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SW Crops Conference: Farm programs labeled outdated business model

Tom Dorr, senior adviser to the Secretary of Agriculture, came just short of saying traditional farm programs have outlived their usefulness during his keynote address at the Southwest Crops Production Conference and Expo in Lubbock recently.

Dorr said farmers may need a better way to manage their business than by following a “seven decades old” farm program. He cited financial management and leadership expert Peter Drucker's formula for a successful business model.

“Drucker said the most crucial aspect of management must be to understand what the customer wants and then determine how to meet that demand. He also said innovation and entrepreneurial activity” are key elements in business management.

Dorr said a business plan lasts about 10 years. “After that, we have to start all over. Seventy years ago (the U.S. Government passed) the first agriculture support act. And farmers and ranchers have been following that same business plan for seven decades.”

Dorr said the time from 1964 through 1979 was a “golden period for agriculture.” Increased demand for food and fiber followed the economic boom after World War II.

“A series of crises from 1979 through 1984 extracted the excess liquidity from the economy,” he said.

He said weather and economic cycles currently threaten the agricultural economy. “But we've initiated a number of policies to help.” Dorr said the farm bill enacted in 2002 had a significant impact on farmers, as did tax cuts.

He said conservation initiatives in the most recent farm legislation, as well as in previous programs represented society's “distinct interest in how we manage our resources.”

That interest, he said, holds “significant implications for production agriculture.”

Dorr said the next farm program will be written by new legislators, most of whom will not represent rural America. Population shifts have moved the sphere of influence into suburbia, he said.

“The year 1990 marked the first time that 50 percent of our population lived in the suburbs,” he said. “In 1994, the leadership positions in the U.S. Congress came from suburban districts. In 1999, only 76 congressional districts were rural and in 2000 most American lived in the suburbs.”

That erosion of rural voting strength affects agriculture. “Their (suburban dwellers) interests are significantly different from rural issues.”

Dorr said agriculture will survive through technology and moving to value-added products.

“Renewable fuels, for instance, is an industry that has arrived. It's not in an experimental mode. It is here and it will stimulate rural America.”

Dorr said farmers and ranchers must not use their resource base carelessly. “Farmers must use those assets to leverage value-added opportunities.”

He said ethanol would provide opportunities to take advantage of rural resource bases.

Dorr said as the population dynamics and markets change and trade issues become more important, farmers can't rely on “a seven-decades old business model. But the entrepreneurial spirit is as bright (in the United States) as it has ever been. Very few countries have ever had an entrepreneurial spirit.”


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