SD Agricultural Education and FFA History

Adult Farm Business Management Education Program

by Clark W. Hanson, Professor Emeritus, Agricultural Education, SDSU

The Smith Hughes Act of 1917, which created Vocational Education, provided for the instruction of agricultural producers. The program could enroll adults and school dropouts in regular high school classes or separate classes. As time passed, vocational agriculture instructors would often offer a series of evening meetings. The content of such offerings were generally based on current topics and issues related to production agriculture.

Over the years, Agricultural Economics Departments at Land Grant Colleges developed systems assisting farmers for keeping farm financial records. The primary purpose was to provide a basis for income tax reporting and preparing loan applications for purchasing land, equipment, livestock and supplies. What the system produced might differ from state to state; but the purpose would generally be the same.
 
The Agricultural Economics staff at the University of Minnesota developed a farm record keeping system which eventually included record analysis for the entire farming operation and individual enterprises.

In 1952, the Agricultural Education Department, University of Minnesota, proposed such a system of delivering the adult portion of the 1917 Smith-Hughes Act. What would start as a few local farmers enrolling in such a program taught by the local agriculture instructor expanded to the point that prompted local school boards to hire a second part – time or full time instructor. The program continued to evolve with detailed information on financial reporting for the total farm and enterprise analysis.

In the mid 1970’s the Agricultural Education staff at South Dakota State University secured a $60,000 grant from the South Dakota Office of Vocational Education to conduct such a pilot project for a cooperative effort among the Tulare, Red Field and Doland school districts. Jim Ludens, Tulare High School agriculture instructor was employed to develop and deliver a program patterned after the Minnesota concept. Mr. Ludens’ admits enrolling producers with some degree of apprehension but willing to commit to such a program.

Over the years various programs were initiated at various locations in South Dakota. The program offered by Mitchell Technical Institute eventually evolved into the South Dakota Center of Farm/Ranch Business Management.

Today, the SD Center for Farm Ranch Management offers two basic programs;  (1) Financial Foundations designed for Beginning Farm Ranch Farm Service Agency Borrower Training and the Farmer/Rancher (with fewer than 10 years experience) and (2) Farm/Ranch Business Management. 

A description of the Farm/Ranch Management program is best stated by the following contained in the Mitchell Technical College 2018-2020 Catalog and Student Handbook:

"Benefits to the participant of the program include: complete records of past years to review when making management decisions; records needed for filing yearly tax reports; development of a record management system for use with lenders; an increased knowledge of the strengths and weaknesses of their operation; the ability to determine the business’s exact financial progress in any one year; an ability to project profitability of individual enterprises; and development of a working understanding of cash flow, net worth and profit & loss statements. Each semester, students will enroll in a four-credit course, which covers the recordkeeping component as well as relevant current industry topics. This program consists of six semesters of instruction. "

Following completion of the three-year program, enrollees are encouraged to continue participating in the program with reduced instructor supervision and opportunities for consultations to consider alternatives to their operation. Again from the Mitchell Technical College 2018-2020 Catalog and Student Handbook:

"Students who successfully complete a certificate in the Basic Program are eligible to enroll in FBM 211 Special Topics, an individualized course designed to assist the client in developing and evaluating a strategic plan for their farm or ranch business. This program is offered through the Advanced Technical Education division. Instructor approval required."

The author interviewed five individuals with teaching experience associated with the Mitchell Technical Institute program. Jim Ludens, original project instructor, currently farms in the Geddes area, retired instructors Roger DeRouchey and Calvin Pietz along with current instructors Carey Blaine and Lori Tonak. It was interesting to hear the common experiences and yet unique individual experiences each have had with the program enrollees. The instructors agreed that their teaching experience was unique and operates in an unusual environment. It is often said that the classroom for this program is the kitchen table. Mr. Pietz commented on one scheduled visit he found a note on the kitchen table stating that all involved with the program were busy but the records were there for his review. The record keeper had a special request, “Please leave a note.”

The instructors interviewed commented that the success of the instruction is based on the extent enrollees are willing to put forth the time and effort “to keep the books.” Each operation is different and yet common elements are observed. The operation’s success depends on the one individual who steps forward and “keeps the books.” Revelations occurred as individuals within the operation would make the comment, “ I didn’t know we were spending that much on..….”

Enrollees had various goals for the program. The young operators were concerned with developing record keeping skills, which meet the requirements of the farm loan officers and tax preparation. Balance sheets and cash flow were paramount while the operator with years of farming experience tends to focus on keeping accurate records leading to accurate operation analysis. 

The instructors have had similar experiences with program enrollees. One commonality was that it takes a while for the operators to “buy” into the purpose of such detailed record keeping. At any point in time, suddenly something made sense. Once something clicked, the multiple purposes of the program made sense.

Most of the enrollees represented a family with interest in the operation; partnerships are common with a few corporations. Often times, one family member would emerge as the “record book” keeper.

The one key element that was essential to the teacher-student relationship was one of trust and confidentiality. Such was fundamental in establishment of an effective working relationship for this particular approach to education.

Most enrollees will admit that they realized the necessity of all the detailed requirements of the record keeping as portrayed in the first year’s analysis.

Another commonality consisted of the computer skills possessed by the enrollee(s), which at the start ranged from A-Z.

The following description makes sense; at first the process of record keeping can be viewed as a series of snapshots of the operation. Some “pictures” the operator may not even be aware of. As producers progressed through the program and continue enrolling in the next phase the record analysis becomes more like an action filled farming adventure video.

The annual record analysis reports all sixteen Farm Financial Performance Measures (Sweet Sixteen). Following the agricultural farm financial crisis of the 1980’s, farm loan officials organized and developed a unified system of analyzing farm financial criteria. The broad categories include; Liquidity, Solvency, Profitability, Repayment Capacity and Financial Efficiency.

The South Dakota program owes two Minnesota instructors a huge debt of gratitude for their willingness to assist in the establishment of the South Dakota program. Mr. Dary Tally, Adult Farm Business Management instructor, Winthrop, Minnesota and Mr. Don Shippy, Farm Business Management instructor, Canby Area Technical Institute, Canby, Minnesota were speakers at class sessions, teacher workshops, and consulted South Dakota instructors.

Former instructors reflected on the sound factors for program success including the funding sources necessary include but not limited to tuition, income from other offerings, industry support and Mitchell Technical Institute administration.

Complex curriculums, such as F/RM, require specific instructor training. With the low number of instructors regular pre-service and in-service training is not practical. The instructors rely on each other and the professional consulting provided for by their own professional organization, the National Farm & Ranch Business Management Education Association. NFRBMEA is a member of the umbrella group of professional agricultural teachers known as the Agricultural Education Council. Lori Tonak, Mitchell staff member, is currently serving a two-year term as the NFRBMEA representative on the national Council

On a side note, in the early 1070’s the National FFA Farm Business Management Contest was developed based on the Minnesota FBM model. This continues to this day. Dr. Lon Moeller, retired Agricultural Education staff member, serves as the national
Chairperson of the National Agricultural Business Management CDE.

This article ends with an invitation. If you or some one you know would find this educational program of value, please contact
Lori Tonak: 605-350-4132 e-mail: lori.tonak@mitchelltech.edu
Blain Carey: 605-350-4132   e-mail: blaine.carey@mitchelltech.edu
Web site for South Dakota Center for Farm Management: sdcfrm.com