FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE)

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  • 277

    FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE)

    J o h n p x Wye College (University of London)

    This review begins by summarising the origins of the subject in the UK and USA. I t really took o f f in Britain after 1950. The 1960s witnessed a shift of emphasis by university agricultural economists away from farm management; other organisations established farm management departments. After discussing the present scope of the subject, recent and current research and developments are reviewed. In farm accounting and analysis there have been few changes in the past twenty years, except for electronic data processing. The tremendous interest in and development of farm programming methodology during the 1960s has declined in recent years, with a move towards re- search with a more immediately practical potential. The systems-simulation approach, decision. analysis and micro- computers have created particular interest. Finally, research areas likely to be of special concern in the future are considered, and the review concludes b y discussing the success or otherwise achieved by the subject to date.

    Do I say man is not made for an active life? Far from it. But there is a great difference between other mens occupations and ours. A glance at theirs will make it clear to you, All day long they do nothing but calculate, contrive, consult how to wring profit out of foodstuffs, farms and the like. But I entreat you to understand what the administration and nature of the world is, and what place a being endowed with reason holds in it; to consider what you are as a person, and in what your good and evil consists. EPIC~ETUS (AD 55-135)

    So - the subject-matter of Farm Management goes back a long way. And i t is as well to be reminded at the outset of the necessity always to remember the broader horizons.

    This seems as reasonable a time as any to be asked to provide an overview of the subject - where we have been, where we are now and where we are heading. It is a long time since such a review took place in the Agricultural Economics Society. In 1956, Jock Currie reviewed 50 years of Farm Manage- ment. Before that, a great deal of heart-searching had taken place at conferences of the Society as to what those engaged in the Agricultural Economics profession ought to be doing. In 1954, Edgar Thomas reported that 13 papers had been given to the Society since its inception (in 1926) on the scope of the subject, which represented one paper in twelve. Particularly formidable was the contribution of John Maxton in 1940 under the heading Professional Stocktaking, which filled no less than 39 pages of the Journal: well over 25,000 words. His summary alone exceeded the maximum length I have been permitted in this review.

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    A little history Who is to say when the subject of Farm Management began as an academic profession? In Curries view, it started in the UK in 1913, when Orwh was appointed as Director of the Oxford Agricultural Economics Research Institute. Ten years later, 1923, saw the establishment of the Agricultural Economics Advisory Service, the forerunner of the Provincial Agricultural Economics Service.

    Early developments in the USA, which have been very fully documented by Case and Williams (1957), appeared to be nearly thirty years ahead of us; (by no means the position today! ). As far back as 1880 a book was published with the title Farming for Profit (Read). In 1893 both the Nebraska and Texas experiment stations published data on crop costs (Ingersoll and Perin; Curtis and Carson). Other centres followed suit before the turn of the century. In 1909 a USDA bulletin called Replanning u Farm for Profit appeared (Beaman Smith and Froley), and the following year saw the formation of the American Farm Management Association. Warren at Cornell, Boss at Minnesota and Spillman at the USDA were early leaders in farm manage- ment research. Cornell was first with farm management surveys, beginning about 1910. The first textbook in farm management is generally attributed to Warren in 1913, although a text with that title was produced by Card in 1907, Henry Taylor having produced the first book on Agricultural Economics in 1905. About 1910 economists joined the farm management scene, which had previously been occupied only by agronomists. In 1926 came John D. Blacks classic on production economics related to farming. Mathematics were intro- duced in the early 1930s and publications giving production function data began in the mid 1940s (Tintner and Brownlee, 1944; Heady, 1946).

    Returning to the UK, although Edgar Thomas (1954) recorded only eight papers (5 per cent of the total) given to the Agricultural Economics Society between 1928 and 1952 as being on farm management, most of the British work in the profession consisted of costings. During the 1930s and 1940s, the advocates of full cost accounting, such as James Wyllie, tended to pre- dominate. In his 1940 paper, Maxton repeatedly stressed that farm manage- ment was not to be equated with accounting, and that amassing facts did not constitute the subject of agricultural economics. Conacher began a review of the scope of the subject in 1948 with the words, Agricultural economics so far has been too much applied economics and that too often little more than accounting, and implied that he had had enough of reports describing . . . an analysis of costings over twenty farms somewhere near Mildenhall in Suffolk (Conacher, 1948).

    The contribution of the first Farm Management Liaison Officers (FMLOs), appointed in 1951 to act as links between NAAS (the National Agricultural Advisory Service) and the Universities and generally to develop farm manage- ment advisory work in England and Wales, cannot be overstated. With the help of some far-sighted NAAS personnel, and energetic support of Arthur Jones, the Chief Farm Management Adviser, they took the subject to the farm and made considerable progress during the 1950s. Two of the best-known of these pioneers, Wragg (1955) and Wallace (1957) gave papers to the Society on their work during that period. The particular contribution of Blagburn, the first FMLO to be appointed, must not be forgotten (e.g. 1951). Farmer- member Wilfred Cave, during the discussion on Murrays overview paper given to the Society in 1960, said, Ten years ago the agricultural community hardly knew what an agricultural economist was, but today there is a considerable demand for advice on farm management problems.

