An Ounce of Prevention…
Holistic Financial Management Planning
by Mark Eclov
A large number of hog and grain farmers in the Midwest found themselves in serious financial stress this past year. Although the situation wasn't as apparent in Kentucky , the state's Cooperative Extension Service has decided not to wait until it has to apply “emergency CPR” to dying farm operations.
Instead, the Extension subject matter specialists and county agents are gearing up to practice “preventive medicine.” They are teaching the Commonwealth's farmers how to weather the bad times and also how to prosper in the good times with a broad-based financial management plan that goes well beyond knowing how to keep a farm ledger.
In early June 1999, 80 county Extension agents representing all primary areas of Extension activities met for a four-day workshop.
The training sessions were conducted by a multi-disciplinary team of state Extension subject matter specialists from the University of Kentucky College of Agriculture.
“I have been training agents for over seven years and this was the most integrated group of agents I have dealt with,” noted Steve Isaacs, Extension farm management specialist in the UK College of Agriculture. “We had a good split between agriculture, family and consumer sciences, and 4-H agents.”
The information was geared toward addressing the needs of the entire farm family and included a broad range of interrelated topics such as risk management, establishing a vision and financial plan for the family farm, stress control, farm record keeping, and personal finance planning.
Financial planning is not a new concept. Much of the information has been around for years, but had never been condensed into a well-rounded training package.
“We wanted to give the agents a more holistic package of training materials and ideas and begin to approach this type of training from a team approach,” said Suzanne Badenhop, workshop trainer and UK Extension specialist in family resource management.
“For instance, we went beyond keeping records and analyzing cash flows and reviewed exercises that get people to talk within their family about what is going on financially, where they may be headed, and what may be the right decisions for their particular situation,” added Badenhop.
Rod Grusy, Extension agriculture agent from Hardin County , saw the workshop as another example of how the Extension service is evolving to meet the needs of the changing farm scene.
“As agricultural agents, we are evolving from an era when we taught primarily production information to a point where we are now expected to deliver more information on decision making and farm management techniques,” said Grusy. “It will make a really big difference in the future livelihood of many farm families.”
The county agent training session was the first step in the educational process. An Extension task force is now making plans for the next phase. The team will also design a system for reaching farm families who need immediate help and for helping other farm families who could improve their situation with this crucial financial information.