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Research from Commonwealth Bank shows that Australian farmers continue to seek the wisdom of their parents when learning how to run their farm businesses, even as the sector becomes more complex and globalised.
The research, part of Commonwealth Bank’s bi-annual Agri Insights survey, finds 70 per cent of Australian farmers first learned about managing an agribusiness from their parents.
Geoff Wearne, Executive General Manager Regional and Agribusiness Banking, Commonwealth Bank, says the survey results reflect the unique generational structure of the industry and highlight the value that experienced farmers bring to the sector.
“The handing down of farm business knowledge remains critical to Australia’s agribusiness sector,” Geoff said.
“This intergenerational link is very strong and is a trait not seen to this extent across other business sectors. Our research has shown that parents are key first teachers of farm business across all states and commodity types.”
When asked about the agribusiness topics they see as most complicated to understand 41 per cent of survey respondents said risk management, while 22 per cent said financial markets and 15 per cent referred to e-commerce.
“Managing risk is a crucial part of agribusiness, but there are so many variables to consider. Strategies around foreign exchange risk, interest rate risk and commodity price risk can be very complex to understand,” Geoff said.
“Many farmers see the value in developing a deeper understanding of these topics because they can have a direct impact on their profitability and sustainability.”
When it comes to essential financial management skills, the research shows farmers have their eyes on the bottom line, with budgeting and cash flow management among the most important financial skills identified.
“Farmers recognise that setting budgets and managing cash flow is a vital part of successful business and the foundation on which more sophisticated business management strategies need to be built,” Geoff said.
Overall, 48 per cent of surveyed farmers say budgeting is important, while 41 per cent say cash flow management is important. Other essential financial management skills identified by survey respondents include strategic planning, risk management and understanding all aspects of technology.
The latest survey shows farmers continue to have positive intentions around plant and equipment, fixed infrastructure and technology. Cotton, beef, sugar and dairy producers are the most likely to be planning to scale up their operations in the next 12 months.
“There is a continuing trend to increase investment not only in farm essentials like infrastructure but in innovation and updating technology. It is a very encouraging signal that the Australian agribusiness sector continues to focus on driving efficiencies in their businesses to capitalise on market conditions in their sector,” Geoff said.
Agri Insights surveys 1,600 farmers in relation to 14 areas of farm business operation, including physical, financial and people components.
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Notes to editors:
About the Commonwealth Bank Agri Insights report:
For more details about Agri Insights, see the full report here.