater than this as the skills needed are likely to be rather different to those normally used on the farm. Farming as often as not involves getting a relatively well defined job done during a narrow window of opportunity. Farmers’ skills in more nebulous activities such as planning, promotion and public relations, on which typical diversification projects are very dependent, are often much less developed.
That this aspect has not received much attention is not surprising. Farm leaders are naturally selected on such skills and getting into farm politics can itself be regarded as something of a diversification project.
Hence, the farm leaders who sit down to come up with solutions are better equipped to diversify in the first place and have surely taken the first tentative steps in this direct. It may, therefore, be difficult for them to appreciate the full ramifications of the diversification answer they are suggesting for others.
June 2004
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