Thinking Differently: The Real Power Behind Earning More
If you’re in the traditional farming game you will understand what being held hostage to commodity cycles is all about. Living life as a price taker isn’t much fun. It can be stressful at times too, particularly when you’re having a tough year and it’s time to catch up with your accountant and report in to your banker. After gearing up to pay for large-scale conversions or other initiatives to increase production, there isn’t always much left in the kitty after making the interest payments. Once a farm business is locked into this cycle it is much harder to free up resources to invest in innovation. This makes many farmers more reliant on the status quo being successful and it contributes to industry inertia.
It is a strategy which chooses to put all the eggs in one basket, which isn’t considered by many (accountants and bankers included) to be the optimal approach for positioning a business for a more secure, more sustainable future. Diversity is considered by many to be directly related to resilience. Dr Alison Dewes recently suggested,
“Economic models have driven farmers more to growth (output) but the think big and more hasn’t delivered the well-being that it purported too.”
In context, Dr Dewes was discussing safeguards to people, animals and ecosystems, but you need all three to be healthy if you want to have a successful farming business. Big in many cases, is not best.
The problem of course, is well understood by nearly everyone in the industry…or is it? I’m sorry, but I have to ask, why do farmers have to be price takers? In undertaking research into premiumization at the University of Otago I have been pushing myself and everyone around me to get as far out of their comfort zones as possible. My colleagues and I have been challenging everything at every level. Everything is on the table. Every reason for why it can’t be done, every reason for why it’s too hard to change, and every reason that says it has to be the way it is. Frankly, disruption rules and from small beginnings, big ideas can grow. Jeffrey P. Bezos started Amazon in his garage 30 years ago. His start-up capital came from his parents. Apple started in Steve Job’s parents garage. Thinking differently and trying new things can and does work. I’m certainly looking hard at my garage!
And how is it that two of the greatest primary producing nations in the world have so many struggling farmers? Forming the backbone of both countries, the men and women working on the land should be earning much more. Surely, the best produce in the world should attract the best prices. This point was driven home in a conversation I had with a beef farmer’s sister the other day. She is a young, independent, new generation farmer in the process of completing her Master’s degree in finance. Her excellent question to me was politely blunt. She asked,
“Why are we selling our lovingly reared, grass fed, beautiful animals for such ridiculous prices? We need to stop doing it…now.”
It’s hard to disagree from where I stand. What can I say…it’s a great question and it’s the right question to be asking. Why are producers selling themselves short? The quick answer might be that everyone needs to put food on the table, send their kids to school and pay the bills. Totally get that. The longer answer looks a lot more interesting and potentially way more rewarding. The why question I like. I like it a lot. Why is always a really good place to start innovating from and in this case, the core problem is pretty well understood. We know where the starting point is. In the spirit of trying to come up with a solution I’ve chosen to undertake a disruptive research project centred on looking at the opportunities and obstacles to earning more. I will be laser focused on tipping existing thinking upside down. I can see what’s there now, but what’s possible? That’s what excites me. And I think the answer is…the sky’s the limit. How big is our imagination, how brave can we be, how far can we go? We don’t know yet, but both countries have stellar reputations for achieving the impossible. The history books of both nations are littered with the evidence. We need to channel some of that obstinate, independent, irreverent, ‘can-do’ attitude into changing what’s not working into something that does.
Already there are some key themes emerging from my investigation, some of them have surprised me and some have simply confirmed my assumptions. The obstacles are not just commodified markets, they also include incredibly resistant mind sets and industrialized factory farming mentality. The bent always seems to be towards production, rather than quality. More fertilizer, more grass, more milk, heavier cattle, tweaked sheep. That’s great, but what about the steak lover and the milk connoisseur. What about the customer? What happened to artisanal produce? Think Italy, France or Ireland? William Lesser, the American author of Marketing Livestock and Meat suggested,
“Livestock producers share their myopic world view with other mass production industries. Where technological change and lower unit costs for larger operations are prevalent, the urge to produce, produce, produce becomes irresistible. Firms become product, rather than consumer-orientated.”
Ingrained corporate style thinking just keeps being belted into people, especially the ones who are trying to change things. The associated political and organisational drag that is endemic to corporatised environments doesn’t help either. There are better options available and there are more valuable pathways waiting. Group think and lawnmower mentality is preventing willing primary industry entrepreneurs from reaching these new opportunities. The Harvard driven Bord Bia initiative in Ireland initially struggled with the loss of confidence in Irish farmers, but they got through it and now look at them.
If enough people say something can’t be done, sometimes people won’t even try. There are many, many examples of companies and industries that failed because they couldn’t think differently or couldn’t change when they needed too. Most commentators didn’t see their demise coming until it was too late. GFC anyone? Perhaps for a change, invite some different people into the conversation and see what they come up with. Rarely is a problem solved by those who created it. What would happen if we teamed up some radical thinkers with some professional marketers and super creative types? I’m pretty sure they would come up with some different options for those who want to earn more, and I’m pretty sure they wouldn’t end up supporting the case for more of the same.
By Jim Wilkes