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OCR for page 245
CHALKIER
28
The Economic Context
of Agriculture
James L. Rainey
Lairs J. Connor, Rapportew
Agriculture is often praised as a special way of life by farmers,
some farm organizations, and others who take comfort in the tradi-
tion of American agricultures homogeneous past.
Undeniably, there is much that is appealing about the freedom
and rugged individualism that are at the center of agricultures soci-
etal appeal. But the fact is that agriculture is also a way of making
a living, and the imperatives of economics are a powerful force
behind agricultures rapidly changing competitive environment. Change
is never easy, nor is it popular. There is resistance to change,
even when economic forces would seem to dictate its inevitability.
Agriculture's leaders-producers, business managers, and cer-
tainly educators-must therefore accept their role and responsibility
to be in the forefront of efforts to build understanding and accep-
tance of a rapid agricultural evolution. An evolution thatis fueled
by economies of scale and global competition. Consider what is
happening to U.S. agriculture:
· The trend in consolidation continues, with fewer but larger
farms and fewer but larger suppliers. It is estimated that by the
end of this century, the United States will be provided with 60 to 70
percent of its agricultural products by less than loo,ooo producers.
At the same time, there will be more hobby farms. The traditional,
diversified midsize farm unit is disappearing.
· Rural transition continues to occur as small communities shrink
and regional market centers grow.
· Agricultural policies are shifting to a greater emphasis on mar-
ket orientation and lower subsidiaries, with greater regulations be-
cause of environmental and food safety concerns.
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AGRICULTURE AND THE UNDERGRADUATE
· Technology shifts are occurring in the forms of computer and
electronic transfer capabilities and larger, more efficient production
and processing equipment.
· Biotechnology is changing what farmers grow, how they feed
and protect what they grow, for whom they grow, and the ultimate
end uses of their products.
· Agribusiness consolidation will continue, with a dominance of
a limited number of large food system companies. if present trends
continue, the top 50 firms will own No percent or more of food
industry assets by the end of this decade.
· Coordinated supply and marketing will continue to expand. With
decreasing supply and marketing options, production contracts and
food system integration will increase.
· Revenues will be concentrated in the "farm gate-to-consumer
sector. While the consumer's total market basket cost increased 65
percent from 1972 to 1988 (in 1972 constant dollars) and while the
cost of food as a percentage of disposable income has continued
to go down, farmers are receiving 4 percent less in total market
basket revenues.
With this kind of evolutionary, almost revolutionary, change tak-
ing place, it is easy to understand how important our task is to
find and empower through education the kind of people who can
make the difference in the demanding agricultural arena.
The sad fact is that business is finding it tougher and tougher to
identify, retain, and reward people who are equipped to compete in
a technology-driven world economy. The agribusiness industry
can be hit especially hard. The U.S. Department of Agriculture
projects an annual shortage of 4,000 college graduates for some
48,000 agriculture-related jobs into the lgoos. Many companies
that have cut back over the last decade are starting to hire again.
The problem is that they are simply not finding enough people. We
need to get serious on why this is so and what we should do about
it. we must persuade more young people, from the elementary
level through college, to catch the vision and understand that we
need their brainpower to manage change, solve problems, make
decisions, analyze data, and create new products.
Statistics indicate that, in the main, schools are coming up short.
The reason may come easy for some of us, perhaps too easy. we
can attribute it to the conditions in inner cities that put many minor-
ity children at a disadvantage, poorly funded schools, and under-
paid and, in some cases, underqualified teachers. whatever the
reason, the fact remains that 1 million students quit school each
year, and of the 2.5 million students who get through, one-fourth
cannot read beyond the eighth-grade level.
industry does have a role and an obligation to participate in the
business of education by adopting schools, providing internships,
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THE ECONOMIC CONTEXT OF AGRICULTURE
and letting the schools know what types of skills workers will need.
Some businesses are already pitching in.
With that in mind, I offer eight points that I think are crucial to
ensuring an adequate supply of people to provide leadership for
agriculture in the years ahead. Perhaps these points will serve to
provoke our thinking about the academic-business partnership that
is needed to meet future educational challenges.
First, we leave overemphasized the importance of academic per-
formance as the key determinant of a students potential for devel-
opment in the business environment. It is a {act that many good
students do not progress in the business community. Quite often,
there are two reasons: a lack of communications skills and an
inability to get along with people. How do we emphasize the need
for well-rounded people who are equally adept academically and
on an interpersonal relationship level?
In people-intensive businesses, the most important management
challenge is people. If these otherwise gifted people cannot com-
municate effectively or get along with their peers, great potential
resources can be lost. Such problems might be eased if these bright
and skilled people were given greater exposure to such courses in
college as basic psychology, communications, and team building.
Second, we need to do a better job of identifying people with
managerial and technical developmental potential so that we can
move them through a broader spectrum of experience in a shorter
time and thus reward them more quickly and retain them in the
process.
Although job skills are becoming increasingly specialized and
the natural inclination is for employees to become comfortable with
their specialty, the need for broadening the skills of managers in an
expanding menu of business disciplines is apparent. Perhaps busi-
ness and academia can work together more effectively to identify,
test, and confirm the developmental potential of key individuals
and thus go on to expose them to specialized advanced training.
Third, we need to identify more quickly the reasons why so
many young Americans lose interest in pursuing careers that are so
critical to the strength of our economy and our global effectiveness.
Business and academia need to team up to learn how to identify
promising people at an early point in their education and develop-
ment and thereby help to steer them into rewarding and successful
careers. It seems to me that it is feasible for industry and academia
to find long-term programs to educate our youth, beginning in el-
ementary schools, with respect to the opportunities that may be
available if they pursue specifically identified training in college.
