Developing Proxy Indicators for Farm Profitability in Irish Agriculture
This study by Ciara O'Donovan focuses on developing and testing proxy indicators of farm profitability and efficiency measurements for knowledge transfer use on Irish farms. The research aims to identify indicators of farm performance, tailor them based on enterprise, scale, and seasonality, and test them for knowledge transfer use on farms. Semi-structured interviews and pilot testing of indicators with advisors and farmers are key components of the methodology.
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MAgrSc Innovation Support Programme 2016-2018 Study Title: Developing and testing proxy indicators of farm profitability and efficiency measurements for knowledge transfer use on Irish farms Student: Ciara O Donovan Supervisors: Dr Kevin Heanue, Teagasc and Dr James Breen, UCD Location: Clonakilty Teagasc Advisory Office
Research Objectives To identify indicators of farm performance advisors and farmers use, what they indicate, how they are used and why they are used. To find out if the indicators need to be tailored by enterprise, scale, seasonality and individual capacity. To use a co-creation approach for choosing suitable indicators of farm performance and quality of life. To test the indicators and rules of thumb of farm profitability, efficiency and quality of life for KT use on farms.
Methodology Menu of indicators Pilot with discussion groups Semi- structured interviews Literature review
Semi-structured Interviews 2 dry stock advisors 2 dairy advisors 1 agri-banking worker 9 dairy farmers 9-10 beef farmers Test/Pilot the proxy indicators with a farmer discussion group
Thesis Structure/Chapters Chapter 1 Introduction Chapter 2 Background Chapter 3 Literature Review Chapter 4 Data and Methods Chapter 5 Results Chapter 6 Conclusions
Profitability indicators Efficiency indicators Quality of life indicators Basic payment retained Profit & loss accounts Profit monitor Fixed costs ICBF breeding report ICBF co-op performance report Grass in front of stock Whole farm stocking rate Start time & finish time Hours worked per week Farm infrastructure Holidays
Key Findings Efficiency & Profitability Advisor perspectives vs. Farmer perspectives
Indicators of Farm Efficiency & Profitability some guys haven t got a clue what their profit is, haven t a notion a lot has to be done for tax purposes DA1 ...guys who technically mightn t be the strongest fellas there actually don t know how much money they re making DA1
Indicators of Farm Efficiency & Profitability a lot of fellas are just happy that they cover all their costs and their single farm payment will be their profit. BA1 While [they] might get a very good price for the calf what did it cost to produce that calf? They mightn t be too aware of it like. BA1
Indicators of Farm Efficiency & Profitability if it s untidy around the yard, you can be damn full sure that the paperwork is going to be untidy and finances are going to be untidy as well BA1 we do profit monitors with them, but they know they re in trouble before we ever do it. BA2 some farmers won t understand 1,500 kilos of dry matter inside in that field but they might understand the heights of grass BA2
Indicators of Farm Efficiency & Profitability part-time farmers tend to be better organised...to be able to do the jobs quick they re financially in a better position to [invest] so they can be more efficient BA1 part-time farmers age disability young family BA2
Indicators of Farm Efficiency & Profitability What we ve left at the end of the year in our bank whether we have cash left or not or paying tax quality of life DF1 the accountant told me that our profits were up. [ ] what s my tax bill going to be like in 2017? DF2 I d be watching there to see if we can keep our figures above the general average slightly. DF2
Indicators of Farm Efficiency & Profitability a couple of things that would jump out at you straight away kilograms of milk solids produced per cow, tonnes of feed fed. DF3 The co-op performance report is really good because you can see year on year whether he s static whether he s moving forward DF3 There are a lot of inefficiencies farmers going out renting more land and they don t actually need it DF4
Key Findings Quality of Life Advisor perspectives vs. Farmer perspectives
Perceived Quality of Life it s a complete mind-set they re across all groups I m finishing [at] this time, I have family afterwards. DA1 that lifestyle thing isn t related to how good they are technically DA1 that would be the biggest influence on quality of life, the financial. BA1
Perceived Quality of Life if you re happy enough in yourself that s good enough, that s an indicator DF2 That s a big thing if you can finish on time DF2 the only hobby I have really is ploughing matches in the springtime. DF2
Perceived Quality of Life On inspections, You d nearly lose a night s sleep over it. DF1 When asked about their work-life balance No it s shocking, it s dreadful DF3 The pressure was on that year alright, we felt it because we had [one] in college [ ] the other three were in secondary school and there was fair expenses in them [and] there was nothing coming in. DF2
Perceived Quality of Life you do work 14, 16 hour days, you re trying to get ahead make money [and] develop your business DF3 if you mentioned work life balance you d just get a blank expression, they wouldn t have a clue what you re talking about, sure farming that s our life [it] does not exist DF3
Conclusions to date Lots of indicators identified Questions should be tailored Utility of this study for knowledge transfer: The importance of knowing your audience Asking the right questions Active listening Being aware of the factors that affect decision making on the farm e.g. family, financial pressure, succession plan etc.
Steps to Completion 1. Dec-Jan: Finish data collection and start analysis 2. Feb-March: Finish analysis and write results chapter 3. April-May: Write up thesis
