AGRICULTURAL PERSONNEL
MANAGEMENT PROGRAM
NEWSLETTER

Growers Rate Business Education Needs.... Sixty-two California farming business owner/operators completed August's "assessment of personnel and business management needs" survey -- over 4% of the total number of grower/packers on this newsletter list. Two-thirds of the respondents operate grape and/or tree crop establishments, two are farm labor contractors, and the balance manage strawberry, processing and fresh vegetable, row crop, dairy, nursery, greenhouse, mushroom, or beneficial insect operations.

The survey sought to measure operators' perceived production, financial, and personnel management education/services needs, ranking 34 selected business/production management topics in their importance to them. Although many of the topics constitute important business functions, respondents were asked to rank "the IMPORTANCE TO YOU of information and services in the subject areas listed."

The survey also attempted to determine respondents' sources of information, education, and assistance on these various subjects. I discovered that such sources as farm and commodity associations, cooperative extension advisors, accountants, and private consultants and vendors (in addition to "self study") were remarkably balanced in the frequency of mentions by respondents.

The area farmed by these operations ranged from 2 acres to 12,000 acres (median 343 acres); median years engaged in farming was 20, years farming ranged from 4 to 51. Two respondents, a winemaker and a fertilizer salesman, said farming wasn't their principal occupation (at least 50% of their worktime).

Fifty-one respondents (82%) were business owners; 31 (61%) of these were second or third (or more) generation owners. Three were fifth generation owners; one was seventh generation. Sixteen respondents (26%) estimated this year's business receipts would be below $250,000 (USDA's small farm definition). Fourteen of the "small" farmers (88%) owned some part of their business; median number of years farming was 24, and median farm size was 40 acres.

Fifteen (29%) of the business owners operated a corporation, 12 (24%) were partners in a partnership, 1 operated a trust, and 23 (45%) were sole proprietors. Of business owners, 43 said one goal was to maximize profit, 27 said goals included avoiding low returns or losses, 19 wanted to reduce debt, and 5 (with median acres farmed of 765) said a business goal was control of a larger business.

Some of the business owners and managers wrote in other goals. Two vegetable and row crop growers said (aside from avoiding low returns or losses) they wanted to provide good wages and working conditions for workers; one of them (farming 1,200 acres) wanted to provide employee health insurance, but couldn't afford to.

A 5,500 acre grape farm manager wanted to "foster a productive work environment;" a dairyman of 20 years with 11 full-time workers wanted to "create a better team approach to caring for cows." A 350-acre wine grape grower of 16 years wanted to reduce employee turnover; a 40-acre raisin grower, with 39 years of farming, said his goal was to "provide for my family and retirement." A small olive and walnut grower with 43 years of farming wanted to turn his business over to his son.

Eight managers mentioned "staying current on employment-related regulations" as a need, another said "simplify, cut back, distance us from government regulations." Three managers mentioned a need for Spanish supervisor leadership training. Another farm owner manager (with 38 years farming) said his greatest educational and information need involved financial management.

The largest employer of workers "expected to be hired 150 days or more this year" (a 350-acre central coast strawberry farm owner-manager) said his greatest educational and information need was "updated information on employer-related laws and regulations." Another grower (with 50 full-time employees) said his greatest need was to learn "how to get government out of our lives." A 300-acre grower, having produced raisins about 50 years, commented "I'm a farmer because I don't like paperwork. A rotten decision."

Twenty-three of the total respondents (37%), 4 female respondents (36%), and 7 small farm operators (44%), did not have Internet and/or e-mail access. Fifty-two businesses (85%) had computerized financial record-keeping systems; 5 reported their system was "designed by self" or customized.

All respondents reported some direct-hire and/or contract labor expenses for 1998. Forty-four (70%) estimated direct-hire and/or contract labor expenses this year would top $100,000; 36 (58%) estimated that direct-hire labor expenses alone would exceed $100,000. Twenty-six (42%) of the respondents reported at least 10 directly hired workers were expected to be employed 150 days or more this year, the median number of these workers for the total group was 15. The group reported a range of workers expected to be hired 149 days or less of none to 2,450; the median was 20.

Eighteen respondents (29%) reported their business had written job descriptions. The median number of employees (expected to be employed 150 days or more this year) employed by these businesses was 63, the range was 2 to 650. Thirty-nine (63%) of the businesses had written employment policies.

Nine (15%) of the businesses used an outside payroll service; one of these noted to "cut checks only." The median number of employees (expected to be employed 150 days or more this year) was 30; the range for these businesses was none (seasonal workers only) to 240.

For all 62 respondents, the rank, average score, and topic title are shown in the table, with comparison scores for the 11 female and 16 "small" farm respondents. The ranking scale used was:   5 - Extremely Important; 4 - Very Important; 3 - Somewhat Important; 2 - Not Too Important; and 1 - Not At All Important.

The topic "Production technology, cultural, and pest management practices scored very high (4.34), but was topped by "EPA pesticide use rules & safety training for workers" (4.35).

Female respondents rated most topics higher in score than the total (male-dominated) group - and ranked "Farm accounting principles & production records" first (tied with several other topics).

Female respondents scored "Managing credit, credit sources, and cost of debt" as very important (4.18); the small farm group, on average, scored the subject as somewhat important (2.87). (Fourteen respondents mentioned accountants as sources of information on credit management; 12 mentioned lenders).

