f I Brockett's Ag Advice By John E. Brockett IB Farm Management Agent Lewistown Extension Office Labor Incentives Farm businesses have a difficult time competing with other businesses for hired help, if basic dollar salaries are the prime consideration. This has been the case for as many years as I have been in Extension. There are several reasons for this including the high amount of capital required in relation to income produced for most farm ventures, the relatively low profit margin in relation to inputs and managerial skills, and the required long hours of labor. Farmers have learned to partly cope with this by developing several so called “incentives” for farm labor. These may include housing, food, payment of part or all of the utilities, furnishing fuel for the employees personal car, and time off to hunt and/or fish. Sometimes young potential farm employees are looking for other types of incentives. They may even much time and money you're saving, being able to get tough jobs done fast And VofM I r|Y Q i economically-because I Gehl’s built-to-last skid loaders LJ are also affordable U" - You’ll enjoy the knowledge that FI your Gehl outclasses the I - 1 n competition With dual hand operated LDAD-TRAK T-bar ■ 1 r-i controls—one on each side I ■'"> within easy reach—and simpler D CCr? nto learn and use than foot L-* u V^7U uv — /u uu controls Rollback ROPS for quick serviceability Quick Hydro Lock attachment change And El**. Ask your dealer about GEHL FINANCE LEBANON VALLEY ARNETTS OARAGE HOLLER EQUIPMENT IMPLEMENT CO., INC. Hagerstown, MD CO. Richland, PA 301-733-0515 Bechtelsville, PA 717-866-7518 BINKLEY & HURST 21M4M9n NOS. Lititz, PA 717-626-4705 BENNETT MACHINE CO. Milford, DE 302-422-4837 ECKNOTH BHOS. FARM EQUIPMENT New Ringgold, PA 717-943-2131 A.L. HEM t NO. Quarryville, PA 717-786-3521 STOUFFER BROS. INC. Chambersburg, PA 717-263-8424 (MERGER'S OF FONTANA Lebanon, PA 717-867-5161 PEOPLE’S SALES I SERVICE Oakland Mills, PA 717-463-2735 GEO. W. KINSMAN, INC. Honesdale, PA 717-253-3440 HINES EQUIPMENT Crasson, PA 814-886-4183 Bel (wood 814-742-8171 be willing to forego some of those traditional perks available to farm employees. Some of them want a piece of the action. Some want a voice in management decisions, especially those that affect them personally. Some are asking for payment of health insurance and disability,' both of which are becoming major items to families. For a number of years, I have been asked by farmers and a few hired people for ideas on incentive programs. In that period of time, I have collected incentive ideas from farmers using incentives for employees. I have also found that one of the biggest incentives for farm employees is just plain old “how they are treated by the employer and employer’s family members”. One thing I did discover was that no one incentive program would fit all situations. In fact, some incentives that work for Easy angina access Plus many more convenience features Youll also enioy being able to add specialty attachments easily and quickly confident your machine can handle them Like pallet forks Utility fork with grapple Buckets Backhoes Trenchers Tree diggers Sweepers You name it Take a look at Gehls full line of LOAOTRAK Tbar control loaders and pick the one that s best tor you On the popular some farms may even be counter productive for others. Ownership of Assets Ownership of assets used in the farm business can be a satisfying form of labor incentive if it is carefully thought out and con siders both the employers and the employees goals. These assets can be livestock, equipment, buildings, or any other asset used in the' business. One of the most critical parts of this type of incentive is the written agreement. It must spell out terms, limits, responsibilities, length of agreement, review and possible change procedures, and employment termination options or results. The employer and employee should consult with someone knowledgeable about their farm business before developing such an agreement. This person should be asked for suggestions, criticisms, and a summary of potential problems that could occur with the arrangement. Some examples: A Employee can own up to 10 percent of the dairy herd. As payment for those animals owned by the employee, the employer pays the employee 20 percent of the return above feed cost for those animals. Depending