Why measures of farm business success matter

Abstract

Measures of farm business - biophysical, financial, personal, community - are traversed in this paper. What constitutes success in farming has evolved over time, reflecting changes in the business operating environment and advances in measurement tools. Farmer of the Year competitions weigh success differently: community involvement and leadership are important criteria for one national award; others are heavily biased towards financial performance. Not surprisingly farmers view success in different ways too, emphasising the importance of understanding personal-family goals when evaluating success. While "success is in the eye of the beholder", on an aggregate basis continuous improvement for the pastoral sector is vital in sustaining competitive advantage in the marketplace. Looking to a future with fewer, larger farms, increased market competition and shortages of competent labour, better measures than those currently used are needed in relation to meeting customer needs, growing the farmers' share of market returns and optimising the human element in a farm business. Measures and their use by management are important if New Zealand farm businesses are to maintain their competitive edge in global markets. Keywords: farm business, performance measures, top farms.