Don't forget the real drivers of rural communities!

A worrying trend in recent years is the decline (in general) of the regions in New Zealand. “Are NZ’s small towns dying?” asks a recent NZ Farmer news article. They may be dying, but do they have to? I don’t believe they do but what do we do about it?

The article reported a Massey University professor outlining the current trends and main issues. These included young adults and migrants moving to larger centres, an ageing demographic remaining behind, migrants and others not liking to work remotely and a lack of training for young people. He said that some local and regional councils were in denial about the issue. Some communities’ migration had been positive but this was a minority. It’s all very worrying because if we lose strength in our rural communities, we lose strength in our economy and country.

Four challenges are facing the regions, namely retaining young adults and skilled workers, recruiting young adults and immigrants, maintaining services such as schools and medical facilities and training young people to fill jobs. “We need good stories about why people should stay in local communities,” the professor said. I feel he is spot on here but his main suggestion of relocating some services to the regions instead of being in the large cities (although great) don’t go far enough.

People live in the regions for many reasons. Fundamentally though, they live there because they feel connected to vibrant communities that fulfil their needs. Those needs may include some combination of work, business, income, recreation, health, education, friendship, family needs or other factors. Rural communities exist because people live there yes, but mainly because there is strength both socially and economically. Reduce that feeling of connectedness in any way and the rural communities reduce. If this continues, only a few hardy souls will remain. Ghost towns are not pretty!

The real reason we have rural communities is because they service the industries based there. Remove those industries and you remove the communities. Strengthen those industries and the communities thrive and grow. There may be many industries rurally but the major industry is of course farming and businesses that support it, something NZ has always had the resources and skills for. So, the question is how do we strengthen farming so the communities thrive?

To start with, encouraging farmers to think like business owners and step up their business results means there is more servicing required and more spare cash available to move around the community. “But the sheep and beef farming industry has been working hard on this for years,” I hear you say. Yes, that’s true! So why are the regions declining?

It is true that some farmers are their own worst enemies and don’t get out there and make it happen for themselves. However, perhaps what farmers in general have been doing is not working positively enough to stop the decline, let alone turn it around.

In recent years, it has become clear to my clients that the size of the farm is less the issue in generating profit and more about turning what they do have into profitable enterprises. They have what they have and they need to run those profitably. From there if they want to expand, they can multiply out a higher profit system. If they try to get bigger first, they just multiply out a low or no profit system on a bigger scale. A no-brainer, right?

We have looked at options where a 500 acre sheep and beef business can support a family quite well because it is being run profitably, through real business understanding. What if there were 3 families on 1500 acres instead of one! Imagine the services required for that - awesome! Interestingly, we have a handful of clients with 250 - 500 acre properties doing pretty well. Unfortunately, these types of ideas are not common and ingrained beliefs usually see such suggestions die quickly.

True business understanding allows for profitable farming actions. It is no good continuing to train farmers to work harder and longer to increase production if their communities keep declining. As the answer to reviving communities, increasing production on its own just doesn’t work. True business understanding focuses on true profit and the actions that bring that into reality.

So, if farmers are sick and tired of poor profits, long hours, inaccurate advice and declining rural communities, perhaps they need to take a look outside the accepted square at how profitable farm businesses really operate. Then, by implementing profitable systems and churning out real spare cash, we may just see these declining regions start to rock on! Vibrant rural communities are no accident, they are a choice!

If you are curious about how the GrowFARM® System can help sheep and beef farmers generate the profits they really want, contact me here.