    In 1952 came the publication of Headys classic treatise, Economics of

  • FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE) 279

    Agricultural Production and Resource Use. He and his text have had their critics, but even now, twenty-five years later, I marvel at the achievement which that book represents, particularly coming at that time in the develop- ment of the subject, with its stress on theory so fully illustrated with practical examples. This book, surely, marked the coming of age of farm business management. I t was followed soon afterwards by a number of other useful textbooks from the United States, especially Bradford and Johnson (1953) and Heady and Jensen (1954). Meanwhile, postgraduate courses had begun in this country, for example at Leeds (Thomas, 1953). Nor should we forget the major contribution made by Sherman Johnsons survey in 1950 and by the visiting team of United States farm economists in the early 1950s (Wright, 1952; Napolitan, 1953), when the usefulness of budgeting was much emphasised.

    In my own undoubtedly blinkered early years in the profession, spent dur- ing the 1950s in the Farm Economics Branch at Cambridge, farm manage- ment still seemed absolutely paramount within the agricultural economics profession, and I entered it with an economics degree, almost totally ignorant of farming. The exceptions seemed to be some Ministry economists, a few people at Oxford, some at Wye who had an interest in land use/economics, and one or two at each of the other university agricultural departments who gave lecture-courses in policy, with a little marketing thrown in. The FEB during the 1950s, under the guidance of Sturrock as head after 1952, con- sisted entirely of staff working in various aspects of farm management: the Farm Management Survey, enterprise studies, the economic evaluation of new technology and work study. It represented a specialist, natural develop- ment from the type of costings work that had predominated in the ~OS, 30s and 40s. Compared with earlier decades there were fewer staff resources devoted to the positive aspect (fact-finding) and far more to the normative approach. Most other university agricultural economics departments had a similar emphasis at that time.

    The 1960s and 1970s Nationally, the 1960s witnessed a considerable change taking place. The farm management work broadened further, especially into the development and testing of programming techniques, especially linear programming. More important, an increasing number of agricultural economists, in all depart- ments, developed interests in other aspects of their discipline: marketing (culminating in specialist Chairs in that subject being created at Newcastle, Wye and, very recently, Aberystwyth); policy/farm structure/agricultural adjustment problems (especially, regarding the latter, at Newcastle, where an Agricultural Adjustment Unit was established in 1966); agrarian development overseas (particularly at Reading, Wye and Leeds - with several universities without agricultural departments entering the scene later); econometrics (predominantly at Manchester); and the work in land use was broadened (especially at Wye and Exeter) into recreational and environmental considera- tions (culminating, at Wye/University College, London, in a Chair of Countryside Planning (1969) and the introduction of a degree in Rural Environment Studies (1970)).

    Some of these developments simply represent a broadening of the scope of farm management work. Thus, agricultural adjustment studies largely consist of research into changes in farm size, enterprise choice and resource use in the face of the changing economic environment and national agricultural policies. Also, much of the work in agrarian development overseas is farm- management orientated, albeit that the size of units and political, social and

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    psychological circumstances in many parts of the Third World may be very different from those in developed countries.

    Certainly during the past twenty years the percentage of academic staff in the University departments of agricultural economics working in farm man- agement has fallen considerably. This can be attributed to three main factors. First, the broadening interests just referred to, caused partly by a higher proportion of staff with their first degree in economics entering the profession, and those who initially read agriculture receiving a much fuller grounding in agricultural economics in all its aspects and possibly having done postgraduate work in economics/agricultural economics.

    A second reason is that NAAS (later renamed ADAS - the Agricultural Development and Advisory Service) has appointed farm management specialists within the service, starting with the Regional Farm Management Advisers (RFMAs) in 1963 followed by Deputy RFMAs in 1965 and later further supplemented by specialist advisers in lower grades. This inevitably diminished the special significance of the work of the Farm (and Horti- cultural) Management Liaison Officers at the Universities, so that many even of the latter began to develop interests outside the field of farm management. (In Scotland, because the advisory service has been based on the three Colleges of Agriculture, this change has been nowhere near as noticeable.)

