Agribusiness Perspectives Papers 2000

An Exploration Of The Use Of The Balanced Scorecard Approach To Achieve Better Farm Business Planning And Control

Shadbolt N.M. and Rawlings K.M.
College of Sciences, Massey University, Palmerston North, New Zealand
Paper 32, 15 February 2000

Abstract
The family farm is a complex business due to the intimate interaction between business and lifestyle goals. It is important to select and monitor a group of relevant, or key, performance indicators (KPIs) that can be used to measure how well the business is performing. Performance indicators must link to the goals of the farm business. No one measure can be used to assess how well the business has achieved it's various, and sometimes conflicting, goals. The aim of this study was to identify whether dairyfarmers have adequate performance indicators to measure progress towards goals and to explore how well dairyfarmers formally or systematically resolve and manage goal conflict by testing their goals against a ‘balanced scorecard' framework adapted from business literature.

Direct Supply Relationships with Japanese Consumer Co-operatives - A Market Opportunity

Rick Ada
Principal Agricultural Economist
Paper 33, 29 March 2000

Abstract
Japanese consumer co-operatives are the largest food retailers in Japan representing more than 25 per cent of Japanese households, with a membership of over 20 million. The co-operatives have established direct supply relationships with fresh food producers as a means of ensuring product safety and freshness for their customers. Known as sanchoku, this direct supply is characterised by supply chain relationships that encourage close contact between producers and consumers.
This paper outlines research conducted into the consumer co-operative movement and the requirements to access this large and growing market. It concludes that the co-operatives represent a significant opportunity for Australian food exporters to provide a differentiated product to the Japanese market. The results of case studies of two Australian producer groups, firms that have used the research results to gain market entry to the co-operatives, are highlighted and generalisations are made regarding the necessary considerations for producers wishing to export to Japanese co-ops.

Perspectives for Decision Support Systems - Irrigated Dairy Production in the Murray region.

Oliver Gyles, Cynthia Mahoney, Stuart Brown and Ian Gibb.
Paper 34, 29 March 2000

Abstract
Consultation with industry identified a range of knowledge and information management tools required for building decision support systems (DSSs) that can help guide sustainable development of irrigated dairy production in the Murray Region. Individual production systems vary in complexity and input intensity and are coupled with the unique business and lifestyle goals of farm families. While single issue focussed decision support tools are limited to promoting understanding of single factor responses, the relevant opportunity costs for resources must be considered. Thus a whole farm perspective for DSSs is required to assist farm business managers optimise the profitability of production and development given the range of technical options, market conditions, environmental constraints, personal aspirations and family goals prevailing on that farm. The research, development and decision support needs elicited from producers using low, medium and high input production systems reflected both the necessity to optimise management of current systems and concerns regarding likely expansion paths for viable businesses.

Factors Influencing Food Demand: Survey Evidence from Japan

Ruth Stroppiana and Paul Riethmuller
Department of Economics, The University of Queensland, Brisbane. Queensland.
Paper 35, 29 March 2000

Abstract
Japan has had a long history of protection and a reputation as having a difficult food import market to penetrate. However, with the elimination of import restrictions and other measures since 1988 on foods like dairy products, beef and citrus, Japan has become a much more open agricultural market. The competition to supply this market has intensified. The purpose of this paper is to report the results of a 1997 survey of Japanese firms involved in the food industry in Fukuoka prefecture. The main objective of this survey was to obtain information on the factors that firms involved in the Japanese food industry believe influence the food purchasing decisions of Japanese consumers.

Meat sensory panels to monitor effects on eating quality of changes to production and processing systems

Williams, Hannah - PhD student, Curtin University of Technology.
Storer, Christine – Agribusiness Lecturer,
McEntyre, Eric – Lecturer Curtin University of Technology &
McIntyre, Brian – Senior research officer, Agriculture Western Australia.
Paper 36, 31 March 2000

Abstract
Australians are among the world's highest consumers of meat products, yet consumption of red meat is declining, despite access to high quality red meat . These declines have been equated with the changing lifestyle of Australian consumers, and concerns in the community over health issues . The greatest impact has been felt in the sheep meat industry as consumers turn to alternative protein sources such as chicken. Research has identified the characteristics most important to Perth consumers when purchasing meat as tenderness, freshness, taste, good reliable quality, low fat, flavour, and health benefits.

