Setting Priorities

 

We recognize that FNA cannot do everything all at once. Which means it needs to have a practical system to set priorities. Unsurprisingly, since the mission of the farm business alliance is to maximize our farm profitability, our priorities match the mission.

There are specific mission-critical areas that we have grouped into five categories:

1. Crop inputs

  • Crop Protection Products
  • Fertilizer
  • Seed

2. Other Operating Expenses

  • Insurance
  • Finance/Credit
  • Grain Handling & Transportation

3. Revenue

  • Product Marketing

4. Farm Information Services

  • Cost of Production Analysis
  • Marketing
  • Agronomy
  • Farm Business Management
  • Benchmarking

5. Capital Assets

  • Equipment & Buildings

As Members, we make our needs known to FNA both directly in communication with the management, and indirectly through the decisions we make in how we use the Member Value made available to us. For example, by using the businesses that the management team has negotiated to be suppliers to FNA Members, we are voting with our wallets that the inputs provided by that supplier are priorities for us. They will stay on the priority list. If on the other hand, we don’t make use of programs or suppliers in one of the categories, we may be sending the message that those things should not be on the priority list.

Formally, priorities are determined through strategic planning sessions that are backed up with data from member surveys, farm cost data, research on excess margins in different sectors and so on. As those things change, priorities may change with them.  Management listens closely to Members and the FNA Advisory Board at every opportunity for ideas that also may lead to changes in priority, tactics or strategies.

Having the five priorities categories does not directly translate into devoting resources to all of them all at the same time. FNA management must make decisions, informed by all of the consultation and research tools, but also according to a “best-bang-for-the-buck analysis.”

Since the resources FNA has consists entirely of our Membership fees, it needs to be careful, efficient and effective in using those resources.

So, for example, even though fertilizer was a much larger cost input than any other single product, the resources required to do something about it were vastly beyond what could be sensibly achieved at the start. The available resources first only allowed negotiating Preferred Supplier arrangements. As the membership grew FNA acquired the resources necessary to pursue solutions in crop protection, negotiating, taking on the political challenges, and ultimately finding suppliers who would offer Members competitively priced products. Doing something about crop protection was not cheap, but it was the best cost-benefit effort given the available resources.

Of course in the first decade of the 21st century there were enough of us that our Membership fees did allow FNA to start the process of addressing the excess margins in fertilizer, an effort that continued to the point of seeing ProjectN launched and many of us becoming actual partners in the FNA Fertilizer Limited Partnership. When that project is complete it will mark an historic turning point for farmers, and a proud confirmation of the priority-setting process.
Of the the specific items in the five categories, FNA’s current priorities look like this, and its resources are spent accordingly:

1. Crop Protection
2. Fertilizer
3. Grain Handling & Transportation
4. Farm Information Services
5. Farm Product Marketing
6. Seed
7. Equipment and Buildings
8. Insurance & Risk Management
9. Finance

But it is important to recognize that our management team is highly entrepreneurial such that when an opportunity to build value for our farms is seen, it is acted on regardless where on the current priority list it may sit. So, for example, when the opportunity was spotted to build a serious direct farm sales insurance program, FNA employed the resources immediately to working with the world’s largest trade insurance company, Atradius, which resulted in the creation of MarketPower Assurance. Insurance is number eight on the list, but because FNA was able to act quickly we have a unique-in-the-world insurance tool that allows to hand pick risk management for sale direct from our farm.