    Third, several semi-governmental and marketing board organisations (particularly the Milk Marketing Board and the Meat and Livestock Com- mission), together with a number of the larger commercial organisations (e.g. ICI and BOCM-Silcock) and some of the banks (especially the Midland) set up their own specialist farm management departments. The number of private consultants specialising in giving farm management advice has also increased enormously. Many of these organisations have established costing services - both for the whole farm and individual enterprises. Both these and ADAS specialists carry out research investigations (usually on a small scale) and produce reports on various aspects of farm management, including the economic and management aspects of new technology or alternative manage- ment strategies (e.g. different systems of feeding livestock), which previously had been almost entirely the province of the university agricultural economics departments.

    Farm management research at the universities has dropped even faster than the percentage of the academic staffs working in this area. This is partly because the Farm Management Survey and Enterprise Studies work for the Ministry of Agriculture, Fisheries and Food (now done under contract) has, i f anything, been increased (certainly in detail, especially since Britain joined the EEC) - although, on the other hand, more and more of this work has been taken over by non-lecturing staff (usually called Investigational Officers). More important, teaching commitments in the subject have risen con- siderably, as its importance has become universally recognised. Under- graduate courses have increased both in number and content and postgraduate mainly-taught courses have been developed, particularly (currently, in terms of numbers of students) at Aberdeen, Reading and Wye, as have post- experience courses.

    Rather as was the position with policy/marketing in the 1950s, a number of the university departments (excluding the Ministry contract work) now have only one or two farm management specialists, who spend most of their time teaching. The main exceptions to this are those departments which have retained farm management as one of their specialist areas, but even in these there may only be 20 to 25 per cent of the academic staff in agricultural economics working in this field.

  • FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE) 28 1

    University research in farm management has thus declined substantially, especially as UK research postgraduates are hard to find and finance. The better agricultural management students interested in this subject tend to wish to get out into the world and show how the job should be done, either as practitioners or advisers, possibly after a years postgraduate specialist course. Few grants are available and their level is low compared with the stipend in a job. Spending two or three years on a research degree, leading to an academic career, appeals to very few.

    AES papers and the FMA The changes outlined above may be illustrated by the way in which the contents of the Journal of Agricultural Economics have altered over the past thirty years. The relevant details are given in Table 1. I t should first be ex- plained that my definition of a farm management article must be much broader than that used by Thomas (1954) and Giles (1976) in similar surveys, which indicated a much lower percentage. I have included any article that relates to resource use at the individual farm level, whether in the UK or abroad. However, the borderline is by no means easy to draw.

    Table 1 1950-78

    Proportion of farm management articles in the Journnl of Agricultural Economics,

    FARM % FARM MANAGEMENT OTHER TOTAL MANAGEMENT

    ARTICLES ARTICLES ARTICLES ARTICLES

    1950-54 13 33 46 28 1955-59 34 36 70 49 1960-64 53 53 106 50 1964-69 27 52 79 34 1970-74 26 90 116 22 1975-78 12 81 93 13

    N.B. 1. Notes and Comments have been excluded. 2. 1975-78=four-year period only.

    Surprisingly (to me at least, initially), the proportion of papers in farm management increased during the 1950s and even, slightly, into the first half of the 1960s. On reflection, however, this should not be unexpected. The academic interest in the subject undoubtedly increased during the 1950s, and certainly the academic calibre of the work, a$ the subject broadened and developed, rose also. But this impetus had passed by the mid-1960s and thus we see the proportion declining from 50 per cent in 1960-64 to 34, 22 and 13 per cent in the following successive five-year periods. (Incidentally, during the 1970s, about 40 per cent of the farm management articles have had a substantial mathematical content.)

    This decrease might in part be associated with the formation, in 1965, of the Farm Management Association (FMA) in the UK (Farm Management Association, 1973), which has recently become affiliated with the British Institute of Management and been renamed (officially) as the Centre for Farm Management. This association currently has about 1,400 members (as compared with about 750 in the Agricultural Economics Society). Some two-thirds of the membership consists of farmers and farm managers (with the latter predominating) and one-third academics, advisers and others from related professions. From the start academics have been closely involved with the association and indeed two university lecturers have been chairmen.

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    It publishes a journal (Farm Management) three times a year. Although this is very much a professional journal, i.e. not a news-bulletin type of publica- tion, its articles are deliberately kept not too academic, in the sense that they must be capable of being read and understood by its farmer/farm manager members. The usual content is six articles averaging 3,000 words, together with a selection of abstracts. The articles would not be considered weighty enough to be included in the Journal of Agricultural Economics and thus Farm Management cannot be considered a competitor in this respect. How- ever, there is no doubt that the formation of the FMA has removed some of the pressure for more farm management papers to be given at AES Confer- ences, which will thus have indirectly meant fewer papers in this subject in the Journal of Agricultural Economics.

