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Farm management diagnosis: find the empty area first

A bank, a buyer or a partner will ask which parts of the farm have a written rule. One page, six areas and one mark each answer that, and show where to write the first rule.

Published Updated 12 min read
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Which parts of the business have a written rule? A bank manager in Cheshire puts that question to a dairy farmer with 110 cows before renewing a loan. The farmer answers with a one-page diagnosis: six areas of the farm, one mark each, made in an hour. A management practice is a rule set before the work starts and kept on paper, such as a goal with a number and a date. The diagnosis shows where no practice exists, and that is where the farmer writes the first one. The stake is real: in England in 2007/08, the best quarter of dairy farms made £335 per cow and the worst lost £361. That is £696 per cow a year, or £76,560 for 110 cows.

What goes on the one-page sheet?

Down the left of the page, the farmer writes six areas: planning, production, people, marketing, finance and sustainability. Next to each, one mark. Written means the rule is on paper and can be found. Partial means only part of it is. Missing means nothing exists. The mark does not grade how well the area runs. It records whether a rule was set before the work began, which is what a lender, a buyer or a partner can ask to see.

Any rule set before the work counts. The table gives examples for each area as a prompt, not as a list to complete.

The six areas of a first diagnosis, and what a written practice can look like in each
Area of management What a written practice can look like here
Planning A goal with a number and a date, or a SWOT analysis (strengths, weaknesses, opportunities, threats) on paper
Production A sowing window written before the season, or a service interval checked against the hour meter
People A written job description, or a list for a new hire’s first day
Marketing A selling plan with the price that triggers a sale, written before you call the buyer
Finance A cost traced to the invoice, or a rule for splitting shared costs agreed before the bills come in
Sustainability A permit with its expiry date tracked, or a map of each field’s boundaries for buyers who ask where the product came from

In every area of farm management, the work can be checked against a standard only if that standard was decided and written first.

The example dairy farm’s first sheet, in the figure, has two areas written, two partial and two missing. The farmer starts with people, because a relief milker joins in spring.

Figure: The first sheet of the example dairy farm in Cheshire, one mark per area (invented example)
The example farm's first sheet: two written, two partial, two missingPlanning is partial. Production is written. People is missing and is the first to fill, because a relief milker joins in spring. Marketing is written. Finance is partial. Sustainability is missing.Area and markPlanningpartialProductionwrittenPeoplemissingMarketingwrittenFinancepartialSustainabilitymissingFirst to fill: peopleA relief milker joins in spring

Why can’t you see the empty area from memory?

A practice you have never used leaves no gap you can feel. In textile factories in India, economists led by Nicholas Bloom found that many firms did not know practices such as inventory norms and standard operating procedures existed. A primary reason the firms hired no consultants, they add, was that the firms did not know they were badly managed.

A factory is not a farm, but anyone who has run work one way for years can miss an empty area in the same way. English farmers show a milder form of it. When the government’s survey asked why they did no more management practices, or none, the most common answer, from 36% of farms, was that they already did all they needed. The second, from 31% of farms, was no time.

So the sheet asks for paper, not for a feeling. Mark an area written only when the rule can be found in the farm’s own papers.

Figure: The two most common reasons English farms gave for doing no more management practices, or none, in 2024/25. Source: Defra, Farm business management practices in England 2024/25
Thirty-six percent of English farms said they already did all they neededReasons for doing no more management practices, or none, in 2024/25. Already doing all they need: 36% of farms. No time: 31% of farms.Share of farms giving each reasonAlready do all they need36%No time to do more31%

Do the weakest farms really use no practice at all?

More often than the others do. The government’s Farm Business Survey asked farms in England in 2024/25 which management practices they use, from a yearly planning meeting to regular financial accounts. It ranks each farm by the ratio of its sales revenue and other output to its costs, counting unpaid manual labor. It then sorts the farms into the bottom quarter, the middle half and the top quarter.

In the bottom quarter, 30% of farms used no practice at all. In each of the higher bands it was just over 10%. A farm in the bottom quarter was close to three times as likely to use none.

