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ROL (return on life) an important factor when making farm decisions

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Farmers consider more than profit and loss as they make plans for farm expansion or downsizing. The business of agriculture demands that managers do their homework. ROL--return on life--puts all the hard work, all the low prices, all the bad weather into perspective.

I’ve been covering agriculture in one form or another since 1976. If I had a nickel for every farmer I’ve interviewed, every meeting I’ve attended, and especially every session on agricultural economics I’ve sat through following a lunch of fried chicken or barbecue — with beans, bread and then cobbler for dessert — I’d  be rich.

If I had collected five cents for every time my eyes closed and my head nodded while taking notes after those heavy meals, I probably could have retired on all that change.

But I wouldn’t have. I’d have continued doing this job because of a sense of purpose I heard Dr. David Kohl explain a few weeks back.

It was during a presentation at another of those agricultural economics sessions — but not one that tended to lull anyone to sleep. Kohl, professor emeritus of agricultural and applied economics at Virginia Tech, engages his audience, moving around the floor with the confidence of a carnival barker inviting folks to see amazing sights.

But he doesn’t sell spectacle. He promotes planning, preparation and fiscal responsibility.

With anecdotes, charts — not too many charts — questions and knowledge, he keeps folks on the edge of their seats, eager to learn.

He made two excellent presentations, and we’ve reported on those. But one comment he made near the end of one of those talks has stuck with me. Discussing the steps a farmer or rancher should take when deciding whether to buy more land or sell part of the farm, he said reasoning should include profit potential, cash flow, and the other economic essentials anyone should consider when contemplating such a big purchase — or sale.

But he also mentioned another factor. Return on investment, ROI, is always a key, he says. But, so is ROL.

ROL? Return on life!

That’s what encourages folks to get up in the morning, even on freezing cold days to break the ice in stock tanks so cattle can drink. It’s what convinces farmers to work into the night to plant those last few acres of cotton before the insurance deadline, and what encourages them to get those last loads of hay in the barn before the rain starts.

ROL puts all the hard work, all the low prices, all the bad weather into perspective. Because, by putting up with the calamitous nature of agriculture, farmers and their families get to stay on their farms and ranches and do what they love best.

Kohl says the business of agriculture demands that managers do their homework, do the planning, set the goals and maintain vigilance over financial liabilities. That’s part of the compact they make to continue farming.

But a farm operation is more than the bottom line, more than assets and liabilities, more than the price of cotton. It’s home; it’s family; it’s the traditions of the past and the hopes for the future.

It doesn’t hurt that a farmer or rancher makes a little money in the process of establishing or maintaining that lifestyle, and if they don’t they jeopardize their ROL. 

But it has been apparent to me — since 1976 — that farmers consider more than profit and loss as they make plans for farm expansion or downsizing. Return on life is a big factor. I’m convinced, too, that ROL is what makes reporting on agriculture something more than just a job, at least for me.

So, you can keep all those nickels I never collected for all the interviews, all the meetings and all the sudden jolts into wakefulness when my chin hit my chest. I’m good where I am.

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on Dec 1, 2011

Great piece which captured Dr. Kohl & the idea of " ROL"- return on life, which, as Smith explained, keeps one involved in agriculture, whether on the tractor, in the parlor or at the meeting.

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