Digital tools as drivers of financial control in fruit growing

25 Jan,2022

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Last year, the Centre for Business Management in Horticulture and Applied Research (CMBH), the Chamber of Agriculture Lower Saxony and we (Farmable) started a collaboration. Together, we want to better understand how digital tools can facilitate business management and decision making in orchard operations.

As part of a practical research project, Luis Müller, research associate and PhD candidate at CMBH, is doing extensive research on the topic of digital transformation of financial control in the fruit growing sector. His goal is to find out how and whether technologies, as in the case of farm management apps such as Farmable, can support managers of fruit farms in improving and simplifying business management.

As Farmable's founder, Lars Blikom, has already discussed in his blog series and knows from his own orchard, business management decision-making in fruit growing operations is often based on experience and intuition. Financial management and controlling practices are rarely applied as comprehensively as they are taught in business economics. The recognizable benefit in relation to the effort in everyday life seems rather small to farm managers.

Other barriers that Luis sees for the low adoption of accounting and financial controlling include:

High workload in day-to-day business operations, which leads to less capacity for strategic tasks
Complexity of business management, e.g. due to different time periods for the generation of cash flows (i.e. costs and revenue allocation)
Data basis in the farm is not available or not collected

Against this backdrop, it was important for us together to understand what is the current state of financial controlling on fruit farms and how do farm managers believe technology can add value to business management activities on their farms.

As we did when developing the Farmable Farm Management App, the CMBH and Chamber of Agriculture believe that the key to this project is working closely with growers. For this reason, Luis Müller began to further explore the needs of farms linked to finance management through initial farm visits and interviews with producers. Some of them already use Farmable extensively and others use it less actively.

Among them were farms from three main fruit-growing regions (Lake Constance, Altes Land (in northern Germany) and the Rhineland), which already actively used Farmable during the last season. For example, they have already documented their complete crop treatments with the app. Others have so far only tried out a few features and use digital tools on the farm only sporadically.

The big question, which Luis wants to answer in the course of the collaboration is whether and how digital tools for financial controlling can improve business management and make decisions more data-based. Initial findings in this regard from the orchard visits provide an interesting, first insight:

The requirements of farm managers for software solutions in general and for financial controlling in particular, are very individual. The company structure, entrepreneurial personality, business expertise and interest in using new technologies have an influence on the use of digital tools.

There is a wide range of how accounting and financial management tasks are handled. For example, some business managers are deeply involved in business management issues, while others outsource accounting entirely to their tax advisors.

Data from digital sources for business management are not fully available. In addition, the desire to bundle and integrate data from individual business areas and technologies comes up repeatedly.

The added value of the digital availability of data, e.g. from production activities, outweighs the disadvantage of the sometimes time-consuming mobile and manual collection of data when carrying out and documenting work processes.

Particularly important advantages over subsequent data entry in the office are the elimination of time spent on duplicate documentation and translation errors. I.e. farm managers recognize a potential increase in efficiency to their documentation processes.

These initial interviews have provided an interesting knowledge base of what farm managers see as opportunities in technologies for data collection and processing. At the same time, however, it is clear that we need to explore and understand these initial findings in more detail so that data collection efforts can be reduced and on-farm decision-making processes can be supported in the most user-friendly way possible.

In order to put this needs analysis on an even broader footing, we would love to hear from any farm managers who are interested in participating in an interview and possible farm visit. If you are interested in learning more about our project, please contact us:

Luis Müller (ZBG)

E-Mail: mueller@zbg.uni-hannover.de

Max Bangen (Farmable)

E-Mail: max@farmable.tech

Centre for Business Management in Horticulture and Applied Research (CMBH)

On behalf of the ministries of agriculture, the CMBH has been conducting economic business comparisons in the horticultural sector for more than 60 years. About 1,000 farms (approx. 150 fruit-growing farms) participate in this industry comparison each year. The CMBH also conducts research on horticultural economic topics and transfers business management content to horticultural practice, consulting and educational institutions.

Chamber of Agriculture Lower Saxony

The Chamber of Agriculture Lower Saxony is the autonomous organization of agriculture in Lower Saxony and supports horticultural businesses with applied research and advice.

Farmable

Farmable was inspired by a team of Norwegian fruit growers who experienced the lack of digitalization in their own operations firsthand. We, therefore, focus on developing a user-friendly digital platform specifically for fruit and tree crop growers. Our mobile app and web-based online portal, released in 2019, is constantly updated with more features for fruit and tree crop growers thanks to more ideas and direct feedback from growers.