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College Profile Extension economist and teacher Guido van der Hoeven uses hard lessons learned first-hand in farming to help producers and others gain financial control of their businesses. By Dee Shore.
Guido van der Hoeven
Ornate letter "A"bove Guido van der Hoeven’s desk in North Carolina State University’s Nelson Hall hang two saddles: The small one, used with a little Chincoteague pony he had as a youngster, was the first thing he ever saved money to buy. The full-sized one he used when he ran stocker cattle on the tall-grass prairie in the Flint Hills of Kansas.

Both are reminders of where he’s been in his life and why he has chosen to travel the trail he’s on today. His experiences – particularly as a farm manager during the height of the 1980s farm crisis – have steered him to a career as a farm business management teacher and Extension specialist in the College of Agriculture and Life Sciences’ Department of Agricultural and Resource Economics.

“I think I can really empathize with farmers who are struggling with farm business management,” van der Hoeven says. “There was a time when I couldn’t buy shoes for my children, and I don’t ever want to forget that. And I don’t want it to happen to the farmers, the students or anyone else.”

Van der Hoeven uses his experience in agricultural economics and tax preparation to help farmers run their operations with a focus on the bottom line.

Although the pressures on farmers have changed since the crisis that steered van der Hoeven out of production agriculture, they haven’t abated. Traditionally, growers have responded to such pressures by working harder and longer, increasing their yields and adding acreage to squeeze out a profit.

And, by many measures, they’ve been successful: After all, the average American farmer in 2000 could feed about 130 people, while in 1950, the average farmer fed just 27 others.

But by other measures, the higher-yields-on-bigger-farms formula has fallen short. Costs and competition have increased faster than the prices the producers get for what they harvest. And, as a result, North Carolina lost some 244,000 farms from 1950 to 2000.

“We don’t have a work ethic problem in agriculture,” van der Hoeven explains. “Farmers work hard and work smart when it comes to production. What we have is a management ethic problem.”

It’s that notion that drives van der Hoeven’s career today. Through a 300-level course in farm business management, he helps future farmers understand the importance of running their operations as businesses, with a focus on the bottom line.

Van der Hoeven also directs a series of tax-related short courses and works with North Carolina Cooperative Extension agents to help farmers understand taxes, agricultural information systems, estate planning and farm management. And he works individually with a handful of farmers each year who come to him for advice on complicated business management matters, such as transferring farms from one generation to the next.

Nationally, he serves on a National Farm Income Tax Extension Committee, which meets with Internal Revenue Service representatives to provide advice on the agency’s Publication 225, “The Farmer’s Tax Guide.” And he is among several university experts across the nation who contribute to the Land-Grant University Tax Education Foundation’s annual National Income Tax Workbook, a 700-plus-page guide that addresses issues — new and old — related to income taxes and tax legislation.

The workbook is used in tax schools held by land-grant universities across the country. In North Carolina, van der Hoeven directs the short-course series, organizing sessions covering such topics as federal tax form preparation, farm taxation and estate taxes.

Entering its 55th year, the series is conducted by the College and N.C. State’s Office of Professional Development in cooperation with the IRS, the N.C. Department of Revenue and the N.C. Society of Accountants. In 2003, the series consisted of 12 courses held across the state.

While his focus has been on helping farmers, the audience for the tax courses is much broader. Participants include taxpayers, professional tax preparers and aspiring tax preparers who want to stay current on changes in tax rules and earn continuing education credits.

“One of my management philosophies has been, if there is a way I can reach more people through my work, then it’s something I would do,” he says. “There are 1.3 million-plus tax practitioners nationwide — and we all pay taxes.”

Each of his endeavors is informed by past experiences that have taken him around the world and through quite a few career shifts. Born in Australia, van der Hoeven came to the United States when his Dutch father took a job with a Dutch company in Mount Airy. His family moved to Virginia, then to Kansas, where van der Hoeven earned a bachelor’s degree in natural resources management and soils at Kansas State University in 1980.

He went on to become “the second man in a two-person company,” working for three years as an agricultural consultant and research associate with a man who ran a crop consulting company with a 27-acre research station in Louisiana.

Along the way, he married the girl he’d met in high-school French class, and her family asked him to help run a 4,000-acre farm and ranch back in Kansas. A part of this land was owned by his wife’s family since her great-grandfather homesteaded in northwest Kansas following the Civil War. That was in the mid-1980s, just as one of the nation’s worst farm crises was taking hold.

“I spent two-and-a-half years there,” van der Hoeven recalls. “When I got there, corn was selling for $3.25 per bushel, and it was soon down to $1.40.”

He gave up. But he vowed to learn from the experience. Determined to learn more about what had happened to the farm economy and how farmers might avoid such crises, van der Hoeven headed back to his alma mater, Kansas State University, to study agricultural economics. After earning his master’s degree in 1989, he went to work as an extension agricultural economist, helping 180 farmers in the northeast part of Kansas with record keeping, business analyses and intergenerational transfers. Meanwhile, he took a side job as an income tax preparer.

Since coming to N.C. State University in 1995, van der Hoeven has found ways to use both his experience in tax preparation and applied agricultural economics. His first job was as director of Cooperative Extension’s farm business management system, designed to help farmers with record keeping and business analysis. But as the number of farmers shrank, demand for the service declined, and van der Hoeven shifted his efforts to focus on taxation, agricultural information systems, estate planning and farm management.

One of the points he often tries to make is, “It’s not what you make, it’s what you don’t spend.”

“I love helping people and getting people to think about their situations critically,” he adds. “It’s like peeling an onion back to let people see what’s really there and use that to make informed decisions about their operations and their future.”

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