Figure: Share of English farms using no management practice, by economic performance band, 2024/25. Source: Defra, Farm business management practices in England 2024/25
Thirty percent of the bottom quarter used no practice, against just over ten percent elsewhereFarms using no management practice in 2024/25: bottom quarter 30%, middle half just over 10%, top quarter just over 10%.Farms using no practiceBottom quarter30%Middle halfjust over 10%Top quarterjust over 10%

Read this as two things that appear together, not one causing the other. The survey does not follow a farm before and after. Larger farms do more of these practices, so size may explain part of the gap: 52% of very large farms keep regular financial accounts, against 24% of small ones. The survey also counts practices of the whole farm. Applying the idea to each of six areas is the diagnosis’s own premise, which the survey did not test.

A review of 24 studies on how farmers decide, published in Heliyon in 2023, links clear goals and plans with better results. It adds that planning and recordkeeping relate to farm performance, but that it is not a conclusive finding.

So the diagnosis fixes nothing. It gives a dated page. Next year the new sheet sits beside this one and shows what changed, which a score kept in memory cannot do.

How far apart can two farms end up in the same year?

Very far. Wilson studied 228 dairy farms in England for the 2007/08 year. The best quarter made a net margin of £335 per cow, and the worst quarter lost £361 per cow, in the same country and the same year.

Wilson finds that most of this gap came from yield, milk price and labor per cow, not from the practices on the sheet. One management difference stood out. Of the best quarter, 53% regularly compared their financial figures with other farms’ figures, against 30% of the worst. The best farms also had larger, higher-yielding herds, so the study cannot say that comparing produced the profit.

For the finance row, it still gives the sheet a question: does the farm compare its figures with other farms’ figures?

Figure: Net margin per cow in 2007/08 and the share that compared figures with other farms, best and worst quarter of 228 English dairy farms. Source: Wilson (2011)
The best quarter made £335 per cow, the worst lost £361Net margin per cow a year in 2007/08: best quarter £335, worst quarter a loss of £361. Share that regularly compared figures with other farms: best quarter 53%, worst quarter 30%.Net margin per cow a yearBest quarter£335Worst quarterloss of £361Compared figures with other farmsBest quarter53%Worst quarter30%

What do I write first, and by when?

Start with the area marked missing where a decision comes soonest, because that is where the farm has no rule to check the work against. For the Cheshire farm that is people: the relief milker starts in spring, and the first document is a written first-day list, as in the first-day checklist.

If the missing area is planning, the first practice is usually a written SWOT analysis, four short lists of the farm’s strengths, weaknesses, opportunities and threats. The priority picked from it becomes a goal with a number and a date, which is checked when the date arrives.

Then comes the date for the full diagnosis: the same sheet, done again practice by practice with the people who help run the farm. Include at least one person who does not report to the farmer, so someone can call an area empty without worrying about the reaction.

Figure: The four steps after the first marks, in order
Four steps after the first marksOne: circle the missing area where a decision comes soonest. Two: write the one practice that would fill it. Three: write the first document that practice would leave. Four: set the date for the full pass and name who takes part.1. Circle the missing areawhere a decision comes soonest2. Write the one practicethat would fill it3. Write the first documentthat practice would leave4. Set the date for the full passand name who takes part

Expect the first sheet to have mistakes: missing where something was once written and lost, or written where there is only a note one person can read. With the date on it, the sheet can be corrected. A year from now, each mark can be checked against the farm’s papers, which a version kept in memory never allows.

Provenance

Derives from
  1. Department for Environment, Food and Rural Affairs, Farm business management practices in England 2024/25, statistics notice
  2. Bloom, Eifert, Mahajan, McKenzie and Roberts, Does Management Matter? Evidence from India, Quarterly Journal of Economics 128(1), 2013
  3. Wilson, Decomposing variation in dairy profitability, Journal of Agricultural Science 149(4), 2011, 507-517
  4. Taramuel-Taramuel, Montoya-Restrepo and Barrios, Drivers linking farmers' decision-making with farm performance, Heliyon 9(10), e20820, 2023
What this article covers
What a farm management diagnosis is for, why the area with no practice at all is hard to see from memory, what the English survey and one dairy study show and do not show, and how to mark six areas as written, partial or missing in an hour.
What it does not cover
How to run the SWOT analysis or write the plan that comes after it. Filling an empty area is a job for planning, production, people, marketing, finance or sustainability, and depends on the skills of whoever runs the farm.
Published
Updated
Error found
Point out an error and the article is corrected with a note on what changed.

How to cite this article

Rurivia. (2026, September 5). Farm management diagnosis: find the empty area first. https://rurivia.com/en/library/planning/what-a-management-diagnosis-is-for/


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