Planning an Agricultural Project

Brad Ward has many years of experience in agricultural finance as a loan officer and underwriter, and has reviewed and advised on numerous business and farm plans. He also worked for 3 years on the North Coast of Honduras as the farm manager for Cornerstone Farm/Hospital Loma de Luz. His background and experience mean that he has a good grasp of what questions are important to ask when planning an agricultural project. Brad recently joined the ECHO staff.

It has been said that a goal without a plan is just a wish. Studies have shown that individuals with clear, written goals are significantly more likely to succeed than those without clearly defined goals. For example, a study conducted by Gail Matthews, Ph.D., at the Dominican University, found that individuals with written goals had a 42% higher success rate in achieving their goals than those without written goals. In addition, the study showed that individuals who made a public commitment to their goals by sharing them with a friend and allowing themselves to be held accountable to their action plans were 78% more likely to realize success. To be sure, our best efforts don’t always result in our definition of success, and we need to rely daily on God so He can direct and even change our path. But Matthews’ oft-quoted study illustrates the effectiveness of not only setting goals, but also writing them down and partnering with others as we seek to be better stewards.

A farm / agriculture project plan is a living document. Specifically it is a tool that can help focus finite energy and intellectual and capital resources so that we can make the very most of the “talents” with which our Lord has entrusted us. A good plan accomplishes three main tasks. First, it paints an accurate picture of the agriculture project’s current status. It accounts for all of the potential assets and liabilities that affect the project. Second, the plan paints a picture of what the designers hope the project will become. It shares a vision of the project at a certain point in the future. Thirdly, a set of step-by-step instructions link the picture of the current reality and the goal of the project, helping participants travel from ‘that which is’ to ‘that for which they hope.’

This article sets out to give an overview of one proven method for creating a written agriculture project plan. Because of the scope of the topic, this article will primarily focus on the basic structure of a farm / project plan, the processes of analyzing and recording the project’s current situation, and finally the process of refining and articulating the vision of the project as it reaches its full potential. These processes can be used for a great variety of projects including demonstration farms, commercial farms, institutional food production and even small family / subsistence farms. Also, these processes can be useful when working with communities to develop plans for local food security and cooperative income production. An in-depth discussion of how the farm / project plan can be used as a vital management tool will be discussed in a future article. Remember that there is no one right method to organizing, planning and executing a project. Hopefully the ideas shared in this article will inspire your own creativity and will convince you of the value of putting your plan into writing.

To begin, organize your thoughts by building a table of contents, as shown below.

• Introduction
• Current Situation Analysis
• Farm / Project Vision Statement
• Introduction to the Individual Components of the Farm / Project
• Individual Component Plan
• Current Situation
• Vision
• Action Plan with Timelines
• Component Financial Tools
• Component Integration
• Financial Statements
• Support Documents

With the structure of the plan in place, I will briefly describe the function of each item in the above mentioned table of contents.

The Farm Plan Introduction

The introduction serves as a brief one or two-paragraph description of your reasons for constructing a written plan, with a brief outline of how the plan will be used to help you manage your farm / project. One reason for creating a plan could be the desire to systematically assess the resources that are available to begin or expand a project. Another reason might be to provide a tool to help communicate the scope of a project and keep stakeholders focused and accountable.

Current Situation Analysis

This section of the plan is a comprehensive and detailed description of the current state of the project. If the project has not yet begun, this section will describe the current environment in which the project will commence. Descriptions will include both the tangible and the abstract. Tangible items might include descriptions of the size of the land, soils, the terrain, current use, water, climate, existing structures, nearby land uses, available financial resources, etc. Abstract items might include descriptions of things like relationships within the community in which the project will take place, the potential markets for your products, the political climate, expertise of those involved in the project, etc.

It may seem difficult to find time to construct an accurate and detailed description of your farm / project’s current state, but without this critical first step the path to a hoped for future will be filled with unnecessary missteps and disappointments. As with any complex project, defining the major categories and then dividing the categories into manageable groups can help you work systematically toward success. Another advantage of compartmentalizing the current situation analysis is that it allows for the sharing of work. Some parts of the analysis will require fact gathering. By delegating these tasks, the work can be completed more efficiently and additional points of view can be represented.

What follows is a list of major categories (physical characteristics, environmental factors and community factors) with a partial list of subgroups that were used as the structure for the current situation analysis of a farm plan in Central America. There is no one right method for constructing a current situation analysis, so use this list to help inspire your own creativity.

1. A. Physical Characteristics

   1. a. Farm size
   2. b. Terrain
   3. c. Soil types

   4. d. Water

      1. i. Existing water sources
      2. ii. Possible water sources

   5. e. Infrastructure

      1. i. Fences
      2. ii. Buildings
      3. iii. Roads
      4. iv. Ditches

   6. f. Existing crops / plants

2. B. Environmental Factors

   1. a. Climate

      1. i. Rainfall
      2. ii. High / low temperatures
      3. iii. Seasons
      4. iv. Extreme weather events

   2. b. Sunlight

      1. i. Day length
      2. ii. Shade / full sun mapping

   3. c. Erosion issues

   4. d. Local crop growing seasons

3. C. Community Factors

   1. a. Local institutions
   2. b. Neighboring properties
   3. c. Labor
   4. d. Security
   5. e. Existing markets
   6. f. Local food preferences
   7. g. Property use / ownership

Again, this is just a sample, abbreviated list. The more thought that is put into creating the main categories and subgroups, the better tool the written plan will be. A little effort now can make a great difference in the outcomes of the project.

