Mastering Negotiation in Farm Business

Like growing a crop or breeding livestock, the most important part of a negotiation often takes place well before you sit at the table.  It starts with becoming clear on what you want but also importantly, understanding the other party – in terms of how they think, what they want and what drives them.

So how can we approach our next negotiation more strategically? In this thought leadership column, we share insights from Dr Robin Stonecash, who has worked with farmers for close to two decades through the Rabo agri Executive Development Program, to help negotiate with confidence.

1. Put yourself in the other player’s shoes
   Think of it like looking at the world through their eyes. When you understand who you are dealing with – what they want and what they need – you are much more likely, Robin says, to offer them something they will accept.
   
2. Look forward and reason backwards
   Like a chess player, negotiation isn’t just about your next move, it’s about thinking several moves ahead. Look to the end of the negotiation and ask: If I want to end up there, do I need to make another move at the outset?

BATNA: Determine your Best Alternative To A Negotiated Agreement – your fall-back option.

For example, if you are trying to buy the neighbours farm and they don’t want to sell, what is your next best option?

Tip: Never agree to anything less than what you’d get if you simply walked away.

Reservation Price: Determine the minimum you would accept and your aspiration level (i.e. the maximum you could hope for). This sets your bargaining zone.

Tip: If you only focus on your minimum, you are more likely to settle close to it. But if you strive for your aspiration level you are more likely to get a better outcome.

With much of the negotiation taking place before you get to the table and preparation key, Robin uses the GATE framework to help plan for negotiations. With GATE standing for: 

1. Goals: What do you really want?
2. Assumptions: What are your assumptions about the other party?
3. Trade-Offs: What can you give up to gain something of value to you? It doesn’t have to be monetary.
4. Emotions: Don’t ignore or deny them. Instead, identify and influence them in yourself and the other party. 

Anchor the negotiation: Think of your first offer as an anchor. It sets one side of the bargaining zone, so think carefully about where you want to begin the negotiation.

“If you don’t give your counterparty any information, you can’t negotiate. You need to give them something in order to get something in return.”

Ask, listen, pause: One of your best tools in a negotiation is the open-ended question. Not only can it help draw out information, but it can also build trust by creating space for the other person to talk and exchange information. It is also all about active listening and feeding back what you have heard by paraphrasing or checking you have understood what they are saying.

“Information in negotiation is gold. Don’t underestimate the power of the pause here, as most people feel the need to fill it.”

It’s not all about “yes”: While we try to get to the “yes” in a negotiation, getting to the yes isn’t always all it is cracked up to be. If your counterparty says yes too quickly, it might be that they want you to go away. But if they say “no,” you can ask why. Why did you say no? Think of it as opening the door to continue the negotiation.

“The two magic words in negotiation can be “that’s right.” When your counterparty says that, it means you have hit on something that is important to them, and you can then begin to explore what you have in common.” 

As it is important to be really clear about what you want before you get to the table, consider practising or roleplaying your negotiation so it feels natural. Because when you step into a negotiation, you are stepping into a different role. It is still you, but you are wearing a different hat. And that takes preparation, strategy and an understanding of the other person to get towards that handshake.