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Skills for Negotiating; Land Rents, Contracts, Purchases and Other Business Agreements

by Don Nitchie, Extension Educator

Over time, you can fall into a mind-set, especially with long-time landlords, lenders and other suppliers or vendors you may work with—that all they care about is the “bottom line”. This maybe true for some but, not necessarily for all. Now with the pressure caused by tight or negative profit margins, to reduce costs—good negotiating skills and practices can be a significant business advantage. This can be the case even with your long-term business relationships and certainly with new ones you are considering. As a decision-maker you have lots of good data at your disposal-from FINBIN and many other sources. While this data is very useful in business negotiations, “people skills” are required beyond just the use of or knowledge of data, to be successful in negotiating. The following are negotiation techniques highlighted in Katie Shonk’s Guidelines for “Getting to Yes” blog post, with examples that have been customized for specific farm business situations:

1. Separate the people from the problem or the deal. When negotiating, it’s easy to forget that our counterparts have feelings, opinions, values, and unique backgrounds that contribute to what they do and say during talks. When misunderstandings and conflict arise in negotiation, we need to deal with the “people problem” directly rather than trying to gloss over it with concessions. Strive to imagine the situation from your counterpart’s viewpoint. If someone is refusing to back down from a hardline position, ask them how they think things are going. Exploring each side’s perceptions openly and avoiding the tendency to blame are key negotiation skills.

2. Focus on interests, not positions. We tend to begin our negotiation by stating our positions. A farm tenant may start out by stating, “This rent is too high”. When we stake out firm positions, we set ourselves up for impasse. In our goal of getting to yes, we need to draw out the interests underlying our counterpart’s positions by asking questions, such as; “how do you feel the weed control is looking on your land—or the drainage, or erosion control’? By identifying what interests are motivating the other party, and sharing your own interests, you can open up opportunities to explore tradeoffs across issues and increase your odds of getting to yes.

3. Learn to manage emotions. Be sure that you and your counterpart have ample opportunities to express and discuss any strong emotions related to your negotiation. Allowing one another to speak your mind will benefit both sides. When you know that you will have your turn to express how you’re feeling, it will be easier for you to listen when your counterpart has his turn. A landlord may have strong feelings about the care and upkeep of their farm, the economy or their financial situation-for instance.

4. Express appreciation. Expressing appreciation can be a means of breaking through impasse. “No one likes to feel unappreciated, and this is particularly true in a negotiation,” Express appreciation by working to understand the other’s perspective, seeking merit in that perspective, and communicating understanding through words and actions—all critical negotiation skills.

5. Escape the cycle of action and reaction. “If the other side announces a firm position, you may be tempted to criticize and reject it. If they criticize your proposal, you may be tempted to defend it and dig yourself in . . . if they push you hard, you will tend to push back.” To head off this vicious cycle, avoid escalation by refusing to react. Instead, channel your resistance into more productive negotiation strategies, such as “exploring interests, inventing options for mutual gain, and searching for independent standards.”

Incorporating these methods into your negotiation tool kit could prove very helpful in your negotiations during these tight economic times in agriculture. They may not bear fruit in every case but, if they help in just a few situations it could add up across multiple landlords, suppliers and markets you sell to. Experiment and give some of these techniques a try.

Source: Harvard Law School Daily Blog, Six Guidelines for “Getting to Yes”, Katie Shonk, Oct. 2015

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