Taking Research Methods to the Farm: Discussion
Smith, Nathan B., Journal of Agricultural and Applied Economics
The theme of this paper session is Taking Research Methods to the Farm. The three papers presented today highlight successful programming efforts that have focused on providing agricultural producers with a technical tool to analyze their unique situations and decisions. An underlying theme of the session is collaboration between research and extension. The session organizers mentioned in their proposal that the common model of extension programs is to disseminate relevant information learned from research methods without access to the actual research methods or analytical tools. This is largely true when it comes to statistical analysis, econometrics, and mathematical programming. However, the development of personal computers and software programs does provide extension educators with a valuable analytical tool that allows producers to access the tool and analysis. Spreadsheet decision aids can be found on several university websites. Their applications, however, are typically limited to more straightforward, basic farmmanagement decisions. Extension specialists have learned over time to simplify results and decision tools whenever possible. Producers are mainly interested in the answer, and they want it now.
The session organizers mentioned in their proposal that producers are becoming more technologically advanced. I agree with the statement in large part. I see the needs of producers becoming more specific and complex. The answers and solutions producers are seeking to problems they face require more technical expertise. Today's producers are more educated and technically proficient, especially in regard to production technology. By my observations, farming has become more of a systems approach in which blanket recommendations no longer solve the problem for everyone. Leading agricultural economists forecast that agriculture is moving to a bimodal system of production. The implication of this trend in extension will be working with two basic groups of producers. One group makes up the majority of farm numbers, known as hobby farms. These farms are owned and managed by small, part-time producers that have a need for basic information and expertise. The second group makes up the majority of agricultural production, known as commercial farms. These farms are larger in scale and run by family members or managers with a higher level of education and a high degree of technical proficiency. Their problems are more specific and complex, requiring an understanding of risk concepts. Commercial farms need more assistance in strategic planning, developing business plans, and analyzing risk. This second group, in my opinion, presents an opportunity for incorporation of research methods in extension programming and developing risk education programs. The three articles presented in this session are examples of major efforts in providing a single tool that addresses strategic planning decisions and farm business plans. Each effort is unique in design for reaching a large number of producers.
The Klose et al. paper describes a decisionsupport system called the Financial and Risk Management (FARM) Assistance program. The authors describe the program's uniqueness as the incorporation of risk analysis through stochastic simulation to generate a 10-year pro forma financial analysis. They state that the analysis is most comparable with capital budgeting or investment analysis. The article focuses on the research method and development of the program. Model results are given to producers, mainly with a few simple bottom-line variables, but risk of financial projections are included as well as averages. Klose et al. state that the producers learn from the method as well as the results. Model complexity and flexibility to handle all sorts of situations were mentioned as major hurdles. The research challenge was to develop a model that handled real-world situations and risk. Some important points were brought out besides the research challenges of developing the model. …