Die Bodenkultur - Journal for Land Management, Food and Environment

G. Breuer and H. Peyerl:

Shareholder Value as a basis for strategic business decision making in family farms


Various methods of business evaluation, especially Discounted Cash Flow methods have been employed up until now in value based management of large capital companies. This study proposes to examine the practicability of applying these methods within the special framework of family farming businesses. In the first instance the accountancy problems due to the existing special circumstances within smaller business structures will be displayed and analyzed. Based on this, a simple evaluation model will be drawn up, which should serve as useful in providing a choice of alternative action in business strategy. The estimate will be assessed using an arable farm, which is considering a change to organic production methods. In conclusion the suitability of the methods for farming business planning will be evaluated and problem areas will be highlighted.

Key words: Business evaluation, business planning, discounted cash flow, family farm, shareholder value.