Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork.
“Everyone has a plan, until they get punched in the mouth” is a famous quote from the heavyweight boxer Mike Tyson.
Farming feels somewhat like this at the moment, the Russian invasion of Ukraine is the punch in the mouth which is upsetting the best made plans in all farm enterprises.
Crisis management on-farm is defined as follows;
‘the process by which a farmer/farm business deals with a disruptive and unexpected event that threatens to harm the business, its stakeholders, or the general public’.
In the corporate world the study of crisis management originated with the large-scale industrial and environmental disasters in the 1980s. Crisis Management Plans were put in place to better manage such events.
However, the nature of crises are that they are unexpected. So, when a crisis strikes, what should a farmer do?
There are 4 steps in a crisis management plan:
Step 1: Don’t Panic
The first advice is not to panic; Rudyard Kipling’s famous poem If, says; ‘if you can keep your head about you, when all about you are losing theirs’ is a good point from where to start. Running around like a headless chicken certainly does not help matters in times of crisis, it is vitally important to take a breath and not panic.
Step 2: Assess the situation
The second step is to assess the gravity of situation; This is where friends, family and trusted professionals come into play. The hardest part for many farmers is to pick up the phone and ask for help. Friends, family and in particular trusted professionals have experience of dealing with such situations which can be invaluable in getting an early grip on a crisis and avoid some unnecessary worry and anxiety. There is comfort in the fact that you are not the only person in the world who is encountering this particular challenge and more importantly what lessons can be learned to best cope.
Step 3: Make a plan
The third step is, to make a plan to deal with and resolve the crisis and commence the resolution process. Again, this will involve friends, family and trusted professionals. More importantly, it will involve delegation of tasks and decision making which considerably lightens the burden on the farmer managing the crisis. Regular contact with those who helped create the plan reassures the farmer and keep the resolution of the crisis on track. Eventually, everything returns to normal and the crisis passes.
Step 4: Don’t make strategic decisions at this time
The last step in the process is perhaps the most import stage of a crisis management plan. Often, in times of crisis there is a tendency to discuss and often rush into making big strategic decisions in respect of the farm business. This is not the time to make big decisions about the business. The adrenaline and emotion surrounding the process of dealing with a major or mini crisis can blinker the thought process and result in bad decisions being made.
The war in Ukraine is precausing the cost of fertiliser, feed and fuel to skyrocket, this of course will have implications for the rates charged by all other service providers too, such as agricultural contractors, vets etc. The input cost increases are having varying effects on the different farming enterprises.
Pig producers and certain poultry producers are in dire straights as the cost of feed alone is exceeding the income from produce sold. Dairying ,beef and sheep are being hit by the fertiliser crisis at present but at least product prices are increasing to help protect net profit margins. However, as all other input prices increase as the year goes on, profit margins will tighten depending on how input prices react.
Farmers should revisit their business plans to predict how their cashflow position will be affected for the remainder of the year. If cash is going to be tight contact your bank early. The main Irish banks are well experienced at dealing with agricultural crises and have the tools to take some of the worry away for individual farm businesses.
In conclusion, the message for farmers in times of crisis is not to panic, pick up the phone, ask from help from friends, family and trusted professionals, and do not make hasty big strategic decisions in respect of farm business at this time. This war like other crises will come and go, in the bigger scheme of things it is just another hurdle to jump in the management of a farm business but remember, the crisis will pass and life will go on.