The peculiar pressure on farmers

I'm on my way back to London after ten days in Australia, most of which was spent on the farm where I grew up in central NSW.  The focus of the business is mostly cattle and I spent the week lending a hand as it's weaning season.  I'd like to think that I haven't forgotten everything I knew about working in cattle yards and I don't think I totally embarrassed myself.

Farming, or more specifically what is called 'grazing' in Australia (ie producing food from livestock not crops) is a strange business because the only thing that you can definitely count on is that something will go wrong.  The scale of the setback can range from minor inconvenience of, say, a cow barrelling through a fence and away from the herd, to existential crises such as bushfire or an outbreak of foot and mouth.  Last week it was the cumulative effect of the minor things that struck me most.

You make your livelihood working with massive animals which, if they could be said to have any sort of agenda, have no earthly reason to make life easy for you.  Why should they?  At some stage they or their offspring will be sold as meat.  Of course whatever sentience a cow has stops along way short of this but they instinct tells them that humans are to be feared.  Luckily this means that mostly they run away from you.  Mostly but not always.

On a good day the things that go wrong are minor irritants.  Locating the newborn calf that was separated from its mother during the move is a annoying but rewarding part of the job.  It's sort of the rural parallel of the document that didn't get backed up.  Time and energy will be needed to rectify the situation.  The difference is in the timeliness.  The longer the document us left the more times and energy will be required to rectify the problem.  Still, not much truly suffers if it isn't until Monday that the document is rewritten and resent.  If the newborn calf is left that long it will die cruelly.

On a good day the entire herd runs through the gates and into yards in a smooth and orderly way.  Nothing jumps a fence or barrels past you as you're drafting.  The drenching or marking or whatever you're doing goes well and you get home yourself at a reasonable time.  There aren't that many good days.  Something always cocks up and yet again you're finishing work in the dark.  This is why no one working with livestock is ever consistently on time.  It isn't because they haven't organised their worklives as well as office workers but rather because the environment is that much more haphazard.

The management consultant who declares that human beings to be 'the most unpredictable of all animals' has never had to anticipate exactly how a distraught cow will act when she hears her calf bellowing from two paddocks over.

Waiting for a life-changing event

"A lot of farmers," said my brother-in-law, "won't move from their unsustainable farming practices until they have some sort of 'life-changing' event."

We were on a tour of the farm where I grew up in the 70's and 80's that he now runs with my sister and he was lamenting the unenlightened habits of many Australian farmers.  As I've mentioned before, he's an enthusiastic (evangelical) proponent of holistic farming.

I suppose the 'life-changing event' he imagines is some not-quite-fatal event like a heart attack or having the bank seriously question whether the farm's debt should be allowed to roll over.   But as any doctor will tell you non-fatal heart attacks are rarely life-changing.  We're humans and we hold our habits, good and bad, far closer than we'd like to admit.

It is useless to try and reason a man out of something he wasn't reasoned into.

Jonathan Swift

My brother-in-law has it wrong.  The 'life-changing event' he's seeking isn't for the farmer but the farm.  The best hope for changing practices on a given bit of dirt comes with change of ownership through inheritance or sale; and new ideas are far more likely to be trialled under totally new ownership of the asset.

The land we drove over was first used for grazing cattle in 1819 by a man named William Lee who helped build the very earliest road over the Blue Mountains to the west of Sydney.  Lee was granted title to something like 60,000 acres in 1832.  Over the years that holding was broken up into smaller properties although the Lee family are still prominent in the district.  My father bought our farm (4300 acres) from the Lees in the early 1960's.  The land has been owned by only two families in the almost 200 years since white settlement reached that part of Australia. Not a lot of scope for 'life-changing events' in that timeline.

It's a great modern example of the most persistent economic unit in history: the family owned and operated farm, reports of whose demise have been greatly exaggerated.  That persistence is borne of an old fashioned mindset; farmers who create a life that serves an asset that will outlive them.  This is at odds with the way that almost everyone in the rich world lives; we build a life that serves the personal needs of our families and ourselves.  We build unremarkable bourgeois lives instead of creating then stewarding some good thing that will outlive us.

As much as we freelancers believe that we're different from the wage slaves we used to be, in this respect we're exactly the same.  Seriously expecting your son to one day take over your web design business is as weird as assuming that he'll ascend to your regional sales manager role.

We have to admit that we're not building assets, just lives, and the best we can hope for is that most bourgeois of aspirations: leaving enough cash in the kitty for our kids to have their choice of futures.

Something bigger than a career

A few years ago in the context of showbiz careers I mused as follows: -

Isn't a successful career just one where you do what you love until you don't have to do it any more?

As I get ready to leave the farm I how this thought might apply to owner-operator agriculture.  Farmers' bodies wear out quicker than most and yet as in Australia 50% will die within five years of retirement, quitting doesn't seem to be much of an option.  If you stay you wear out.  If you leave you die anyway.

