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On-farm decision making

By Danielle Lannin England

Farming is a mix of decisions.

We make decisions all the time, and generally they work out OK. Most of us don’t spend time thinking about how we make decisions, and what might be influencing our decisions, but there are a lot of factors that shape the final decision we make.

A decision is simply a conclusion or resolution reached after consideration. It is the result of processing a situation and deciding what action to take. Choosing to do nothing is a decision, and may be a good decision given the circumstances.

Just as you invest in inputs and machinery to grow and harvest crops, pastures and livestock, it is equally important to invest in and service the humans who are making the decisions in your farm business. Faulty decision making is as damaging to a farm business as faulty and dysfunctional equipment.

Decision making is a skill. This means it needs to be practiced and refined. It is a learnt behaviour that can be improved over time. There are a series of steps or a process that can be followed to guide a decision. The purpose of this article is to give you some tips and tool to use that will help you improve your decision making processes on-farm.

The difference between a ‘good’ decision and a ‘right’ decision

It is often said that the only difference between the top 20% of profitable farmers and the rest of the industry is their ability to make the right decision at the right time. So what is a ‘good’ decision versus a ‘right decision’?

A ‘good’ decision is an informed decision. To be informed you need to:

  • Appreciate the consequences of the various actions you could take

  • Have the least regret if things don’t go according to plan

  • Increase the chances of a favourable outcome

A ‘right’ decision can only be judged in hindsight – it is a matter of time.

The decision you make today may be different to the decision you make tomorrow. Things change and new information becomes available that will change your decision. That is OK, and it is a part of life. The hard thing about decisions is that they have to be made without hindsight, before the consequences or benefits are known.

Factors that influence our decisions

It is a ‘good decision’ if the head, heart and gut align.

The head

The head refers to the step-by-step logical and orderly approach to analysing and solving a problem. It is also referred to as the analytical approach.

A large number of agricultural advice and decisions are based on information derived from using the ‘head’ approach. These logical factors are the result of the countless budgets, strategic plans, cropping systems trials, fertiliser and yield response data that we use to guide our decision making on-farm. These analytical approaches allow for us to make an objective comparison between different options.

The heart

This is the emotional influence on the decision. They are based on our values.

As humans we all have our own values, beliefs and attitudes that we have developed throughout our lives. Values are principles, standards or qualities that guide the way we live our lives and the decisions we make.

The gut

When you talk about ‘gut feel’, this is your intuition, your experiences and knowledge kicking-in and helping you make a decision.

Intuition is influenced by a number of factors. Some of the key influences in farming are:

Past experience with a similar situation Over a number of different seasons, where no two seasons are the same, you will build up experiences around how to manage the same situation (like a dry winter). These experiences will all influence the decisions you make, rightly or wrongly, about how to handle it this year.

Education During university we are trained to become analytical thinkers, to disregard any influences intuition or values may play in a decision. While this type of thinking suits research or economic analysis, it generally doesn’t provide the whole picture in a complex environment such as a family farm.

Stage of life, stage of business lifecycle At different stages of life, or at different stages of your business, you will need to make different decisions based on business or investment risk, cashflow limitations, personal motivations, or family needs. All of these will influence your intuition, or what ‘feels right’.

Stress levels During times of stress (seeding, harvest, shearing) your body produces cortisol. In short bursts cortisol helps to improve the brain function, however over long periods of chronic stress it will eventually impair the decision making process, sometimes to the point of inaction. During times of chronic stress your ability to think and rationalise is reduced, leading to poorer decisions.

While all of these factors will influence your intuition, none of them are bad IF you recognise that they exist, and that they are influencing the decisions you are making. If you do recognise these factors, it is OK. Just recognise them and move on. If you are unsure about how much they are influencing an important decision, talk to a trusted advisor or family member before you make a decision.

Making a decision and want to check your thinking? Reach out to an AgInnovate advisor - we'd love to work with you.

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