Diversifying Agribusiness:
A Case Study
The media is full of headlines painting agriculture as the master of all evil and one of the biggest contributors to climate change. Sure, a lot needs to be done to reduce the impact of farming across the globe, but have you ever thought about how the changing climate effects farmers and their livelihoods?
Australian farmers are in a unique position where they see the changes in the land and climate first hand every. Single. Day. The way most agribusiness operates also means that severe climate events can have a devastating effect. There are a myriad of different ways we could look at changing the system to mitigate both the risk of these events ocurring and the effects this can have on farms. For now, though, let’s look at a (made up) example of the latter.
Victorian farmer, let’s call him John, runs a mixed sheep, beef, and broadacre operation in East Gippsland. In the last 2 decades that John has owned this property, he has noticed wetter winters and drier, longer, hotter summers, with increased risk of both flood and fire throughout the year. After the Black Summer fires in 2019-20, he lost around 80% of his stock and the majority of his farm infrastructure, and as a result, years of income while this is rebuilt.
But it didn’t end there. After the fires, much of Gippsland experienced major flooding… and then more fires. You might remember that at one point most of the country was either set alight or under water.
Thankfully, John is an optimist and saw this as an opportunity to make changes in his business model and reduce the possibility of loosing his income for extended periods.
Protecting assets is #1. As well as the usual clean ups and evacuation plans that are necessary for living in such regions, assessing the property’s geography and creating fire breaks, planting more natives, and ensuring top soil is covered in a variety of different plants can do a bit to help stop the devastation of these events.
Now let’s talk about diversifying.
Gippsland is a tourism hotspot and agritourism is a growing sector, expected to be worth about AU$18.6 billion by 2030 according to CSIRO. Being close to the coast, John has an opportunity to tap into this by providing accommodation in the form of campsites and pre-fabricated cabins with little financial outlay in the beginning, but high income in the near future.
With all those Melbourne foodies heading to the coast for summer vacays, and John already providing the accommodation for them, another opportunity arises for farm tours. People are seemingly wanting to get closer to their food and understand how it’s made or grown, and even more are wanting to support local, so people are jumping at the chance to step foot on a farm and see what really happens behind the gate. Farm tours can operate in a range of ways, and while a paddock-to-plate experience might not be viable to John right now, his 7-seater 4 wheel drive will suffice as a vehicle to show these city folk how their wool, beef, and grain is grown. Plus, all these improvements for climate mitigation are a great talking point!
If you sat down to brainstorm, there are so many more possibilities for risk mitigation and business model change, depending on each business, the location, assets, and the individual’s skills and interests, however there’s one more thing for John to implement. His farm is one of the larger ones in the region, and as a result of this and his mixed operations, John is the proud owner of a lot of different machinery and equipment. Some of his smaller farm neighbours, especially the growing number of first generation farmers who have limited funds to get going, need this same equipment too. If you haven’t guessed by now, John has a fantastic opportunity to lease out some of the equipment when it’s not in use. This won’t work well for all machinery, particularly during harvest, but others could.
Not all of these new changes to John’s farm are completely climate proof (yet), they won’t happen overnight, or address all the threats to agribusiness in the region (feral animals and labour shortages are topics on their own). But what this allows him to do is diversify his income streams so in the event of a climate disaster, income can, in most cases, begin to return swiftly, rather than being stuck with unfulfilled contracts, no income, and no money to purchase the necessary inputs. It gives his business outreach and has the potential to make him a leading educator for farmers and non-farmers alike.
Sources:
Agritourism (2021) Australian food and agribusiness. https://research.csiro.au/foodag/premium-interactions/experiences-and-tourism/
East Gippsland (no date) Climate Change | East Gippsland Regional Catchment Strategy. https://eastgippsland.rcs.vic.gov.au/climate-change/
Evans, M. (2021) Soil: The incredible story of what keeps the Earth, and US, healthy. Crows Nest, N.S.W.: Murdoch Books.
Harris, C. and Turner, G. (2014) East Gippsland Overview, EverGraze More livestock from perennials. https://www.evergraze.com.au/library-content/east-gippsland-overview/index.html
Harvey, N. (2022) Farm: The making of a climate activist. Le Scribe.
Reeves, J. and Morgan, D. (2020) A changed climate. A changing region?, Gippslandia. https://gippslandia.com.au/articles/a-changed-climate-a-changing-region
Steffensen, V. (2020) Fire country: How indigenous fire management could help save Australia. South Yarra: Explore Australia.
Turnbull, T. (2023) ‘Australian towns battle fire and flood back-to-back’, BBC News Sydney, 4 October. https://www.bbc.com/news/world-australia-66946013