Price, weather and management are the three key determinants of agriculture returns. Unfortunately the spread between high and low performing farm returns is still dominated by management differences as shown by ADI research with ROE varying from near 0% to 8-10%. Until greater improvements in management occur the industry will not achieve the goal of better financial stability for more farmers.
ROE is not simply a reflection of management skills. How can you isolate farmer management skills as the dominant factor. A farmer may be dairying under very difficult circumstances such as farm topography, weather, input prices etc, factors beyond control. They may have a lower ROE than another farm but actually be managing extremely well in curcumstances that would put others out of business. Im a little tired of blame being pushed back to the farm gate when frankly the numbers leaving the industry over the last 20 years can't all be bad managers. Having said that, management skills are very important- without any I cant see how any farm survives. But they require time (thin resource for many who are busy doing the chores themselves to save $) or money - to pay someone else to do it
Management skills on farm are critical. We must invest in our people on farm, major reworking to get apprenticeship sorted through to continual development of all layers of farm management.
Business planning skills are 100% necessary to run farm businesses and we need to operate as the professional businesses we are.
Many farmers have borrowed money to invest in technology, education and advice to improve their business. With current industry settings many would question further borrowing in an uncertain future.
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