Farm / Project Vision Statement

This section of the plan is very similar to the current situation section. Here again you will give a detailed description of both the tangible and abstract environments of your farm / project. This time, however, you will describe these environments as you hope for them to exist in the future. The vision statement could describe a set time (e.g., 5 years in the future), or it could be a description of the project at maturity.

The Vision Statement again considers the items listed in the Current Situation Analysis, but now it envisions new assets and products produced through the wise stewardship of the farm / project. Although some subgroups will have the same description (e.g., climate, day length, etc.), many of the descriptions will change dramatically. Additionally, new subgroups will need to be added to help describe envisioned products and infrastructure.

If the project is communal in nature, or will affect a local community (what project doesn’t?), be sure to describe the community impacts that you envision. Engage the community to allow a common vision to emerge. Whether through community meetings, focus groups or one-on-one conversations, those affected should be invited into the vision casting process. Consensus is best when it comes to decision-making; those left on the losing side of a vote may work to see the project fail or create new and difficult obstacles to overcome. If consensus among those directly impacted by the farm / agriculture project cannot be realized, perhaps it is better to wait for a time before proceeding with the project.

Individual Components of the Farm / Project Plan

Begin this section by outlining each major component of the farm / project. For instance, your farm might have (or plan to have) animals, annual crops and fruit trees. In this case, you would list each animal and each crop your plan will cover and give a brief description of their scope. An example could be:

The individual components of Happy Acres Farm:

• Laying Hens – 50 hens plus chick hatching
• Meat Sheep – 20 ewe herd
• Pasture – 2 ha intensively managed
• Corn – 3 ha rotating with beans
• Beans – 3 ha rotating with corn
• Bananas – 2 ha
• Vegetable Garden – ¼ ha with drip irrigation

If the current situation analysis and vision statement are the plan’s heart and soul, then the individual component plans are the brains and muscle! These are best described as mini farm / project plans, each concentrating on one specific component of the farm / project. This plan includes detailed descriptions of the current situation and what is hoped for in the future—for each individual component. Additionally, the individual component plan includes action plans for each major task and timelines that will help to make the vision become reality.

The more detailed and specific the action plan, the more useful it will be as a tool in day-to-day management. Action plans should include specifics such as who will be completing each task, the resources needed to complete each task and timelines in which each task should be completed. Action plans help prioritize tasks, manage resources and stay on track. Finally, the individual component plan should include the financial tools needed to manage that part of the project. This would include a budget, cash flow projection and break even analysis. Using these action plans, timelines and financial tools will be the focus of a future article.

Component Integration

The goal of this section of the farm / project plan is to eliminate competition for limited resources, identify synergistic opportunities, and prioritize activities. Use this section to describe the influence each individual component will have on the other components of the farm. To help construct this section of the plan, it might be helpful to begin by listing each important activity in the project. Next, beside each activity list all of the inputs needed and byproducts produced. This list can then be analyzed to find opportunities whereby one activity’s byproduct is another activity’s needed input.

For example, your plan might include grazing animals for meat or milk and raising chickens for eggs or meat. By analyzing your list, you would find that your grazing animals need to be protected from intestinal parasites and that your chickens need a diet which includes protein. The parasites and eggs in the grazing animals’ manure could be a good source of additional protein for the chickens. At the same time, by eating the eggs and worms, the chickens keep parasite problems in check and effectively work the manure into the soil. In this example, soil vitality is increased, feed costs are reduced, and disease is avoided through symbiotic relationships. Now structures, fencing and management practices can be employed to take advantage of this natural synergy.

Financial Statements

In this section, the financial statements of the individual components are brought together to form a comprehensive financial statement for the entire project. At minimum this should include a budget and cash flow analysis. A budget simply lays out the expected expenses and projected income of a project, while a cash flow analysis maps out the timing of the expenses and also accounts for the timing of potential income. Both tools are critical in helping a manager keep projects on track and, when necessary, make adjustments. Other good financial management tools include break even analysis and a balance sheet. These tools can be used to asses a projects’s capacity to grow financial assets. That said, keep in mind that there are valid reasons for doing a project beyond financial returns. Providing dignified employment, educational opportunities and protecting natural resources are some good examples.

Support Documents

These may include things like maps, climate data, charts and photos.

Summary

A written farm / agriculture project plan is a key component of good stewardship. The process of analyzing your current situation and goals will enable you to draw a map that can help you on your journey. Breaking big goals into small, achievable and deadlined tasks will give the daily guidance needed to stay on track. Understanding how the individual components of your farm / project work together (or against each other) helps you create a project whose “whole” is bigger than the sum of its parts, and appropriate financial reports give you the tools needed for good management and decision making. Most importantly, the planning process can help you see how God has already blessed you and help you to better put the dreams He has placed in your heart into motion.

Additional Resources

Sample financial planning worksheets and a sample farm business plan are available at ECHOcommunity.org. See the “Farm Economic Tools” section of the “ECHO Technical Notes, Other Useful Documents” page.