    Since it represents an important development in the general acceptance of farm management in this country amongst the farming community, a few more words about the work of the FMA are perhaps appropriate in this review. A vital aspect has been the organisation of county branches, most of which hold five or six meetings each winter. There is a two- or three-day National Annual Conference and periodic one-day Regional Conferences. The association organised the first International Farm Management Con- gress, held at Warwick in 1971, which was followed by two more, at Guelph in 1974 and Hamburg in 1977. The last was attended by 450 delegates. The venues of the next three are already planned! A Farm Managers Com- mittee has looked into the question of professional qualifications for farm managers and produced an Aids to Managers series of checklists. Surveys of the salary and conditions of work of farm managers have been sponsored (Giles and Mills, 1970 and 1971). Courses have been organised annually for members, in advanced farm management, man management and marketing, with outside sponsors, particularly Massey-Ferguson (UK) Ltd. The journal has already been referred to. I believe the greatest benefit for academic members, however, is the additional opportunity to mix with advisers and leading farmers and farm managers to discuss problems of mutual interest, to keep in touch with what is particularly concerning them and to develop further friendships with the farming community, at the national level.

    The subject-matter of farm management today This is no place to start reviewing the various definitions given of farm management over the years. I will thus simply give my personal choice, namely, that Farm/Horticultural Business Management is the science of organising and controlling the resources of a particular farm or holding so that they yield for the enterprise as a whole either the greatest continuous profit or that profit which the farmer desires. That seems to me to cover, quite succinctly, almost everything. I copied this from a students examina- tion answer ten years ago and have never yet found the original source. He couldnt remember.

    Trying to delineate the subject-area farm management today is almost impossible. I t could certainly be argued at one end of the spectrum that it is necessary to include a grounding in agricultural policy (especially price determination - international trade, EEC policy, etc.), and at the other to incorporate many aspects of rural sociology and social and individual psychology. Obviously, too, a knowledge of marketing is essential, since such subjects as the economics of crop storage, seasonal price variations, on-farm processing, producing for the market, and producers co-operative organisations are so much part of the farmers decision-making area.

    Listing the topics covered in the Farm Business Management options in

  • FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE) 283

    Wyes MSc degree in Agricultural Economics and its Diploma in Farm Business Administration gives a more precise idea:

    General Principles of Business Management Production Economics Farm Planning and Programming Techniques Decision Analysis Management Accounting Farm Finance Investment Appraisal Operations Analysis (other than Farm Planning Techniques) Personnel Management Industrial/Rural Sociology Legal Aspects of Business Organisations, Land Ownership and

    Taxation and Tax Planning Farming

    No doubt specialist courses at other universities have a similarly wide coverage. The all-important Farm Case Study work and, in more recent years, Management Games, help considerably in blending together all these various aspects of the subject.

    Recent and current research and developments in farm management A great deal of continuing work goes on at the universities and other organisations. This will be referred to only briefly, since it is so well known and well established, but it is certainly not intended to understate the im- portance of such work. For example, the Farm Management Survey may not be thought of as research in the true sense of the word, but its importance as an independent and objective source of data must never be underestimated and should not be taken too much for granted. Whether the benefits it bestows are commensurate with the considerable resources employed is another question. The use made of the data it provides for research purposes has always been disappointing, and still is, but there are several reasons for this.

    Then there are the individual enterprise studies. These may seem prosaic to some, but their standard and scope is now very much higher than twenty years ago and they are very valuable to those engaged in farm management work whether as practitioners or as advisers. The data produced by such bodies as the Milk Marketing Board, the Meat and Livestock Commission and some of the commercial firms are unfortunately often difficult to use as sources of planning data or as measures of level of performance because of their inevitable bias towards the better producer. This similarly applies to the whole-farm data supplied. by organisations such as ICI. Obviously this is no fault of those engaged in the work. Certainly the idea given of how the better producers perform is useful, but just how much better than average level they are or just how close they are to the, say, top 10 per cent is difficult to establish unless data are available also from fairly large-scale surveys with randomly selected participants. The university studies are far from perfect in this regard, owing to their dependence on farmers co- operation, but they do give a better picture of the average levels and the range of results actually being achieved nationally.

    There have been no significant changes in farm management accounting and analysis procedures for many years (for a British review prior to 1970, see Lloyd, 1970). The use of accounts analysis (the calculation of whole- farm efficiency factors for comparison with average and premium figures obtained from farm surveys) continues but is much less used today than

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    during its heyday twenty years ago (Blagburn, 1954). The same is true of the modified version (MAI-MA2) used by ADAS, developed in the early 1960s (Turner, Nix and Giles, 1963). Gross margins, first described by King in 1927, later used by Liversage (1956) in the Northern Ireland farm accounts scheme, and popularised especially through the efforts of Wallace towards the end of the 1950s, are in widespread (almost universal) use, despite some mainly ill-founded criticisms during the 1960s. Wallace and Burrs full description and illustration of farm planning using gross margins (Wallace and Burr, 1963) applies equally well today.

