Grains Research and Development

Date: 01.04.2003

Vision: the strongest link in the chain By KAY ANSELL

TO CONSTRUCT A VALUE chain from scratch, it helps to have a grower with Kennedy-style leadership qualities. A visionary who, when others ask 'why?', will answer with 'why not?'.

Equipped with entrepreneurial initiative, such leaders are the drivers of value chains at their foundation. They achieve the seemingly impossible because their strategy is to stretch beyond the conventional boundaries.

A GRDC-commissioned report by the University of Ballarat highlighted this common thread in value chain creation. Of the case studies examined, co-author Professor Julian Lowe says: "There always seemed to be some guy who said, 'This is the way to go'. Those leaders or entrepreneurs had a vision that no bureaucrat or academic or anybody else can really have because they truly understand their current industry and have a feel for where it's going."

Professor Lowe cites Wimmera Grain Company CEO David Matthews as one such leader. "He was driven by a need to rescue some of these local communities and his own business from a slow decline. But he also had a vision as to what can be achieved."

Capturing Value in the Grains Value Chain, co-authored by Nicki Berrisford and John Griffith, also examines structural drivers of value chains, including technological change and increased competition that accompanies deregulation of markets and globalisation.

In Australia, as overseas, growers are rising to these challenges by collaborating, sometimes as a cooperative but increasingly through a joint venture or new business that can orchestrate activities in the value chain.

These new business groupings, participating in all kinds of ways in the value chain, are critically important, he says, because they enable growers to operate on a scale and with a scope that generates some of the value that would normally only be captured by larger operators.

Grower networks operating informally to share practical knowledge are also valuable participants in the value chains, he says.

A desire to harness innovation in a more organised way was behind the success of the Birchip Group, the subject of another case study. Frustrated by conflicting information from experts, growers started their own demonstration trial site. A decade later, they employ seven staff and keep 7000 growers up to date with the latest research.

For growers who want to extend value chains beyond the farm gate, Professor Lowe advises taking short jumps rather than long jumps that involve major operational and financial moves.

He says that while long jumps and becoming involved in off-farm activities such as packaging and marketing are helping some growers capture more value, these changes require very different resources and skills.

He says significant gains can still be made through short jumps, such as cooperating with others to achieve results like better sorting, bagging and distribution.

The main need, he says, is to get closer to end users, in terms of understanding their emerging needs.