Respondents with 20 or more years of farming ranked "personal insurance/social security, retirement & estate planning" as "Very Important;" those with less than 20 years ranked the topic as "Somewhat Important."

Relatively infrequent, but often consequential, decisions such as "Economics of land and equipment investment or lease" ranked low on the list (3.03). Information on "Business organization (sole proprietorship, partnership, corporation)" was also rated on average as "Somewhat Important" (3.00). Nineteen (31%) of the respondents were employed by a farm corporation; another 13 (21%) were employed by a partnership.

Although instruction needs in "computer information (Internet, e-mail)" ranked last on the list (2.67), 19 respondents indicated their source of information on the internet was "self-study" - or the Internet itself. One farm owner/operator with 30 years of farming said his source of Internet help was his children. Only one grower in the sample (2%), with 14 years of farming experience, mentioned the Internet as a source of information on "marketing and commodity-specific market news and outlook."

This survey shows a number of management subjects that California farm and commodity organizations, and UC Cooperative Extension, should consider building or supporting educational programs in. Some associations are already active in many of these areas. With one survey, I received a letter that said, in part:

September 10, 1998

Dear Steve,

In completing your survey, I found that my local wine-grape grower association provides much of the education you are inquiring about. I did not indicate this on the survey, but chose to tell you about it in greater detail.

The Paso Robles Vintners and Growers Association's Grower Education and Research committee has taken great effort over the past four years in developing education for growers and employees on many levels from first aid to tax laws. You have graced us with your presence a few times as well!

I am a member of the education committee as well as board member of the association and find that both groups are constantly striving to provide as much education to our membership as possible. We have found that because our industry is relatively new (as opposed to the Fresno area grape industry) there is little to no education available. We are also expanding our education to providing credits for pest control advisors and applicators.

I'm not writing to tout our association to you but rather to encourage other agricultural associations to consider education as a part of membership....

--- Average Score (Rank) ---           ---Topic Title ---

total group    female     small farm

4.35  (1)      4.64  (1)      4.53  (1)      EPA pesticide use rules & safety training for workers
4.34  (2)      4.55  (4)      4.44  (2)      Production technology, cultural & pest mgt. practices
4.31  (3)      4.64  (1)      4.25  (6)      General farm or workplace safety information
4.30  (4)      4.64  (1)      4.13  (8)      Farm accounting principles & production records
4.17  (5)      4.36  (9)      4.26  (5)      General OSHA safety & training requirements
4.15  (6)      4.36  (9)      4.33  (3)      Wage & hour rules, including child labor laws
4.09  (7)      4.55  (4)      4.33  (3)      Immigration regulations, employment eligibility
4.02  (8)      4.27  (11)    3.99  (9)      Employment posting & recordkeeping requirements
4.02  (8)      4.45  (8)      3.93  (11)    Managing workers' compensation/disability insurance
4.00  (10)    4.27  (11)    4.25  (6)      Business tax return preparation/depreciation schedule
3.98  (11)    4.18  (15)    3.99  (9)      Federal & State income tax planning & update
3.95  (12)    4.55  (4)      3.13  (25)    Computerized accounting/financial statements
3.93  (13)    4.27  (11)    3.79  (13)    Labor relations & antidiscrimination regulations
3.91  (14)    4.55  (4)      3.79  (13)    Managing the payroll system & payroll tax update
3.80  (15)    4.18  (14)    3.43  (19)    Preparing financial statements & total business analysis
3.80  (15)    4.09  (18)    3.81  (12)    Personal insurance/soc. security, retirement planning
3.74  (17)    3.91  (22)    3.13  (25)    Computerized payroll
3.72  (18)    4.09  (18)    3.32  (22)    Employee discipline/termination & employee relations
3.70  (19)    3.36  (30)    3.50  (16)    Marketing & commodity-specific market news/outlook
3.62  (20)    4.00  (20)    3.24  (23)    Contingency plan development, cash flow planning
3.61  (21)    4.18  (14)    3.50  (16)    Business insurance (crop, liability, equipment)
3.60  (22)    3.82  (25)    3.14  (24)    Employee compensation, incentives & benefit programs
3.57  (23)    3.91  (22)    3.40  (20)    Managing unemployment ins., including appeals
3.54  (24)    3.45  (28)    3.46  (18)    Recruitment, selection, training, appraisal & motivation
3.52  (25)    3.91  (22)    3.00  (28)    Enterprise cost/return analysis & budgeting
3.50  (26)    4.00  (20)    3.52  (15)    Preparing & maintaining employee handbooks
3.47  (27)    3.73  (27)    3.00  (28)    Management development and supervisor training
3.33  (28)    4.18  (14)    2.87  (30)    Managing credit, credit sources, & costs of debt
3.30  (29)    3.82  (25)    3.06  (27)    Preparing & maintaining job descriptions
3.13  (30)    3.18  (33)    2.81  (31)    Investment analysis (machinery & land)
3.09  (31)    3.27  (31)    3.36  (21)    Outsourcing employees, contract labor
3.03  (32)    3.45  (28)    2.53  (32)    Economics of land & equipment lease vs. buy
3.00  (33)    3.27  (31)    2.44  (33)    Business organization (proprietorship, part. & corp.)
2.67  (34)    3.09  (34)    2.40  (34)    Computer info. (internet, e-mail)