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Systems Thinking Part 4: Protect Your Farm's Assets and Skip the Heartache - Use Control Systems

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green tractor driving in a fieldYou wouldn’t leave your wallet, driver’s license and passport lying on the table in a restaurant and walk away. Instead, you keep those items carefully concealed in an inner pocket or RFID wallet and check often to be sure they are still safe. In the same way, you as manager are responsible for monitoring and protecting your farm’s key assets. These assets include your leases, equipment, inputs, finished products, financial resources, data and relationships. Let’s look at some ways you can and should be constantly on guard:

  • Farmland Leases

    • Use a tracking system to keep all information in one place and share easily among your team members as needed
    • Stagger timing of lease expirations and of payment
    • Choose carefully the type of lease that benefits and protects both the landowner and you
    • Ensure leases are written and are worded specifically to include all the details
    • Keep good lists of prospective landowners and follow up with them as appropriate
  • Farm Equipment

    • Plan carefully for your needs as part of your farm’s strategic plan
    • Investigate leasing vs. purchase
    • Protect your equipment when not in use (security lights, surveillance systems, etc.)
    • Ensure proper use and maintenance by your employees
  • Inputs

    • Plan carefully for your needs
    • Implement control systems for ensuring you receive all you have ordered and paid for
    • Implement security measures to prevent theft or tampering
    • Implement control systems to ensure you pay for only the inputs you received; it’s a good idea to make random checks on quality of seed, etc.
  • Finished Products

    • Monitor field activity
    • Have scales in place for verifying amounts leaving the field
    • Ensure you have sufficient storage on-farm with bin management system or weigh product at storage site; utilize bagging, if needed, with frequent monitoring
    • Compare tickets from elevator/purchaser against field tickets
    • Monitor and reduce shrinkage
  • Farm Financial Resources

    • Know your numbers throughout the business; ensure analysis of data you collect
    • Get help to understand your numbers and what they mean
    • Establish specific performance metrics for your resources
    • Monitor year to date actual vs year to date budget
  • Farm Data

    • Collect data regularly, store copies off-site/in the cloud and back up data regularly
    • Ensure security of your internet connections; limit use of internet by employees
  • Relationships

    • Foster and monitor relationships with lenders, vendors, landowners, and others in your community
    • Be aware of lending limits, changes in lending agency personnel or ownership, and other factors that can affect your standing

As you can see, there are many areas demanding your constant vigilance as manager. Any and all of these can cause grief if overlooked. I cannot over-emphasize the importance of implementing control systems in each one of these areas. Don’t leave your valuable assets unguarded.

Be sure to check out the next blog in this series - #5 Business Analysis

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