The Balanced Scorecard as a Management Tool for Arable Farming

Abstract

Management requirements for crop farming are high and will rise in the future. Arable farms are challenged by volatile markets, growing administrative burdens, increasing operating costs and growing competition for land. Management skills have become much more important for farmers in recent years and this trend will continue in the future. There are numerous instruments like accounting software or crop field cards integrated in daily management practice, but there is a deficiency of a fully integrated management system to give an overview of all areas of the farming business. This gap can be closed by the management tool Balanced Scorecard (BSC) that provides an overview of all production and management activities on a farm. Therefore, with the aim to transfer the BSC concept to crop farming, German farmers and agricultural advisors were surveyed to get insights into the success factors and key performance indicators in the four BSC perspectives they consider most relevant for the operational success of arable farms. By the use of a cluster analysis, three different farm types were identified according to their visions and strategies. For the three farm types the key performance indicators that the respondents considered most relevant for farm performance were figured out. Implementation of the BSC to crop farming can result in a big benefit for management practice. The BSC focuses vision and long-term strategy with the main goal to ensure consistency of the farm and increase farm performance.

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