'Secession planning' is a growing industry in the bush as smart farmers look to 'step back' and hand the business over to the next generation whilst still retaining some small role for themselves instead of selling the business outright before heading to the coast to die.  Done properly this is a way to extend the enterprise past 40-50 years but done badly it turns into a defensive exercise in personal survival that mortgages the prospects of the next generation.

The critical issue is in the word 'career'.  Your career terminates when you do.  Whereas a successful business is a bigger thing that can (should) outlast you.  Headcount: 1 enterprises are careers that die with us; they can no more be handed on to the next generation than an actor can bequeath her role in a sitcom to her daughter.

The difference is in the asset mix.  Farms must be 'asset-heavy' to flourish whereas any career based on personal talent can function 'asset-light'.  Successful consultants, actors, writers and the like take the fruits of their labours and buy real estate whereas ambitious farmers buy more land, stock and equipment.

This is probably obvious to anyone except a farmer's son who chose to use his brains to make his way in the world rather than stay at home and build a life based on his brains, physical effort and the farm where he grew up.

The wages of frustration

I am still in rural NSW at the farm where I grew up.  The weekend was a reunion of sorts for my three sisters, their manifold children and me.  It's taken me a while to adjust to sleeping in the deafening silence of the Australian bush after inner London but that absence of noise is one of the things that I am here to rediscover.

On Saturday my brother-in-law gave me the tour of his cattle-raising business.  He's made a number of quite radical changes to the farm since my father has stepped back.  He and my sister are enthusiastic adherents to a more holistic approach to agriculture that is quite close to hard-core environmentalism in terms of protecting  pastures and (especially) soil quality*.  To this layman's eyes it seems as if they're on the right track but they'll only know for sure after a few hard years of poor rainfall and depressed cattle prices.

It's easy to look good in the good times.

And this is something that I'm not sure that my brother-in-law, a smart, hard-working man, quite gets yet.  An understanding of the meaning of prosperity is hard to come by.  If you take the long view of a business in any established industry (and none are more established than food production) then a trendline will emerge; a sense of what a good operator can reasonably achieve with his particular assets can be established.  I say 'established' because it takes time for these trendlines to solidify; no one knows what the DNA sequencing industry will look like yet.

Many companies and most Headcount: 1 / freelancer types misinterpret prosperity.  If you treat the good things (it rained, my client got a big promotion, I got the part in the hot new movie) as luck or even as 'just rewards for all my hard work' then that prosperity is mispriced: -

The good years must compensate you for the emotional damage wrought by the bad ones

None of us gets to relive those bad years but with more money in our pockets.  We don't get that time back.  Our health and the wellbeing of our relationships with family will inevitably have been damaged by both the frustration of not having succeeded yet and the quiet terror of not knowing if you're actually going to succeed at all.  When you hear that someone's eventual success 'feels hollow' it means that the bad years were 'not worth it' (or mispriced).

Hopefully my brother-in-law has it right.  Like many smart farmers of his generation he is adamant about carving out time for his other passions: his family and campdrafting, a very difficult, peculiarly Australian rodeo event.  But the proof will be in whether or not he manages to keep up these other aspects of his life when beef prices tank and the rain refuses to fall.

The current good season will have to pay for some future time of heartbreak and frustration whether he knows it or not.

* This is not to say that my father didn't have a keen appreciation of the relationship between his agricultural practices and his land.  He did.  However, to an outsider it does seem that the thinking has moved even in the last ten years.  Even though he doesn't use that language, my father was a custodian of his land, which is more than you can say for most farmers in most parts of the world.

Craving certainty

When visiting the family farm I spent a few hours driving around the place with my brother-in-law. He's a thirtysomething guy who spent his twenties on the other side of the farm gate working as a grain trader. He is a smart, hardworking and independently-minded guy who is always open to new ideas but one who also craves certainty in an uncertain world.

He has access to experienced counsel from my father and his own parents but the combination of relative inexperience, an impulse for independence and a conflicting need for greater certainty is still a potentially deadly one.

Farming* is infamously fickle. My brother-in-law has to deal with a raft of totally uncontrollable variables: the weather, bushfires and other environmental factors; as well as stock, fuel and fertiliser prices, which are in turn influenced by macroeconomic factors such as interest and exchange rates. Conversely, he has a high degree of long-term control over capital investment in water supply, fencing and herd genetics and total short-term control over what cattle he buys and sells and where on the farm they'll graze.

From time to time he makes bad calls but always admits as much. Still, owning up to your mistakes is necessary for small business success but it isn't sufficient.

Recently he's happened on a system called Holistic Farm Management and he spent most of our farm tour expounding its virtues as a way of reducing the manifold uncertainty he's facing. With his permission I put on my 'consultants' hat' and quizzed him about the system.

As I understand it Holistic Farm Management is the idea that protecting the long-term health of your pasture is a higher priority than maximising the short-term value of your herd. The implication is that a farmer takes a whole-of-farm approach to pasture management and regulates stock numbers accordingly. The corollary being that the day-to-day market price for beef is mostly ignored.

