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Will my operation survive another drought? Should I buy or lease that new piece of equipment? How long can I survive at today's price levels? The questions above represent just a few of the issues and concerns facing today's agricultural producers. In 1999, Texas legislature approved a program, entitled Texas Risk Management Education Program, which was designed to assist producers in answering these and other questions related to agricultural risk. One of the key components of this new, innovative program involves FARM Assistance, a computerized decision-making tool.
FARM Assistance (Financial and Risk Management Assistance) is a decision support system offered by Texas Cooperative Extension. Its purpose is to help agricultural producers evaluate the existing financial position and performance of their operations as well as alternatives for the future. Designed as a strategic planning tool to provide producers with a long-term assessment of specific alternatives under risk, FARM Assistance can help evaluate the potential impact of management decisions prior to their implementation.
FARM Assistance is a unique program because it projects the financial position and performance in a 10 year projection for an agricultural enterprise experiencing economic risk. The financial position and performance of the firm's status quo is then compared to the financial position and performance of the firm under an alternative management strategy. The advantage of FARM Assistance involves an ability to determine the effects of making different management decisions prior to a significant investment in capital. Harvey Buehring, County Extension Agent-Agriculture for Nueces County summed up the program by saying, "(FARM Assistance) gives good solid numbers instead of just going on a good feeling..." In other words, the goal of FARM Assistance involves evaluating the future impacts of management decisions before making a commitment.
One of the factors distinguishing FARM Assistance from other such programs is its ability to incorporate producer specific risk into a long-term plan. By identifying historical production and price levels experienced by the producer, each analysis is tailored to project the potential variability in financial performance for that particular business. This is particularly important when you consider that certain technological advancements which are feasible in a research setting may not be financially feasible for a producer given his financial position and performance.
As of July 1, 2001, approximately 280 producers have completed the FARM Assistance program across the state of Texas. As a result of participation in FARM Assistance, South Texas producers have projected the effects of reduced government payments, irrigation installation, enterprise downsizing or expansion, equipment acquisition, and enterprise diversification on South Texas farms and ranches.
View Powerpoint slideshow for additional information about FARM Assistance.
FAQ
Q. What alternatives
in farming operations have been investigated by South Texas producers
who have participated in FARM Assistance?
A. South Texas farmers have investigated the impact of installing irrigation systems, aquiring additional equipment, expanding or downsizing enterprises, and changing lease arrangements. (additional alternatives)
Q. What do South Texas producers have to say about FARM Assistance?
A. "The FARM Assistance program provided me with an insight on what the upcoming years held and reassurance I was looking for that I would be able to continue farming at a profitable level." (Source: Keith Bednorz, Victoria County Producer) (additional comments)
Q. In order to participate in FARM Assistance, what information do I need to provide?
A. Several items of financial data, such as financial statements, production history records, and land/equipment resources, must be provided by the producer in order to complete a FARM Assistance analysis. (additional information requirements)
The FARM Assistance program has been featured in several magazine and newspaper articles including the Corpus Christi Caller Times, Southwest Farm Press, and Texas A&M Agriculture Program's Quest Annual Report.
Texas Risk Management Education Program sponsored by Texas A&M Extension Economists
For additional information on FARM Assistance and Risk Management Education in South Texas, contact John Parker, Extension Program Specialist-Risk Management.