Farm-Aid for Accountants?

Rain on the keyboard, blood on the mouse: Changes in the accounting business recall the plight of the small farmer in the 1980s.

By Frank Stitely
The Relentless CPA

John Mellencamp’s hit song, “Rain on the Scarecrow” chronicle the decline of the small American farmer in the 1980s.  Farmers faced economic devastation caused by new technology and emerging international competitors.

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Expensive new machinery and international competition transformed farming from a sleepy vocation handed down between generations to international global commerce driven by technology and sophisticated business metrics.  Farming became a real business.

Small farms disappeared as expensive machinery demanded economies of scale that could create a sufficient return on capital investment.  International competition lowered prices to where new technology was required to compete with lower-cost international labor.

Farmers needed to raise the level of planning beyond pushing seeds into the ground and waiting for favorable weather.  They began to pay attention to detailed yield metrics and weather patterns, planning irrigation to effectively use natural rain patterns.  They used Monte Carlo simulations to plan which crops to plant and sell.

The ones who didn’t change went bankrupt or sold and retired.  Musicians held a concert, Farm AID, to call attention to the farmer’s plight.

Driving to work this morning, I realized that changes in the CPA industry parallel the plight of the small farmer in the 1980s.