Farmer Focus: Farms must become ‘investment-ready’

I recently attended an investment in agriculture meeting in which a broad range of agribusiness professionals and farmers discussed the opportunities in Western Australia for further investment.

Going into the meeting I thought the main discussion would focus on how to attract investment. As it turned out the money is already here, it just can’t find anything that is investment ready.

Lack of business skills within family farms is going to be one of the biggest hurdles to increasing profits over the next 20 years.

It could just be that the best agronomic farmers could be the worst performers due to poor or uneducated decision making.

See also: Read more from our Arable Farmer Focus writers

Worse still, many could enter business relationships that require a level of governance far higher than that needed in a family business and leave the farm exposed.

Lack of the understanding of core governance principles became very evident in the recent attempt to look at corporatising our local grain storage and handling co-operative.

From listening to the radio, reading letters to the editor and monitoring social media I would guess 90% of the farmers responding had little or no idea of even the most basic corporate governance principles.

I’ve been a practicing company director for more than 14 years and every time I leave the boardroom I’ve picked up a new skill.

Everything from monitoring and measuring risk, strategic thinking through to sound decision-making processes.

The skills I’ve picked up overseeing other businesses have been invaluable within my own and in many ways heighten the frustration I feel towards agriculture in general and its inability to see the big picture.

In the past we have abdicated the decision-making responsibility to a small group of farmers and, over time, this created an agri-political power than has overseen most industry decisions.

When there were about 9,000 farmers it made sense, but with fewer than 1,500 commercial farming business the time has come for the individual to take responsibility for there own strategy and direction.

For West Australian agriculture to advance the business skill set of those in it’s employ must improve to be investment ready.

Rob Warburton farms 3,000ha with his wife Jen and two daughters in Kojonup, south of Perth, in Western Australia. Cropping includes wheat, barley and oilseed rape. Wildflower seed is grown for retail. Merino sheep are reared for wool and meat.