The system is espoused by a local guru who alternates between saying that Holistic Farm Management is simply long-standing common sense (my father's position) and that it's an agricultural revolution waiting to happen (what my brother-in-law wants to hear). The spiel also includes a pitch for grasslands to be recognised (and rewarded) as carbon sinks in the global warming debate and a quasi-historical analysis of the carrying capacity of the Serengeti.

My layman's assessment of Holistic Farm Management is that it is a worthwhile philosophy overlaid with a dangerously rigid system based on arbitrary inputs (ie self-rating your paddocks to decide on carrying capacity) and insisting on either slavish adherence to a potentially misbegotten annual workplan or an unwieldy global reassessment that renders learnings from past experience elusive at best and at worst totally invalid.

As a guru in a vastly different field I won't comment on the rhetoric but I am critical of the choice of target market: younger farmers like my brother-in-law who just want to drink the Kool-Aid. Any Kool-Aid.

* Or perhaps I should refer to it 'ranching' as these days the business is almost 100% beef cattle

I am businessman

As I mentioned, Katy and I spent last week with my parents in Provence. We spent six days on a barge eating and drinking our way down the Rhone from Provence to Aigues-Mortes, an experience that was as good as it sounds.

Le Phonecien had eight other guests; a Frenchwoman, two American couples and three Ukrainian men (I know this sounds like a bizarre retake on the Gilligans Island premise). Our three Ukrainian shipmates were friendly, interested and interesting but they had almost no English between them. Not to be bowed by this they were quick to point out that no one else spoke any Ukrainian or Russian whatsoever.

Roman and Andrei declared that they businessmen, meaning that they were self-employed. Naturally I braved the exhausting labyrinth of half-grasped meaning to see what sort of connection could be established between my world and theirs.

I learned that there is still plenty money to be made in post-Soviet Ukraine if you're smart enough (read: brutal enough) to win the battle for ex-government assets like hotels, factories, farms and mines.

Conversely, the idea that I made my living helping companies solve problems was so incomprehensible to them that I came across as basically effeminate. Far more interesting was my father, a farmer in Australia who also had a resort property in Far North Queensland. Here were proper assets. Tangible things. Things worthy of the conversations of men.

I'm just glad I didn't lead with 'theatre producer'.

A bad day

As someone who grew up in country Australia, today it's hard to think of anything at all except this.

Farming v. Other forms of self-employment

In my last post I alluded to the fact that I am a farmer's son.  I grew up on a farm near the town of Cumnock in the Central-West of New South Wales.  As the eldest child and only son it was actually an active choice for me not to become a farmer (see last post).

My father was a very good farmer and I long before I could articulate the reason why I knew that I didn't want to follow in his wake.  When asked about it now I explain that my definition of a good farmer is as follows: -

Someone who gets up at dawn on a rainy morning in the middle of winter to go and fix a fence that isn't broken yet.

As far as farming goes that was never going to be me.  I've never regretted the decision to do other things with my life but I do like to think that I carry that attitude with me nonetheless: -

Get up every morning and solve a problem before it even arises.

Talking to farmers

My wife and I spent a lovely August Bank Holiday Weekend in Norfolk as guests of friends who are farmers growing wheat, canola (rapeseed) and beans.  On Sunday afternoon we went to the local pub and met up with their friends, most of whom are farmers also.

As we stood around in the soft evening light chatting, much of the conversation revolved around work; in particular comparisons between the working life of a farmer and a self-employed consultant.  The similarities were all pretty obvious: self-employment, working alone and making every decision for (and by) yourself.

The differences were far more revealing.  There are the obvious things like the physical nature of farming work, the dangers of producing a commodity when selling to an aggressive buyer like Tesco and the near-total reliance on weather.

Harder to spot but far more interesting was the idea of 'cost of entry'.  With the exception of one man who was the farm manager of a large estate, everyone at the pub had inherited the land they worked.  The best way to become a farmer is to be a farmer's son.  In fact given that you can no longer go west and simply stake a claim, the only other ways to get into the business are to either sink a lot of cash (yours and the bank's) into buying land or to manage a large holding owned by someone else.  The barriers to entering the farming profession are thus remarkably high.

By contrast becoming a consultant requires nothing more than an email address and a business card.  Consultancy like stand-up comedy, motivational speaking and any kind of freelance writing has very low barriers to entry.  There is no blanket expectation that we be accredited like accountants or even be educated to a given level.

You are a consultant the moment you say you are.

This means that there will always be someone coming after you.  Some 'lean and hungry' type who will argue that your 'years of experience' equates to 'complacency' and that she can do a better job cheaper.

In no way am I saying that a farmer's lot is an easier one; I know that as a farmer's son.  But farmers should at least be able to see where the next big threat to their livelihood is coming from.  For all I know someone was made redundant last Friday who spent the long weekend deciding to go out on her own as pharma marketing consultant rather than applying for another job.  Today we don't even know that the other exists but my business depends on me behaving as if she does.

When businesses in high cost-of-entry markets fail its like the Titanic hitting the iceberg, in low cost-of-entry markets like mine its usually the death of a thousand invisible cuts.