Grains Strategic Review delivers confidence in financial literacy and optimism about future farm profitability
South Australian grain producers are set to reap long term economic benefits from a new pilot strategic business program, which has helped them improve productivity, profitability and achieve a better work-life balance.
More than 70 per cent of grain farming families involved in the Grains Industry Farm Business Strategic Review program are confident they are now equipped with learnings to increase their farms’ profitability over the next 10 years.
A report by independent economist EconSearch shows almost 90 per cent of grain farming families who completed the pilot program have improved at least one aspect of their financial literacy.
The Grains Industry Farm Business Strategic Review program was developed through a successful partnership involving Rural Business Support (RBS), Grain Producers SA (GPSA), Grains Research Development Corporation (GRDC), Primary Industries and Regions SA (PIRSA) and private sector consultants.
The program engaged 40 grain farming families in South Australia this year. It followed similar pilot programs delivered by RBS to farming families in the dairy and pork sectors between 2016 and 2017.
In its cost benefit analysis EconSearch reports the program has delivered “a strong, positive outcome, driven by significant cost savings and elevated levels of on-farm investment”.
Participants in the program estimated that as a result of the program their combined cost savings would be an estimated $1.9 million and the combined investment in farming businesses an estimated $7.9 million, over the next 10 years.
The program uses a new approach to encourage family farming businesses to step back from day-to-day production issues and focus on the big picture.
Regional group workshops (strategic briefings) were held at Clare, Wudinna and Keith in March, before on farm visits by RBS farm business analysts and private sector consultants. New web tools were used to help families develop a strategic action plan.
Rural Business Support CEO Brett Smith says early engagement is the key to the program’s success in overcoming previous barriers to the adoption of financial literacy programs by farming families.
“It works because we make it a priority to first engage with families emotionally,” Mr Smith said.
“Through Rural Business Support’s experience in delivering the Rural Financial Counselling Service (RFCS), we know the value of meeting with farming families at their kitchen tables. We sit down with them to talk privately and confidentially about their business, in the context of current family circumstances and future plans, before we work with them economically.
“The program helps them to put their figures into perspective – to clearly identify how their business is going, relative to industry benchmarks and what their opportunities are.
“It empowers families to adopt best practice, which in turn enables them to develop preparedness and resilience to deal with demanding adverse circumstances.”
Grain Producers SA Chair Wade Dabinett says that GPSA invested in the pilot program of the Grains Industry FBSR, because it directly aligns with GPSA’s mission to ensure a viable and sustainable grains industry.
“We believe financial literacy is a vital component of achieving viability and sustainability, so we want to help our members to develop a better understanding of their financial and strategic position. This can then support timely decision-making, investment in new technology and systems which in turn will lead to increased profitability,” Mr Dabinett said.
“As South Australian grain producers contend with the poor season conditions, programs aimed at improving financial literacy will be an essential part of any drought support package. The grains pilot demonstrates the value of enterprise-level capacity building, and we commend RBS for responding to this need.”
GRDC Grower Relations Manager – Southern Region Darren Arney says that investments to increase profitability for South Australian grain growers fits 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 Arney said.
PIRSA Executive Director Rural Solutions SA Daniel Casement says it’s outstanding to see such positive outcomes from the program.
“We are proud to support this pilot program that sees real results for grain farmers and their families, especially in improving their financial literacy,” Mr Casement said.
“At the core of every primary industry business is a need for the adoption of the best strategy for success and this program builds the capacity of South Australia’s grain industry to make better day-to-day business decisions.”
The pilot Grains Industry FBSR is the result of a $200,000 commitment through PIRSA, building on a $300,000 commitment to develop the program in dairy in 2015 and 2016. The SA Government’s commitment is being supported by $100,000 from GPSA and $50,000 from GRDC. Each participating family made a $500 contribution.
Contact Brett Smith, Chief Executive Officer, Rural Business Support, on 0412 630 015 or Nigel Robinson, Business Development Manager, Rural Business Support on 0499 556 488.
Click here to add your own text