As a continuation of my series on being enthusiastic about agriculture, here is the fourth reason in my top 10 countdown.
Number 4: Entrepreneurial and Wealth-Building
Number four on the countdown list of why I am excited about the future of agriculture is the ability to be entrepreneurial and to grow your wealth over the lifecycle of the business.
It is interesting to see how much more entrepreneurial agriculture has become in recent years. As a retired academic, I could see the trend starting to emerge during the mid-1980s during the farm crisis. During this adverse time for the agriculture industry, people starting started thinking outside the box rather than just marketing commodities. Direct marketing to the consumer emerged rapidly in certain areas of the country. Commodity producers started marketing directly to global customers. Soybeans, corn, wheat and cattle were sold with a differentiated value proposition rather than producers just taking
Bob Taylor and Eric Osterly of Purdue University and I launched the entrepreneurial program in the agricultural economics department at Cornell University in 1987. Visionary leaders at that time could see the need for a small business approach applied to agriculture. That program as well as the programs at Virginia Tech and other leading agricultural universities provide an excellent education for those interested in operating businesses in agriculture that are often non-traditional businesses.
One of the benefits of operating a business is the opportunity to create and build wealth. Special retirement programs such as Simplified Employment Plans (SEPs) allow one to invest in tax deferred vehicles to allow more rapid compounding of the investment. This is a benefit not available to the W-2 wage earner.
One of my former students operates a very successful agricultural and industry supply company. In a recent lecture he stated that his success came from his motivation to meet the needs of the customer and the challenge of constantly tweaking his business to stay ahead of the competition. This required him to be out on the business front lines observing, networking, coaching and mentoring his employee base.
Yes, he just sold the company for multi-millions, but his great joy did not come from the wealth, but the freedom to be entrepreneurial, challenged every day and to occasionally make a mistake, but learn from it and come back stronger.
Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at firstname.lastname@example.org.