Farmers of the future master business with MBA in agriculture Agribusiness

Wednesday, 01 September 2004


    The nation’s leading primary producers are turning to an innovative executive development program to take their businesses into the future.  Farmers of the future master business with 'MBA' in agriculture.

    The nation's leading primary producers are turning to an innovative executive development program to take their businesses into the future.

    In late September, 42 of Australasia's most progressive business managers will converge on a Sydney training centre to attend a cutting-edge executive development program.

    In an intensive, week-long residential course - the first module in a program that will ultimately spread over two years - they will be exposed to the latest thinking in business management, strategic planning, leadership and human resources practices, financial analysis, marketing and value chain management.

    But those attending wont be your typical business types. Nor indeed is the program a conventional management development course.

    The participants are all farmers or agricultural producers and the course they are attending is the Rabobank Executive Development Program for Primary Producers, one of the few executive development programs in the world specifically for rural producers.

    Established in 1999 as a joint initiative by Rabobank, the world's leading agribusiness bank and a major lender to rural Australia, and the University of Queensland, the EDPPP (as it is known) is akin to a condensed MBA, aimed squarely at the rural sector's progressive and highly-professional operators.

    "These people are the future face of agriculture," says Neil Dobbin, Rabobank's head of rural banking.

    "Whether they have large-scale cattle properties or boutique wineries, they all run extremely successful, progressive operations and they approach farming and rural enterprise as a serious highly-professionalised business, which is exactly what it is and will increasingly become.

    "They recognise that for their operations to continue to develop and succeed in an increasingly competitive environment, they need to apply the same types of professional business skills and disciplines that are used in the corporate world."

    Tremendous changes

    The EDPPP's academic director, Professor Tony Dunne, agrees, saying there has been a professional revolution in farming over the past 10 years, the result of tremendous changes in the industry.

    "Commodity markets have been deregulated, our traditional domestic and export markets are becoming much more competitive," he says. "Today farming operations are being run along corporate lines and that would not have happened 10 years ago."

    The number of commercial farms in Australia has halved in the past 40 years, with the remaining farms increasing in size by nearly 50 per cent.

    Dunne, who teaches agribusiness at the University of Queensland, says farm operators have needed to adapt to the industry's changing environment.

    "Farmers cannot treat their farm as a lifestyle any more, but as a business," he says. "Our farm leaders need to combine excellence in technical

    performance with superior market intelligence and business management."

    And that, says Neil Dobbin, is where the EDPPP comes in.

    Up-skilling management abilities

    "As farming has become bigger, more sophisticated and more competitive, primary producers have really needed to up-skill and hone their management abilities - in particular, human resource management, planning and negotiation skills," he says.

    "The problem of course is that farming, by nature, is often an isolated business and there are very limited opportunities for primary producers to develop their business skills

    "The EDPPP has answered a huge need in this area. And in doing so, we believe, the program

    has had the added benefit of increasing the level of professionalism and innovation in Australian and New Zealand agriculture."

    The EDPPP - which is operated with the support of Landmark, Australia's largest supplier of agribusiness products and services - covers a range of cutting-edge business management strategies and looks at how these can be applied to farm businesses.

    Originally modeled on a similar course run by A&M University in Texas, the program is divided into two week-long residential modules, which are held approximately nine months apart.

    The course, says Dobbin, is a challenging mix of commercial and theoretical presentations from business, industry and academic experts, along with case studies and interactive sessions.

    The informal networking opportunity provided by the program is also highly valued by those who attend.

    After the first module, participants spend the next nine months working on a management project which is completed for module two.

    In the second module, the program covers topics including negotiation skills, risk management, industry trends and succession planning.

    This year, sessions on environmental management and business innovation have been added.

    Tony Dunne says the course design is constantly evolving to keep pace with the changing face of the industry.

    "These days farmers want the skills to deal with human resource management and labour management issues. Whereas, when we started the course, it was more about wanting to know how to manage a business and its financials," he says.

    The EDPPP program is also carefully designed to ensure it is academically sound and meets the university's requirements for the Master of Agribusiness course. Successful EDPPP graduates receive two course-credits towards the Master's program at the University of Queensland.

    With numbers currently limited to 42 participants from across Australia and New Zealand at each EDPPP intake, the high demand and calibre of applicants ensures competition to secure places can be fierce.

    "Participants are specifically chosen from a diverse range of backgrounds, geographical regions and agricultural operations - but all must be innovators or commercial leaders in their fields," says Dobbin.

    To date, almost 200 primary producers have graduated from the Rabobank program, many going on to implement significant improvements to their already successful operations as a result of the course.

    Vital investment

    EDPPP graduate Brendon Smart, who operates a mixed farming enterprise in South Australia, says the course has been a vital investment in his business future.

