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This past winter I attended the Wisconsin Association of School Boards State Education Convention. One of the presenters was David Horsager, who wrote the book “The Trust Edge.” Mr. Horsager pointed out that one of the biggest costs of doing business is the lack of trust and gave the example of Volkswagen’s emission scandal and that the resulting loss of trust cost millions of dollars. Horsager discussed his eight pillars of trust: clarity, compassion, character, competence, commitment, connection, contribution, and consistency.

Two of the major take-aways in the presentation were the concept of “Trust isn’t given, trust is earned” and “The only way to rebuild trust is to make and keep a new commitment.”

How does the discussion of trust relate to agriculture?

I learned early on as an extension agent that in the area of farm management not all balance sheets and cash flow projections can be trusted. The late Bob Larson was the Farm Loan Manager for the USDA Farmers Home Administration in Price and Iron Counties in Wisconsin. I met with Bob weekly to work on joint clients’ financial situations. Very often I was frustrated with farm financial plans that I had worked on with clients that could not be approved by Mr. Larsen. After several discussions Bob asked me to go on some farm calls with him. I soon learned that some of the clients I had worked with did not give me balance sheets that truly reflected their financial situation, and that made for cash flow projections that were a piece of fiction and of no use to anyone. When preparing financial statements and projections, honesty is very important, and if the preparer has little financial competence or lacks the quality of character, the results will be a waste of time for all and could lead to financial failure of the farm enterprise.

Trust is also important when considering the impact agriculture has on the environment. A great deal of time and money goes into preparing nutrient management plans. Plans are prepared and need to be followed to protect the environment. If a producer prepares a plan just for the sake of preparing one, we have a breakdown in what the nonagricultural citizens are expecting for results. The past two weeks many of Wisconsin’s newspapers have been filled with stories of polluted wells and streams and the need for citizens to drive many miles to obtain drinking water. Several of the stories included details about some operators that have repeatedly mis-applied manure, have had recurring manure spills, and other incidents related to the management of manure. This lack of commitment on resource management or lack of competence of the manager causes a great amount of stress on being able to trust farm managers with the management of the environment by those not involved in agriculture. We all end up paying for those that create an environment that lacks trust due to bad actors. Business costs will jump as more regulations are created just because some lack the ability to be trusted.

Crop insurance fraud is another example of how individuals acting to enrich themselves at the expense of others can lead to lack of trust. Taxpayers that support the program with subsidies to the program begin to believe many are involved in stealing funds. Many other producers begin to question the program that they are supporting with their premiums. The lack of trust begins to force more regulation, with additional auditing staff and monitoring of payments on losses.

Reagan in the 1980s made a statement concerning the monitoring of the USSR and arms reduction. His statement was short, “Trust, but verify.” The lack of trust certainly does raise the cost of doing business. If everything must be verified, we have just made business cost all of us more. Other areas of concern in agriculture and trust are the applications of technology. Some of this technology has been with humans for thousands of years such as irrigation, and others are more recent such as genetic engineering. I think it is important to realize that we need our consumers to trust us as agriculturalists and when it take a path that may harm that trust that we have earned, we all pay a steep price to earn back that trust!

Bob Panzer farms in Chippewa County, WI and is a retired lender that offers farm management consulting in the Midwest and Great Plains regions. He may be contacted at 920-539-8728.

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