Transcript MachinerySharingStLouisEdwards.ppt

Machinery and Labor Sharing:
A Risk Management Tool for Small
and Medium-Sized Farmers
William Edwards and Georgeanne Artz
Sponsors
North Central Risk Management Agency
Leopold Center for Sustainable Agriculture
Iowa State University Extension
University of Missouri Extension
Project Overview
• Combined research and outreach program
– Research: 10 case studies
• Funded by Leopold Center for Sustainable
Agriculture and USDA Rural Cooperative Business
Development grants
– Outreach: Educational Materials and
Producer Workshops
• Funded by NCRME, Leopold Center and USDA
RCBD monies
Workshop Team
Georgeanne Artz
[email protected]
William Edwards
[email protected]
Roger Ginder
[email protected]
Frayne Olson
frayne.olson@ndsu
Kevin Hansen
[email protected]
Darren Jarboe
[email protected]
Jim Jensen
[email protected]
Kelvin Leibold
[email protected]
Ray Massey
[email protected]
Tom Olson
[email protected]
Wayne Prewitt
[email protected]
History of Equipment Sharing
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Corn husking bees
Threshing crews in the early 1900s
Hay crews
Joint harvesting
Hutterites and other
communal groups
Advantages of Sharing
• Greater annual use of large machines
• More efficient use of labor during peak
seasons
• More dependable than hired labor
• Fields more spread out—fewer
weather delays
• Opportunity to do custom work
Advantages of Sharing
• Specialization of labor
• Backup labor available
• More efficient use of repair tools and
facilities
• Volume discounts on input purchases
• Two (or more) heads are better than
one!
Delivery
• Workshops in Iowa and
Missouri
• Published manual through
Midwest Plan Service
• Ag Decision Maker
fact sheets and tools
• Article in JAAE (Nov. 2010)
• Popular press articles
Workshop Brochure
Workshop Format
• Five hours (10 am to 3 pm)
• Schedule
– Case study activity (small groups, interactive)
– Operational issues (presentation, short exercise)
– Lunch
– Choosing partners activity (small groups)
– Organizational issues (presentation)
Case Studies
Ten focus groups in Iowa, Illinois,
Nebraska, Saskatchewan
Typical scenarios:
•Combine sharing
•Machinery and labor sharing
•Total sharing (inputs to marketing)
Case Study Questions
1. How did the arrangement begin?
2. What were they sharing?
3. Was the arrangement successful?
4. What problems did they have to address?
Select a “Spokesperson” and “Recorder” to report back to the whole group.
Operational Issues
• Getting started
• Recordkeeping and cost accounting
– Equal ownership and use
– Unequal ownership and use
– Full machinery line and labor sharing
• Income tax considerations
• Work scheduling
Choosing Partners
Purpose: to get producers to think about the
importance of personal traits and skills needed to
make sharing work.
Activity: Break into groups and have them select
characteristics that they think would make a sharing
agreement successful.
Farm Characteristics
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Grain or livestock
Acres
Types of soils
Size of equipment
Shop facilities
Proximity of land base
Financial stability
Work Habits
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Early riser or night owl?
Steady pace
Sundays off?
Work alone or in a team?
Fix it quick or fix it right?
Punctual
Unique Skills
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Mechanical and repair, welding
Record keeping
Operating harvester, sprayer
Commercial driver’s license
Computer skills
Commercial pesticide applicator license
Personality Traits
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Planner
Flexibility
Problem solver
Creative
Independent
Diplomat
Organizational Issues
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Simple joint ownership
Informal operating agreement
Legal organizational choices
Written agreement and by-laws
Business plan
Entry and exit strategies
Program Evaluations
• Post workshop evaluations (76 completed)
• Six month follow-up (37 completed)
Workshop Evaluation
After participating in this workshop, how likely are you to
take the following actions:
Very
Likely
Moderately
Likely
Not
Likely
Seek more information about
machinery and labor sharing
arrangements
57%
35%
8%
Initiate discussion with potential
partners about sharing machinery
49%
44%
5%
Develop an operating plan to share
machinery and labor
47%
43%
6%
Make changes in your current sharing
arrangement (if applicable)
19%
32%
13%
Practice or Activity
Six Month Follow-up
Have
taken this
action
Plan to
do it in
the future
Have
considered
it
Have not
considered
it
Exchanged use of labor
76%
3%
19%
3%
Exchanged use of machinery
68%
8%
22%
3%
Purchased/leased machinery jointly
41%
19%
24%
16%
Developed written agreement
19%
22%
38%
16%
Entered formal partnership/LLC
3%
0%
30%
62%
Purchased crop inputs jointly
22%
8%
24%
43%
Sold crops/livestock jointly
5%
0%
11%
78%
Used Extension materials to
calculate payments
41%
11%
24%
19%
Planned for machinery transfer to
heir
14%
11%
14%
59%
Action related to sharing
Note: Columns don’t add to 100% - N/A column omitted
Six Month Follow-up
• How many $ have you saved in the past
year as a result of sharing machinery
and/or labor?
• Mean = $7,162
Note: Columns don’t add to 100% - N/A column omitted
Current & Future Directions
• Intergenerational transfer
• Fruit and vegetable,
specialty crop growers
• Dedicated energy crops
(establishment and
harvesting equipment)
Questions and Comments