Schoepp: More farms need to sow the seeds of financial literacy

British Columbia is a unique place in the world.

The variety of foods grown is astounding, as is the diversity of its processed products. The landscape is home to small farms and large ranches, local processors and those who export around the world. It is a province of mountains, islands, rivers, oceans, lakes, ports and flyways, valleys and plains.

Agriculture’s romantic attraction to British Columbia’s lifestyle and beauty appeals to young people, just as they are captivated by the lifestyle of hiking Alberta’s mountain ranges or working in the vast plains of Saskatchewan, exploring Manitoba’s diversity, milking cows in the East. or harvesting the vegetable garden in the Atlantic. However, looking at food production through the prism of lifestyle does not guarantee success.

Rural life is no fairy tale. Everywhere, agriculture has its difficulties. Weather events, price and market disruptions, labor shortages, changing regulations, infrastructure bottlenecks and burnout are part of the reality, no matter the landscape.

It’s hard work, farming.

You have to like it – but you’ll like it a lot more if it provides a living wage for owners and employees. You’ll like it a lot more if it gives you the headspace, often taken up with worry, to create and innovate in your own business. You’ll appreciate it a lot more if your farm helps build a resilient community.

As we seek out solid business opportunities that will be critical to the long-term prosperity of the farm and ranch, regardless of location, size or scope, it is important to understand the finances of this business. Lack of financial literacy is crippling for startups and ensures a slow hemorrhage on established businesses.

When the young couple bought the farm, they had stars in their eyes and big plans to feed the community. There would be a variety of animals and regular traffic to the farm stand. They were new to farming but were willing to learn how to run a small farm and readily accepted advice and acted on it quickly. However, regarding the business plan, they declined to discuss it, saying “everything would be fine”.

What was discovered during ongoing conversation with these new farmers was this simple fact: they were unfamiliar with common business terms.

It wasn’t that they didn’t want a financial plan or were against a business plan – they just didn’t want to expose the fact that they didn’t understand the language in it.

This conversation brought to light one of the biggest challenges in farming today, and that is the lack of financial literacy within the farming and food production demographics. Regardless of the size of the industry – regardless of the diversification and the opportunity – the success of the farmer or rancher depends heavily (if not entirely) on financial acumen. Financial literacy is to businesses what data is to research.

The children who were in primary school received a loan, with interest, to buy laying hens, food and wood to build the chicken coop. In the first year, they repaid the loan and the interest, and in the second year, they were able to collect all operational expenses. Fast forward five years, these children now own and sell a variety of poultry and poultry products and have established a small herd of cows with their earnings. These young entrepreneurs run the business based on finances. The resilience they build in their business will help them weather future production or financial storms.

Watching equity erode or come to the point of insolvency is stressful and life changing. Many farmers who have faced this admit they did not understand the financial terms or covenants and were too embarrassed to ask.

Rather, they hoped, rather than planned, for a better year. Often a farm in difficulty today is a farm that was in difficulty yesterday. The owner simply did not have a full appreciation of the seriousness of the aggravating issues and did not expect such an end result.

It’s never too late to learn.

Children, youth, young adults and mature farmers are welcome. There are experts and resources in every region of Canada hosting the conversation.

We do not wish to see our children, our parents or our neighbor fail. The sooner we seek clarification, the sooner we can get back on track. The sooner we advocate for financial literacy as part of the curriculum starting in kindergarten, the greater the chance for resilient businesses in our communities.

We need financial literacy in schools, clubs, communities and homes for the next generation of farmers to succeed to the point where they are secure enough in business to afford and enjoy the desired lifestyle of the farm.

The farm is not an inheritance. These are the people who are there. These are the people who are building the future by building business acumen in our youth and new entrants – and igniting all that is possible in the diverse and exciting profession of agriculture.