    Possible movements back nearer towards the full cost accounting pro- cedure, such as the allocation of fixed costs specific to a single enterprise (e.g. the cost of a full-time cowman, or the depreciation on a poteto harvester or milking parlour), or the allocation of all direct labour, machinery and building costs, have been accepted by very few, partly because of strong conceptual arguments against doing so and partly because of the extra recording required, at least by the second alternative. However, many farmers do now make use of costing schemes which give them greater detail of their livestock enterprises, especially dairy cows and pigs. Only the Meat and Livestock Commission offer sheep and beef recording services on a regular basis.

    The main change on the farm has been a much greater emphasis on the calculation of cash flow forecasts, particularly on the larger farms, especially those with well-educated farmers and managers where the financial position is not obviously totally secure. With regard to budgetary control, the content of Giless (1964) report on the subject has been more finely-tuned by later writers, but little of substance has been added. It seems to be little used in practice, in any formal sense at least, except for a fairly slow increase in the number of those carrying out checks on the cash flow and the more widespread monitoring of dairy and pig enterprises. Much more attention is now placed on analysing the balance sheet than was the case in the 1950s, when analysis was mainly confined to the trading account. Another aspect of accounting which has given rise to new work from farm management specialists, since about 1973, has been the problem of coping with the effects of inflation on the accounts (Hill, 1978a), particu- larly with regard to machinery replacement (Hill, 1978b).

    There has been a substantial amount of work during the past twenty years devoted to the electronic data processing (EDP) of farm accounts, particu- larly associated with mail-in computerised systems. These developments were fully reviewed by Rowe in 1971. The first attempts were made in the United States, notably at the Universities of Arizona and Virginia. Such services are now available in many other states, the TELFARM system at Michigan State University being particularly well known. Considerable progress was made after 1964 in Australia, namely at the Farm Manage- ment Service Laboratory, University of Western Australia, and the Farm Management Service Centre, University of New England. Particularly im- pressive has been the development in Canada of CANFARM, a highly ambitious national system (Britney, 1974), now under threat of closure. In the UK, several private firms have successfully developed mail-in farm recording services, despite its many difficulties.

    Another major development in relatively recent years has been the work on systems-simulation models (Dent and Anderson, 1971; Anderson, 1974; Dalton, 1975), or packages, for combined planning and control purposes - mainly relating to individual livestock enterprises (e.g. Charlton, 1972; Street, 1973; Blackie and Dent, 1974; Ryan, 1974). This particular seam has

  • FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE) 28 5

    been well worked and the main interest now lies in waiting to see whether, and to what extent, these models will be used in practice. Simula- tion has also been employed to investigate the optimum size of certain machines (mainly combine-harvesters) (e.g. Donaldson, 1970) but unfor- tunately this work has made little impact on practitioners.

    Mention must also certainly be made of the considerable interest and work in personnel management on farms, particularly by Lloyd at Reading (e.g. Armstrong and Lloyd, 1975), which was signified by the setting up of the British Society for Agricultural Labour Science in 1970.

    The on-farm use of programming techniques, especially linear program- ming, is really too large a subject to attempt to cover fully here. Headys epoch-making article, the first on LP in farming, appeared in 1954. The first published example in the UK was in 1959 (Barnard and Smith). Developments in the 1960s were fast and furious (Nix, 1969). Integer, dynamic linear, quadratic, game theoretic programming and, at the end of the 1960s, the Monte Carlo method all had their day, but, in terms of their practical use for farm advisory work, these days were short-if, indeed, they ever dawned at all for some. To some extent this was surprising, especially perhaps as regards the Monte Carlo Method. Attempts were made in the UK to enable many more farmers to use linear programming, through the development of an automatic matrix generator (ICIs MASCOT) and standardised matrices (ADAS, south-east region), but all to no great avail. By the early 1970s the programming movement had run out of steam; this subject is returned to later. At least five reviews of the literature on farm planning/programming technique-methodology were made between 1968 and 1973 (Weinschenk, 1968; Nix, 1969; Reisch, 1970; McInerney, 1973; Throsby, 1973); the last covered only the period 1970-73 and yet contained 219 references. Barnard comprehensively reviewed the data problem (and much else besides) in 1975.

    Currently, and in recent years, two particular research areas have been attracting much attention in the UK: decision analysis and the use of mini-, micro-, or desk-top computers. Decision analysis has been of particular interest following the large increase in price and cost uncertainty since about 1973. (This is as far as agricultural products are concerned; we tend to forget that horticultural produce has always had to endure high levels of product price uncertainty). The major impetus has come from the University of New England, Armidale (e.g. Officer and Anderson, 1968; Makeham, Halter and Dillon, 1968; Dillon, 1971), from which place come the authors of the possibly definitive book in the subject recently published (Anderson, Dillon and Hardaker, 1977). Many will consider this work to be too esoteric to be of any practical value, in the same way as game theoretic techniques, quadratic programming and so on have never found a place in the toolkit of the practical adviser. Certainly ADAS - which has not been slow to take on and test developments in techniques where there seemed a possibility of their having a practical potential-appear so far to have left this one alone. However, the problem of decision-making under uncertainty is so very important that the approach must be encouraged and attempts are now being made to develop its use to answer specific farming problems (Webster, 1977).