    Smart, who is also chairman of the Australian Nuffield Farming Scholars Association, says there is now only one area where leading farmers can gain a competitive advantage - in developing their business structure to run an efficient operation.

    "Twenty years ago it was easier to be in the top 10 to 20 per cent of farmers," he says. "Now it is not so easy. Production is so level, as long as you have some affinity for the need to be on time and efficiency with machinery, it is easy to employ all the right expertise and advice."

    Smart says the program reinforces good practices in the three important areas of farm business - input supply, running the business and looking beyond the farm-gate to market to the consumer.

    "Few businesses do all three well," he says. "Between 70 and 80 per cent of a farm's gross income is consumed by supplies and 100 per cent of the farm income received is affected by their market at the other end.

    "Many farmers will bargain hard to reduce the cost of inputs such as machinery, but then don't negotiate in marketing their product."

    Rabobank Australia is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 100 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness

    Field students assist with nsw water management

    Water management is high on the agenda for University of Canberra's Resource and Environmental Science Department, which has been commissioned by the NSW Department of Infrastructure, Planning and Natural Resources (DIPNR) to research water management issues in the Cudgegong River near Mudgee, NSW.

    Martin Thoms, Associate Professor in Resource and Environmental Science heads the project, which utilises the help of second-year applied science students studying catchment processes. The project is incorporated into the course as a practical component of their degree, with students spending a week surveying a stretch of river between Windamere and Burrendong Dams.

    Thoms, and university colleague Richard Norris from the UC Cooperative Research Centre for Fresh Water Ecology, undertook a study of the river for DIPNR in 2003 after the local community expressed concern about the transfer of water between the two dams, and how it would affect the area.

    DIPNR then commissioned the University of Canberra to monitor the river, which is an important arm of the Macquarie River, and collect data to be used for future policy decisions.

    Thoms sees the project as a win-win situation for the students and DIPNR. The students gather a variety of information on the size and shape of the river channel, vegetation, and aquatic life, which is then collated for a scientific report used by the Department as part of an ongoing monitoring program. Based on the results of the data DIPNR monitor the transfer of water from dam to dam, changing the flow release to ensure the best environmental outcome.

    Peter Liston from Environment ACT thinks "it's a terrific exchange and works really well."

    "It's useful to see the science behind what we need to make policy decisions," he says.

    The field trips, which have been running for two years are sponsored by DIPNR. Thoms says the trip is run cost-neutral to the university, and the data collected by the students contributes to government policy on water management.

    "DIPNR pays for everything - travel, accommodation, and they provide two tutors, which means the staff to student ratio is as low as four or five students per tutor," he says.

    Thoms believes that this type of collaborative project is vital to the training of Australia's environmental mangers of the future by providing invaluable practical experience for the students.

    "The students get to work on an actual problem facing the water industry at the moment. They get that real world experience, and see science having a role in management and also how science helps the community as well," he says.

    "A lot of our students get jobs straight away in the water industry - not just because they're good scientists but because of their experience in some cutting edge science, management and policy issues, and they've been exposed to all sorts of people."

    While funding for the project has been approved for 2004, Thoms is hopeful the government grant continues in years to come.

    "If we do a good job I think the work will continue. It's a great field laboratory. You can't do everything in a simulated suite. You have to get out there and get your hands dirty," he says.

    Strength lies in its diversity

    The flexibility to meet the changing demands of a tough and unpredictable rural market has strengthened Ruralco Holdings Limited's reputation as one of Australia's leading agribusinesses.

    With group income up 11 percent on the same period last year and a 122 percent increase in profit compared to the first six months of last year, Ruralco's strategy of strength through diversification is on target and delivering results.

    Ruralco's rural merchandising division continues to set the standard and with turnover close to $500 million, and almost 400 stores trading under the CRT or Town and Country banners, it is the largest and most progressive group of independent rural merchandisers in Australia.

    A series of strategic acquisitions and the introduction of several new divisions outside Ruralco's core merchandising business has opened up a number of exciting new markets and opportunities for the group.

    CRT Real Estate is set to become a real force in rural real estate. Members have written $170 million in sales over the last 12 months which is a very good result, as is the 33 percent increase in new members over the last year - both within CRT and non-aligned independents.

    The development of an independent livestock member network under the CRT banner has been eagerly anticipated. CRT Livestock will be rolled out nationally over the next 24 months and the 2002 acquisition of respected market leader, Rodwells & Co, gives a good foundation and strength to this group.

    Grow Force, Ruralco's fertiliser division, performed well over the last 12 months with a 34 percent increase in revenue. The recent acquisition of Terra Firma Fertilisers will further help expand the group's fertiliser offering and complement a range of unique organic fertilisers designed for domestic and commercial gardens.

    Ruralco's vision for the future is clear and its ability to deliver continues to attract investors keen to maximise returns from one of Australia's most dynamic agribusinesses.


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