WithTheGrain: Grain farming families commence strategic review
Author: Rachael Oxborrow | Date: 09 Apr 2018
Grain farming families across South Australia are being assisted as business owners in a new initiative for the industry.
The GRDC has invested with Grain Producers SA (GPSA) and Primary Industries and Regions SA (PIRSA) to enable Rural Business Support (RBS) to pilot the Farm Business Strategic Review with the grains industry in SA.
Funding was allocated to provide places for 35 families, giving them access to $7500 worth of professional business training for a registration fee of $500. The initial call for registrations met with a strong response and it is expected 40 families will participate.
RBS developed the Farm Business Strategic Review to help family businesses better understand their strategic position, analyse their financial status and identify opportunities to improve productivity and profitability.
RBS Business Development Manager Nigel Robinson says the reality of the agricultural industry is a majority of operations are run as a traditional family business.
“There’s over 100,000 farming families in Australia and while 5000 have become agribusinesses with formal management processes, the other 95,000 are traditional family businesses that are flat out farming using informal management processes.” he says.
“If they keep doing this year what they did last year while costs and prices have changed, their long term viability may be at risk.
“The program assists family businesses to step back and look at the big picture, recognise how the physical and financial benchmarks are changing, how banks are changing and identify their opportunities as a family.”
The program began in March, with families participating in Strategic Briefings held at Wudinna, Clare and Keith. On-farm meetings with each family follow the initial briefings to assist each family to undertake a strategic review and develop a strategic action plan. New web tools are available as a part of the program to accelerate data collection and display business physical and financial performance relative to the latest benchmarking data developed by GRDC.
So far, 50 family businesses in the dairy industry and 10 family businesses in the pork industry have reviewed their operations with the assistance of RBS.
“The families who have participated have rated the program very highly both economically and emotionally as they reached agreement on a family strategic plan that informed their physical and financial plan for their business and many then committed funds to improve their physical and financial returns,” Mr Robinson says.
“In the first year of the program in 2016, the dairy families as a group committed to invest $3.65 million. In 2017 the group of dairy families committed to $3.3m worth of new investment and the pork families committed to $1.2m to improve their businesses.”
RBS chief executive Brett Smith says Rural Business Support is committed to building the business skills of primary producers and supporting them to plan the future pathway for their family farms.
“Our new web tools help families quickly see where their business is at now, and where it could be in the future factoring in different scenarios,” Mr Smith said.
“This strategic review process enables the family to develop a strategic plan, budget and monthly cash flow, with implementation linked to banks and consultants.
“By supporting families through effective emotional and economic engagement, families develop the clarity, confidence and commitment to act and increase the resilience of their farm business.”
GRDC Senior Regional Manager South Craig Ruchs says that as an investment specifically designed to increase profitability for South Australian grain growers, the program has a good fit with the GRDC’s purpose to invest in RD&E to create enduring profitability for Australian grain growers.
“It is important that growers take the time to frequently review business performance and develop a long-term strategy based on personal circumstance, individual goals and sound financial advice,” Mr Ruchs said.
“The Farm Business Strategic Review provides an exciting opportunity to deliver a more intensive and targeted extension approach to deliver real and measurable practice change on-farm in South Australia.”
Nigel Robinson, Rural Business Support, 08 8364 2577 or 0499 556 488.
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