Institutions and Policy Analysis

Robin Johnson
Retired Consultant, Wellington, New Zealand.
Paper 37, May 4th, 2000

Abstract
Institutional analysis is associated with the work of Buchanan, North and Williamson. It lays stress on the constitutional arrangements for the conduct of commerce and property rights. Institutional analysis focuses on transaction costs and their effect on organisational efficiency. In recent years, the work of Dixit and Horn has drawn attention to the potential in policy making and bureaucratic organisations for such an approach. This paper reviews the work of these authors in this area and outlines its application to a strong feature of the Australian and New Zealand economies - commodity marketing boards. It is suggested that marketing boards are a form of semi-government organisation that minimise certain transaction costs that would otherwise have to be carried by central government. It is pointed out that the particular form of organisation legislated for both in Australia and New Zealand transfers the significant cost of monitoring the activities of such boards to the producers themselves with consequent weakening of any control relationship with the legislature which created them.

The Northern Myth revisited: A resource economics research response to renewed interest in the agricultural development of the Kimberley region

Romy Greiner and Andrew K.L. Johnson
CSIRO Tropical Agriculture,
Davies Laboratory Townsville.
Paper 37, May 11th, 2000

Abstract
The proposal for a 64,000 hectare expansion of the Ord River Irrigation Area is one example of the renewed interest in agricultural development in the tropical north of the Australian continent. Thirty five years ago Bruce Davidson provided conclusive ‘evidence' that agricultural development in this region was not financially sustainable unless supported by ongoing government subsidies. He argued that this conclusion was unlikely to change in the future. This paper outlines the controversy over past and proposed agricultural developments and explains the role of agriculture in the Kimberley economy today and in relation to other natural resource based industries.
In a time when the paradigm of sustainable development recognises ‘quality of life' and ‘equity' as major objectives of development, positive benefit-cost ratios are reduced to being a necessary but not the only sufficient factor in development decisions. The trend towards regional governance provides regional communities with both the opportunity for and difficult task of managing their natural resources sustainably into the future.
The Ord-Bonaparte Program, a 5-year interdisciplinary multi-agency R&D program, is designed to support regional governance in the East Kimberley region. Its objectives are to provide relevant data and understanding, and build capacity particularly with indigenous stakeholders. Applied economic research, within an ecological economics framework, plays a critical role within the Program. The paper suggests a range of analytical methods and applications that would make significant contributions to the Program.

Best Practice Benchmarking in Australian Agriculture: Issues and Challenges

Glenn Ronan, Principal Economics Consultant, Livestock Industries, Primary Industries & Resources SA and
Gordon Cleary, Managing Director, FarmStats Australia Pty Ltd
Paper 39, August 8th, 2000

Abstract
In an effort to enhance the viability and competitiveness of its farmers, Australian agriculture is allocating substantial resources to development and extension of comparative business analysis programs in the major agricultural and horticultural industries. Despite exhibiting significant differences in approach, activities, outputs and outcomes, many of these programs purport to be based on ‘benchmarking', an activity-based analytical method having its roots in the US manufacturing industry.
While ‘benchmarking' is receiving strong support from rural funding bodies, the methodology used in some programs has been likened to comparative analysis, popular with private consulting, government extension services and farmer groups in the 1960s. Some agricultural economists have criticised comparative analysis as ‘random numbers' and are now criticising ‘benchmarking' as ‘rampant empiricism'.
This paper examines this long-running debate. The authors agree with advocates of benchmarking that it can be a valuable source of information about farm operations and their associated supply chains. They also agree with critics that much of what is currently called ‘benchmarking' is difficult to distinguish from comparative analysis, lacks systemic linkage to underlying enterprise processes and drivers of competitiveness and is of limited diagnostic power at farm, supply chain and industry levels.

Grower Funding of Cotton Promotion Increased Market Share - Implications for Woolgrowers

Kym Butler
Senior Biometrician, Agriculture Victoria, The Joint Facility of Food Animal Research in Werribee, Victoria.
Paper 40, November 8th, 2000

Abstract
As noted by the Future Direction's Wool Taskforce (McLachlan 1999), consumer marketing and promotion of wool products is important. It is essential for maintaining high consumer demand for a product.
As the Taskforce notes (chapter 6.11 of main report), “It is more a question of who should be responsible (for promotion) – retailers and brand owners, or woolgrowers via compulsory levies.” It is hard to disagree that this is a fundamental issue.
Several authors (Watson 1998, Piggott 1998, Beare 1998) have pointed out the following. Grower funding of wool marketing and promotion is only appropriate if the net benefit to woolgrowers of consumer marketing and promotion in the presence of grower funding is sufficiently greater than the net benefit of consumer marketing and promotion that would have occurred with no grower levy funding.