NPR - Farm Management Plans

Farmers have been encouraged, for many years, to apply a more formal and rigorous planning approach to their business management functions. The preferred documents accompanying the planning are strategic plans or business plans. Setting a strategy refers to developing a plan that documents where a farmer sees his or her business in the future and what management and investment decisions have to be made to attain the vision. Business plans are more focused on a specific concept or project, usually within a defined timeline. The two planning functions can exist on a standalone basis but more typically, one would expect a business plan to harmoniously be working toward achieving the longer term strategy. Strategic plans will generally have a five year horizon with a three to five year focus for business plans. Plans that have a one year timeline are usually more operational in nature. Having an operational plan would be a minimum expectation. But the reality is that the majority of farms have no formal plans at all. Farmers will have operational plans but they reside in their heads. The absence of any formal planning hierarchy does not, in itself, result in failure. In fact, many farms have been very successful with no written plans at all. This paper will not argue the relative merits of strategic, business or operational plans. It will present an alternate approach to planning.