2007, Volume 10, Paper 72
Expected Public and Private Benefits of Embedding Farm Business Performance Systems in the Australian and New Zealand Dairy Industries
Glenn Ronan – Principal Strategy Consultant, Corporate Strategy and Policy, Primary Industries and Resources, South Australia, GPO Box 1671, Adelaide, SA 5001. Email: Ronan.glenn@saugov.sa.gov.au
Acknowledgements
The paper is an outcome of a PIRSA project involving Corporate Strategy and Policy and Livestock Industries. The project commenced in late 2005 to assist in the procurement of a dairy farm business performance system, its implementation and the interpretation of reported results.
The author is appreciative of the support of Philip Taylor, Industry Strategy and Structure Manager, Corporate Strategy and Policy Branch; Tony Morbey, Principal Industry Consultant – Dairy, and Brian Bartsch, Manager, Livestock Industries, PIRSA.
Livestock Industries Personal Assistant, Dana Nattrass, provided timely help in the formatting of the paper.
Summary
An industry strategic planning process provided the context and drive for PIRSA to seek a dairy farm business performance system to clarify the case for investment, leading to adoption of the Red Sky Agricultural system. A scan in Australia and New Zealand for systems other than the national industry surveys by ABARE and ABS revealed five with an orientation to public posting of regional business performance information: ‘Red Sky’ (South Australia, Western Australia, Tasmania, Victoria and New Zealand),[3] Tasmanian DPIW[4], Victorian DPI Dairy Industry Monitor Farm Project (Victoria)[5], DairyBase (NZ)[6] and MAF Farm Monitor Project (NZ)[7].
Adoption of the systems is driven by demand from a range of industry stakeholders (dairy business managers, industry organizations and governments) for analysis, benchmarking, monitoring, reporting and interpretation of business and industry performance data not satisfied by national farm performance surveys and statistics. Some points of difference between the systems are identified, including content, reporting timeliness and context. Increasing investment by government and industry stakeholders in complementary farm business performance systems and data sets is viewed as an important development, undertaken in expectation of substantial expected benefit, private and public.
The proposition in some Australian agricultural economics and agribusiness literature that farm business benchmarking, without exception or qualification, has no utility appears to be at odds with international business and industry practice. In the absence of a more concerted effort to differentiate and recognize quality farm business performance information systems and processes, including benchmarking, government agencies and industry organizations are open to criticism that they are supporting suspect industry metrics.
Further research to evaluate agri-food sector economic information systems and their benefits is recommended to achieve a position where quality performance analysis systems could be recognized as sound platforms for information critical to industry development and strategic planning and appreciation of internationally competitiveness. Popularity is no sound indicator of quality, but the continuing convergence of public and private clients to some of the business performance systems scanned in this paper adds to the case for evaluation research that looks for wheat and chaff and starts sorting.
Such research would either confirm the prevailing unfavourable and undifferentiated perspective on farm business performance benchmarking in Australia or it may produce an alternative perspective that permits some quality and some utility, consistent with expectations and observations by contributors to this paper. Observation is usually instructive: in most populations not all ‘four legged’s’ are good and not all ‘two legged’s’ are bad!
Four legs good, two legs bad.
Animal Farm, George Orwell
Key words: strategic planning, industry development, benchmarking.
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