    Whether, at the other end of the spectrum, the work in this area is now in danger of getting out of hand we have yet to see. Thus, a much respected Australian farm economist has just written A note on Two-Point Risks, Certainty Equivalents and Quadratic Preference (Anderson, 1978). I t was. I feel, the increasing sense that the further development and refinement of

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    programming techniques was getting too far into the realms of obscurity, without even the remotest chance of practical usage, that has caused a reaction against such further work amongst farm management researchers. Of course there were other reasons, such as increasing doubts about the usefulness of any results obtained from such apparently complex and sophisticated techniques when future input and output prices were so uncertain, and the development and rapid fall in price of the micro- computers.

    Personally I am pleased that this reaction came about, fascinated as I am myself with programming techniques relating to the whole farm. It is surely a thoroughly healthy sign that much greater interest has been shown by younger researchers in recent years in developing far simpler models, for use on much cheaper computers, to help the individual farmer and manager with their everyday tasks, such as preparing gross margin budgets, cash flow statements and labour profiles, and answering questions relating, for example, to machinery and herd replacement (Pack and Dalton, 1976; Pugh, 1979). It has brought us back to earth and helped avoid the uneasy feeling that one was in the business of intellectual one-upmanship, preparing papers likely only to be read by a handful of fellow academics and research students particularly interested in a very narrow area.

    This is, of course, a perennial problem with university research: the allocation of limited staff resources between basic and applied work. The former is often narrow and esoteric, with little or no potential practical application as far as can be ascertained. On the other hand, an apparently humdrum-looking investigation, based on a survey of farmer-users, of the costs and returns of using a new technique, for example, complete diet feeding, or a new type of milking parlour, tends to be of far more value to practising farmers and their advisers. However, such work has a low value in terms of academic prowess, and does not impress nearly as much as a piece of complex methodology.

    Here lies a major dilemma, especially for young staff wishing to establish an academic reputation. A contribution to methodology, however insignifi- cant in practical terms, can enable an individual (and indeed a university department) to acquire an international reputation. A parochial study, however useful in practical terms, will not. Of course a department usually tries to compromise - to have some of each, the balance depending on the type and interests of the staff available and the views and main interests of the head of department. Incidentally, the above dilemma is even worse for the student from the Third World embarking on a PhD project in, say, Britain or the United States, who is intending to return to his own country afterwards to help develop and improve its usually very backward agricultural economy.

    Another recent development worthy, in my view, of special mention, is the outlook work at Aberdeen (Revell, 1975- ). Of course this is nothing new, particularly in the United States. In the UK various efforts have been made in the past, but they have usually covered only one or a few products, and have mainly been short-lived. The Aberdeen work is the first sustained and comprehensive achievement in the British Isles.

    Future research areas I personally never find it easy to forecast anything more than a year or two ahead (and even then I need some luck). This includes developments in research, particularly in a subject so volatile and close to the practical needs of a large and important industry as farm management. New problems or

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    potentially useful techniques arise, often without warning. However, some areas are clearly discernible.

    There can be no doubt, for example, that the question of farm planning to meet objectives other than profit maximisation will be further explored. This includes the practical application of ways of trying to meet uncertainty and different attitudes to it, which means more work in the area of decision theory. I find myself with an appropriately ambivalent state of mind with regard to this subject, rather like the don renowned for his power of indecision, who was heard to remark, I used to be uncertain, but now I am not so sure.

    Of course, any farm management adviser worth his salt has always recognised and attempted to meet the other objectives, such as a more secure level of income or an easier life. Hence the absolute necessity, when advising on a farm plan, to spend more time talking with the farmer (and his wife) than looking round the farm. Linear programming, for example, seeks only to find the constrained maximum. I personally believe that most farmers, given their various personal preferences and constraints, do try to achieve as high an income as possible. This applies especially to the millions of small, family farmers, wherever in the world they happen to exist. Obviously the larger farmer, if he is in an easy financial position and on goodish land, has the option either to take it easy or to satisfy any desire for technical excellence and prowess, with little regard for the cost. How- ever, we shall doubtless see more attempts to quantify these other objectives and to modify techniques to try to meet them by more formal procedures.

    Other work already referred to, namely, the development and testing of software for the newer, cheaper range of micro-computers now proliferating will absorb much research time in the coming years. These may be becoming very cheap indeed compared with a new combine-harvester, but most farmers will need convincing, and quite rightly, that they really will work and raise incomes and/or save time. It is up to the universities, together with ADAS, to develop, test and evaluate.

