Big hats and sunsets

I was speaking with a great mate today - we've been best of mates since the first day we met in the main street of Horsham having fish and chips - funny how you remember events!

We are both from farming backgrounds and both have our own businesses - I guess now both of us are closer to 40 than 30 some big questions start to pop up.......

• Is there a better way to do things?
• Should we be expanding, standing still or selling assets to invest off farm?
• Is there really a viable future in our current businesses?
• Is mother nature really an Al Qaeda terrorist?
• Finance, finance and finance - how to finance when the banks arent keeping up with changes
• And of course structure, outside participation and working together

We both came pretty quickly decided that our futures lie in the farming game but for us both to remain a lot of things need to change and it got me to thinking if other people are thinking the same way.....

1) Expansion. 
This is not negotiable, every year our base line figure for growth needs to be 15%, this is a big ask but it means some buffering against the declining terms of trade and the shrinking value of a dollar
2) Finance. 
Plain and simply Australian mainstream banks are still stuck in the 1960's. Structural finance for agriculture is in the dark ages. The idea that farmers rely on land to borrow against in the whole is completely ridiculous and is slowing growth of farming businesses massively
3) Value adding. 
Ive always been pretty convinced Im a low cost commodity producer and thats where things should lay - over the last few months starting a meat brand  (www.certifieddorperlamb.com) has started opening up a whole new world to me and I now firmly believe where appropriate and cost effective value adding of product  through the chain closer to the consumer will continue to grow as part of our business
4) Contractual Production/Intellectual Property.
 Its works for Monsanto doesnt it? Perhaps our farming businesses now need to look at 'owning a production system' and utilising in house IP to ramp up production through third party providers. The pork and chook industries have this sussed out and I reckon a lot of cattle and sheep producers should research this further
5) Think like a corporate and not like a family business. 
Its time we realised we are in control of multi million dollar businesses and we need to act like it - if not a board of directors then a board of management is required to keep farming businesses growing.

Ive been reading a lot lately about some of the growth in agriculture in South America with the likes of El-Tejar, Los Grobos and Maggi Group to name a few - these are businesses build on leasing land, modern principles that work in every retail business around.....except Australian agriculture it would seem.
The South American agribusiness powerhouses are growing at a massive rate with Los Grobos now farming around 630,000 acres with a variety of crops - there is no reason similar style businesses shouldnt be happening in Australia.....that is unless you want to finance them from an Australian bank!

So there you have it for some afternoon thoughts - agriculture isn't all about big hats and sunsets, theres some serious decisions which will shape our future being discussed at a lot of kitchen tables!!

Oh year.......and then theres carbon farming but thats a whole different story!!!