Contract Mechanical Farming Teams to Deal with Rural Labor Shortage

Yun-Shan Huang（China Productivity Center Young Farmers Consulting Team）

Due to impact of free trade and economic competition, the aging of rural labor force, and the problem of second-generation succession emerge, young farmers in Taiwan now have to face challenges in production technologies, agricultural land demand, lack of funding, and marketing strategies. To solve the problem of rural labor force, assistance to young farmers has been an important policy focus in the past 10 years. Through agricultural value-added innovation counseling and rural labor force revitalization, expertise resources of industry, government, academia, and research have been integrated to provide farmers with assistance according to their needs for development. The objectives are to enhance entrepreneurial management capabilities and innovative integration thinking, and the actual measures include the building of an agricultural exchange platform, assisting with joining the production and marketing teams and cooperative farms, industrial clustering, and agricultural entrepreneurial management.

To deal with the problem of rural labor force, according to government data, agricultural manpower teams have been established in 2017, and, since 2018, farming talents have been recruited through farmers' associations or NGO groups. At the same time, manpower revitalization teams have been organized to revitalize rural manpower in conjunction with the local governments. Then, there were cross-industry agricultural machinery teams organized according to the local demand for agricultural machinery services by providing joint human-machine services on extended areas to reduce the need for manpower. In 2021, with the assistance of domain experts, the guidelines of agricultural machinery youth farming teams were established. The management tool CBIS of this Center was used to take man-machine inventory and to establish innovative business models, etc. The contract mechanical farming teams then began testing their operation modes through trials and modifications after rolling review. Integration with the governmental HR platform was established for a solid overall operation mechanism.

The visits to contract mechanical farming teams in 2021 would show that the operation of these teams needs to take different models considering factors of regions, climates, cultural environments, policy orientations, etc., so as to pursue continued smooth operation. The following are three possible models as the writer has observed:

The team as the main source of profit for the organization

The main business of these organizations is to provide mechanical farming services, such as in Taoyuan City Young Farmers Production Cooperative, Taichung City Zhongdu Agricultural Production Cooperative, Kaohsiung City Fangzhou Agricultural Production Cooperative, Yilan County Qingchu Yilan Agricultural Production Cooperative, Hualien County Qingqing Agricultural Production Cooperative, and others. As the mechanical farming is the main source of profit, the operation model focuses on the contracted mechanical farming work, including value proposition, customer positioning, partners/activities, profit model, cost calculation, etc. Aspects of consideration may vary by the various local cultures and environments.

For example, the mechanical farming teams are meant to solve the problem of the aging and insufficient rural labor force, but, along with the increased proportion of abandoned or fallow land, some aged farmers, who had the experience of the land reform policies of “37.5% land rent limit” and “land ownership to farmers” decades ago, are hesitant to have the land cultivated by young farmers. Some old farmers have full confidence in their farming methods and are not willing to have the cultivation done by young farmers with methods unfamiliar to them. Besides, different mechanical farming models are developed in different areas due to geological and climate factors of the regions.

Some teams are organized mainly to solve the insufficiency of rural labor so a specific mechanical farming model is developed. In some other cases, differentiation of farming methods is sought to reduce the use of pesticides, integrate the farmland of team members, and enjoy the advantages of increased output value and yield. This may even attract farmers outside the team to join the mechanical farming teams.

There are two points to observe for this model: First, talent development of mechanical farming. Since the main source of business income is the mechanical farming team, sufficient manpower and efficient deployment is vital. The professional competencies and production skills are important. The personnel should have solid identity with their jobs to win the trust of the clients. Second, the integration of the agricultural machinery and the farmland in contract. The compatibility between the team's agricultural machinery and the farmland for cultivation is an important concern. It is important to consider whether the machinery and equipment are suitable for the location and the size of the farmland, and can be used in the customer so that the services in demand can be accomplished within the required time, so that both the contractors and the customers are satisfied with the cooperation.

The team as the main source of profit for a branch of the organization

This team is affiliated with a department or branch in the organization. The source of profit of the organization is from the overall revenue of all departments. The mechanical farming team may be a newly developed department or a unit of social enterprise, such as in the cases of Xianjin Agricultural Production Cooperative in Changhua County, Jiapei Agricultural Production Cooperative in Chiayi County, K.K. Orchard Co., Ltd., and Taiwan Tea Production Cooperatives, etc. In such cases, the setting of the business model of the mechanical farming team must take into account the corporate culture of the organization, and the overall goals and strategies of the overall organization, before the operational goals and strategies can be decided for the mechanical farming team.

Even with its affiliation to the organization, the team, like any business entity, still has its own visions, goals and blueprint for development strategies. For example, the organization may hope to incorporate the services of the mechanical farming team because of the unsatisfactory performance of contract production. It is hoped that, through the services of the mechanical farming team, the human sources and machinery of the local farmers can be integrated, and through the existing marketing channel of the organization, agricultural products are purchased in contracts so as to maintain the identity of the farmers with the organization. Or, in other cases, an organization may hope to contribute to the society by coordinating local farmers through mechanical farming teams to expand the contracted cultivation area and increase farmers’ income.

There are two concerns to observe for this type of team management. First, no deviation from the vision and goals of the organization. As an affiliated unit to the organization, the team should observe the corporate culture and consult the organization before any decision is made, so as not to deviate from the policy of the organization. Second, forming of a comprehensive contract farming system. A comprehensive contract farming system should be formed without violating the administrative system of the organization. This includes the contracting procedure, execution, and fee charging standards, so that the contract farming team can be self-sufficient to achieve a balance of income.

The team as an information platform without profit-seeking functions

The development goal of this type of team is not to make profit, but on the coordination of local agricultural farming manpower and the training of professional personnel in the local areas. An example is the Tainan City Quality Agricultural Promotion Association. These teams are organized by farm owners to develop the professional production manpower within the organization, so as to provide professional manpower for the farms, and also provide job opportunities for job seekers.

In this type of team management, the focus is on the assurance of the quality of the professional manpower cultivated. Frequent retraining is required to ensure the professionalism of the personnel so that each case of matchmaking has significant customer satisfaction.

The lack of agricultural labor in rural areas may affect Taiwan's food supply in the future and has been a concern of both the industries and the government offices. With the business operation models proposed by experts from this Center, assistance is provided on the conduction of inventory taking on the young farmer mechanical farming teams according to the readiness of the organizations to display the use of mechanical equipment. Visualized information is turned into operation action plans, including the design of contract farming operation plans, contract farming management plans, contract farming customer development plans, contract farming machinery training plans, etc.

The teams are guided through every step, one by one, from the visions, goals, strategies and action plans of the operation down to the work items to be achieved each month and the calculation of the planned/actual expenses, so that the mechanical farming teams gradually become a business entity that is capable of independent operation. And eventually they can integrate with the services of other business entities in the organization and also gain the trust of farmers (or agricultural organizations) to achieve more robust development of the organization.