    The problems of inflation accounting will continue to absorb a lot of research time and also give the many staff engaged in farm costings work many headaches. With a reduction in the rate of inflation from over 25 to 8 per cent since 1975 the problem may appear to be disappearing, but the signs are that the rate will increase again before long. Even if, with luck, the rate should still seem laughably small compared with some of the South American countries, for example, it will still be a nasty problem for us.

    Changes in systems of land tenure, for example, different forms of landlord-tenant partnership, will also come under surveillance. The rapidly increasing rate of institutional ownership of land, and institutional farming too, has already aroused considerable interest, not to say suspicion and apprehension. The Northfield Report is awaited with very keen interest. The pros and cons of land nationalisation will once again be keenly,debated. The managerial problems, advantages and disadvantages of farmlng on a very large scale will demand more investigation. Growth theory applied to farming is also possibly due for a resurgence (Renborg, 1970). It is time, too, for another shot at measuring the attributes of the topleague farmer or farm manager compared with his less successful neighbours. The extension of farm management into other major areas can also be

    foreseen. One of these is an additional interest in studies in land and estate management in all its various aspects - including conservation and the rural environment in general. Greater links between the farm economist and the ecologist will be forged. The problems of multiple land use, including

  • 288 JOHN NIX

    recreation and forestry, have already been studied of course, but much more is 10 come. After years of propaganda and subtle persuasion, my ex-boss and now colleague, Gerald Wibberley, has at last worn me down and even I am now feeling an inclination to do some work in this area.

    I expect to see an increasing number of visits to the Third World by farm management specialists from the developed countries to test their wares and expertise in the often very different circumstances and conditions to be found there. These include, of course, the ideological, sociological and psychological differences, as well as the more obvious ones in farm size and tenure and lack of capital, confidence and know-how. The scope is vast. Our well-tried techniques will naturally be more readily usable in their present form in countries where much of the farming is on a larger commercial scale.

    Some hope should be recorded here for more work in horticultural man- agement. Of course most of what I have said about farm management could equally be interpreted as horticultural management. There is no doubt, however, that there are many special, different types of problems associated with, especially, top fruit and glasshouse production. Somehow the impetus has been missing, despite the efforts of a very few specialists. Perhaps this is because, comparatively speaking, highly skilled technology in itself is more of a sufficient road to economic success than is the case with agricultural production.

    A success story? Perhaps someone who has spent most of his working life in farm manage- ment is not the best person to evaluate objectively the achievements in this area. However, there can be little doubt that the development of farm business management both as an academic subject and as a practical con- tribution to improving farming efficiency has been highly successful. Nor is there any doubt in my mind that this began in earnest in this country with the appointment of the FMLOs in 1951 together with the publication of Headys book in 1952. I say this without wishing in any way to diminish the efforts of those who had worked in this area before that time-they had made the original breakthrough and established a firm bridgehead from which to take off,

    A large proportion of our farmers now are well aware of, and have made use of, the techniques developed and refined over the past thirty years, and this has played a large part in making our agriculture one of the most efficient in the world, taking this to refer to a combination of land, labour and capi,tal productivity. Quite a few countries can beat us in one of these, but perhaps not many have achieved quite as much in all three taken toget her.

    The appointment of NAAS/ADAS specialists in the subject, the estab- lishment of farm management departments in other organisations, including some commercial firms, the provision of many costing and monitoring schemes, all prove a wide acceptance of its usefulness. The amount of recording by farmers of data essential for management purposes has increased enormously.

    The development of university teaching at both the undergraduate and postgraduate level has already been referred to. The success of and very strong support for post-diploma courses at the colleges, such as the one at Seale-Hayne in particular, must also be mentioned. Reference has also been made to the post-experience courses held by the FMA. The three-week Worshipful Company of Farmers courses held at Wye for farmers and

  • FARM MANAGEMENT: THE STATE OF THE ART (OR SCIENCE) 289

    farm managers with at least five years practical experience have been operating since 1963 and have always been oversubscribed; for some time now there have been two a year, with two or three participants from the Continent on each course.

    Rather as the years 1952-54 saw a wave of textbooks from the USA, so in the early 1970s a number were produced within the space of two years in the UK (Norman and Coote, 1971; Barnard and Nix, 1973; OConnor, 1973; Upton, 1973), where teachers had previously relied mainly on the American texts and those of Sturrock (1947-71) and Blagburn (1961) from Britain.