on the base pay and other in centives offered by the employer, there may or may not be a charge for raising calves. drive tram Benefit lower maintenance cost greater protection for the mechanic liquid-cooled 3510 gas/3610 diesel and 4510 gas/4610 diesel loaders youll like the self level load action that keeps the load in place throughout the lift cycle And you II like Gehl s new very affordable 3310 gas/3410 diesel with easy handling and superior engineering—plus lots of power The 3310 has a 750 lb SAE rating and the 3410 has a 925 lb rating With the addi tion of the 3310 Gehl loaders range from 750 to 1225 lb SAE lift ratings Your Gehl dealer will show you how these versatile skid loaders can run circles around the competition Make us prove it with a demonstration You II enioy that 1 GEHL Gehl Company West Bend Wt 53095 ELDER SALES t SERVICE, INC. Stoneboro, PA 412-376-3740 NICHOLS FARM EQUIPMENT Bloomtburg, PA 717-784-7731 EQUIPMENT, INC. Springs, PA 814-662-2222 PETENMAN FARM EQUIPMENT, INC. DAYTON EQUIPMENT GO. Dayton, PA 412-783-6990 Carlisle, PA 717-249-5338 jfUlartin Concrete Subsidiary of Martin Paving, Inc. CONCRETE MIXED^JOBSITE METERED DELIVERY PAY ONLY FOR WHAT YOU USE I No Waste - We Mix Any Amount You Need Mixes Can Be Changed Right On The Job Mon. Thru Sat. Ephrata: (717) 733-7915 Delivery Lititz; (717) 826-2494 P.O. Box 446 Lebanon: (717) 272-7541 Ephrata, PA SPRINGS Lancaster Farming Saturday, Navamkar 22,19 M-09 B Employee may ouy a self propelled combine. The employer agrees to pay the employee a custom charge for all grain har vested on the farm by the em ployee. The employer also agrees to allow the employee to harvest other farmers grain as long as it does not interfere with pre-planned work on the farm. C Employee may purchase a semen tank and take a course in A.I. The employer may agree-to pay the employee a fee for breeding cows. The employer may also agree to allow the employee to breed other farmers’ cows after chores or at limited times other wise. D Employee may own 10 sows in a sow farrow-to-finish operation. The employer may agree to pur chase all pigs from the employee’s sows as 40 pound feeders at market price or allow employee to sell those pigs as feeders elsewhere. E Employee may own or buy a feeding facility or a silo. The employer may agree to pay the employee a rent of 12 percent of the cost or value of the facility per year as long as the employment continues with the requirement that the employer would purchase the facility for a pre-set value or a value based on appraised or book value of the facility at the time the employment should be terminated. Advantages and Pitfalls Advantages of the ownership incentive program are: (1) Em ployee does get an opportunity to build a certain amount of equity if the ownership is of capital items. (2) Employee shares in the ups and downs of the market which may make him more sympathetic with the economic straits of the farmer. (3) Employee can get some income based on his input, including the selection of the asset to be pur chased. (4) Employee becomes a self-employed person for that phase of the business and can thus use tax laws favorable to self employed people, such as depreciation of capital items. (5) Employer may save some labor related costs. (6) While employee is busy managing his own assets, the intermingled employers assets should benefit. Problems can crop up in this type of program. (1) The business may be too small to allow much employee asset ownership which will frustrate both parties. (2) There must be a considerable amount of trust between employee and employer to make it work. Example: The return over feed cost is based on the cost of the feed going into the animals, the amount of feed reported as fed, and the amount of milk produced on DHL If the employer over values feed, or the employee feeds unrepotted feed to his animals, or the DHI figures are not correct, some one will be gypped. (3) The employee may neglect the employers work to increase his own income from custom work. (4) Poor employer management may offset any good management decisions made by the employee. (5) The labor arrangement may be terminated early due to a number of cir cumstances, including death. This may result in a financial loss to the employee if assets can not be sold or moved easily.
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