Fourth, we need to acquaint undergraduate and graduate stu-
dents with the reality of "combat duty" in the business community.
We need a broader variety of internship programs to equip them for
frontline hazards.
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AGRICULTURE AND THE UNDERG~UATE
Fifth, there is a desperate need to get youth in the United States
more interested in what a global "one-worldn economy means and
the significance of international trade. Despite the excitement that
such a career could hold, the percentage of graduates from either
high school or college who have some foreign language capability
is very small. Why? How do we make available to our students
greater opportunities for study and work experience abroad?
Another challenge that merits our mutual concern is the fact that
so many young Americans lose interest in subjects that are so
crucial to the U.S. economy and our global effectiveness. I refer to
the fact that we are graduating a declining number of engineers in
comparison with other countries. And at a time when our food and
agricultural system is open to great opportunity, enrollment in our
schools of agriculture has declined steadily over the last 5 years. If
the agricultural curriculum is to keep pace with the employment
demands of the agricultural and food sector, it also needs to pro-
duce graduates familiar with economics, business market analysis,
sales and advertising, computer science, and business management.
Points six and seven are mirror images. what can academia and
industry do to improve executive education, both development and
training. We have agreed, I think, that we must mutually support
efforts to attract students, keep them in school, and prepare them
well for their business careers. Is there not also a need and oppor-
tunity for continuing executive education and for advanced training
in business disciplines for corporate board members?
Conversely, does industry have a role to play in improving the
quality of educators? Is it too far a stretch to suggest that profes-
sors might benefit from an introduction to the real-world business
environment?
Finally, industry and academia must more effectively finance and
commit to basic research and development in areas that will best
serve our industrial and consumer needs. Industrial spending on
research and development rose only 1 percent in 1990, totaling
$74 billion. We need these new minds to help us to get the most
from our spending on research and development. More of it could
be dedicated to that rapidly growing field known as Speed to mar-
ket"_the reorganization of companies to accelerate the rate at which
they can produce new goods and services. increasingly, profits
are coming from new products.
1 close with an observation by human relations expert Ralph
Stayer in the Harvard Business Review. "People want to be great,"
he says. "lf they aren't, it's because management won't let them
be" (Stayer, 1990:82). I think enlightened management today is
quite receptive to the fact that people want to be great. Companies
that attract the right people reward them not with just money, but
they empower them or grant them the directed autonomy to be
great.
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THE ECONOMIC CONTEXT OF AGRICULTURE
Tragic but true, the millions of unmotivated American youth rep-
resent a great waste to American agriculture. We must find better
ways to tap and unlock their potential to deal with the forces of
change that are reshaping the economic context of agriculture.
Reference
Stayer, R. 1990. How I learned to let my workers lead. Harvard Business
Review (Nov-Dec):66-83.
RAPPORTEUR'S SUMMARY
James L. Rainey initiated the session by emphasizing the impor-
tance that leaders in agriculture accept their roles and responsi-
bilities in building an understanding and acceptance of a rapid agri-
cultural evolution that is fueled by scale economies and global
competition. He outlined developments that will have an impact on
U.S. agriculture and emphasized the importance of industry in hav-
ing a role and being obliged to participate in the business of educa-
tion by adopting schools, providing internships, and informing schools
as to the type of skills workers need in the marketplace. He em-
phasized eight points that are crucial in ensuring an adequate sup-
ply of people to provide leadership for agriculture in the years
ahead.
The subsequent discussion centered around students who enter
the world of work in business and included the following items:
· How does one get industry and academia to link and form
relationships? Various alternatives were discussed, particularly the
use of sabbaticals. It was agreed by all parties that a greater
commitment is needed by industry.
· Business firms need to keep a presence on campus, even
when they are not hiring. During the agricultural recession in the
early 1980s, many firms ceased recruiting efforts. it subsequently
became difficult for them to resume their recruiting activities.
· Agricultural graduates do a good job in entry-level positions,
but they often have difficulties in competing for upper-level man-
agement or chief executive officer positions. It was agreed that
there is a critical need to identify students on campus and in busi-
ness firms much earlier and help them move through a variety of
disciplinary experiences in preparation for upper-level management
positions. However, stiffer competition can be expected as indi-
viduals move up through the various managerial levels.
· How do students obtain the necessary~combat" experience in
business firms? Various options were discussed, including the use
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AGRICULTURE AND THE UNDERGRADUATE
of mandatory and optional internships, the expansion of a college
education beyond 4 years so that students may have business
experience prior to graduation, or the use of cooperative education
agreements between colleges and business firms (examples would
be the programs at Rutgers University and the University of Califor-
nia at Davis). It was also agreed that faculty can contribute by
becoming more knowledgeable by spending some time in compa-
nies and living in the Trenches."
· There was a consensus that typical shortcomings are commu-
nications skills in graduating agricultural students who enter the
world of business. Suggested communications skills priorities were
listening (what is not said as well as what is said)' writing, and
speaking. The importance of faculty of colleges of agriculture in
dealing with English and communications skills, and not just leav-
ing these to the communications faculty, was strongly emphasized.
· The last discussion item dealt with interpersonal skills for stu-
dents who enter the world of business. How do students get along
with other people without becoming "yes" people? The importance
of college courses dealing with basic psychology, teamwork, and
communications was again stressed. It was also suggested that
students need to learn the "sphere of influence" needed to get a job
done and work with people. Students must also learn that working
effectively with others is a critical element of their accountability
and success.
250
Representative terms from entire chapter:
business firms