    I have referred to the marked lessening of interest in methodology for its own sake and the stronger emphasis now on work aimed to be of direct benefit to farmers. Williams, in an important article written in 1969, pro- vided an obviously heartfelt critique, as an extension man, of Heady and the Iowaites for their inability to modify the principles of production economics and their research to be of more use to extension personnel, and he argued for a more humanist, behavioural approach. He implied strongly that they were more interested in the models they were using than in identifying properly the problems and trying to solve them in a practical way. He quoted Kaplan (1964): The drunkard searches under a street lamp for the house key which he had dropped some distance away. Asked why he doesnt look where he had dropped it, he explains, Its lighter here. Theres a moral there for all researchers. However, at the risk of seeming complacent, I do not think there has been the same degree of rift between farm management researchers and advisers in this country. I am as keen as most in stressing the importance of understanding the principles of pro- duction economics, but perhaps researchers, and academics in general, have kept closer to the advisers and leading farmers here than in the United States, and perhaps the type of training they each have had has been of a more similar type and level. However, that article was written ten years ago and the situation in the States may have improved since then.

    A number of colleagues in the agricultural economics profession have told me at various times that the farm management job has been done and sug- gested that it was therefore time for me to move on to fresh fields. However, as I have tried to suggest, there are still many worthwhile and indeed very important problems to be tackled; it is no time yet simply to leave farm management to advisers and teachers, without the support of research and development work.

    One final word. Hardly any mention has been made above of the work on the Continent and many other countries, apart from the United States and a few brief references to Australia. This has been due solely to lack of time and space. Of course, major advances in both the development and practice of the subject have been made elsewhere. For other omissions too -whether of topics, people or key references - I do most humbly apologise.

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  • 292 JOHN NIX

    RBsum6 LA GESTION DES EXPLOITATIONS AGRICOLES : LETAT ACTUEL DE CETTE DISCIPLINE

    Cette etude retrace rapidement lkvolution de cette discipline nu Royaume- Uni et aux Etats-Unis depuis Ikpogue OP elle prit vraiment son envol, cest ri dire aprEs 1950 en Grande-Bretagne.

    Les annkes 1960 furent tkmoins dun changement doptique dans lenseignement universitaire de Ikconomie agricole, la gestion des exploitations diminuant alors en importance, cependant que certains organismes crkaient des sections distinctes pour cette mCme discipline.

    Apris un examen de Iktendue actuelle du sujet, Iauteur passe en revue les travaux de recherche recents ou en ours et les faits nouveaux

    I1 constate que, dans la comptabilitt et lanalyse de la gestion agricole, la situation est restbe dpeupris la mCme depuis une vingtaine dannees, exceptk en cequi concernelinformatique. Le dkveloppement de la mkthodologie programmatrice des exploitations agricoles et IintkrCt considirable quelle avait suscitk dans les annkes 1960 dkclinent depuis quelques annees auprofit de la recherche qui renferme un potentiel pratique plus immkdiat. Ont provoqrrk un interZt parti- culier la mkthode de simulation des systemes, Ianalyse des dkcisions et les micro-ordinateurs.

    Finalement, Iauteur se penche sur les domaines de la recherche qui sont susceptibles de retenir particulierement IintkrZt dans les annPes futures et il terminepar une evaluation de la mesrrre du S U C C ~ S , sisuccis i ly a, de cettedisciplinejusquhprksent.

    enregistrks. 5

    Zusammenfassung

    FARMMANAGEMENT: DER STAND DER KUNST (ODER WISSENSCHAFT)

    Dieser Uberblick beginnt mit einer Zusammenfassung der Urspriinge des Themas im Vereinigten Konigreich und in der USA. Richtig angefangen hat es in Grossbritannien nach 1950. In den 60er Jahren war eine Verlagerung der Betonung durch Agrarokonomen an den Universitaten vom Farmmanagement weg zu beobachten; andere Organisationen richteten Farmmanagementabteilungen ein. Zm Anschluss an eine Diskussion des gegenwartigen Zustandes des Themas wird ein Uberblick iiber die neuere und laufende Forschung und Entwicklungen gegeben. In der landwirtschaftlichen Buchfihrung und Analyse hat es in den letzten zwanzig Jahren nur wenig Veran- derungen gegeben mit Ausnahme der elektronischen Datenverar- beitung. Das enorme Interesse an und die Entwicklung von landwirt- schaftlichen Programmierungsmethoden in den 60er Jahren hat in den vergangenen Jahren abgenommen, und die Forschung ist jetzt auf ein sofort praktisch anwendbares Potential gerichtet. Der Zugang durch Systemsimulationen, Entscheidungsanalysen und Mikrocomputer haben besonderes Interesse gefunden. Schliesslich werden Forschungsgebiete betrachtet, die wahrscheinlich in der Zukunft von besonderer Bedeutung sind, und der. vberblick schliesst mit einer Diskussion iiber den Egolg oder andere fur. das Thema relevante Leistungen bis zum heutigen Tag.