Australian farmers are some of the best in the world - but even they can’t get much yield from their land in a crisis. When events such as droughts occur, there's little room to boost resilience through increasing production. Instead, that resilience has to come from making better business decisions - understanding what to do with produce and profits during the good years, to ensure more flexibility when times are tough.
Boosting profitability through financial literacy
To boost farm profitability, Rural Business Support (RBS - a leading agribusiness not-for-profit) developed a program to help farmers make better business decisions by improving farmers' financial literacy. It ran pilot programs in the South Australian dairy and grain industries from 2016-2018.
A milk price squeeze along with exceedingly dry conditions in parts of South Australia have caused many difficulties for dairy and grain businesses over recent years. Some grain crops in the state have even failed completely. RBS' Farm Business Strategic Review program was therefore the perfect fit for farmers looking to improve their resilience to crisis events through a better understanding of business and finance.
Project evaluation and cost analysis services with BDO EconSearch
As with any program supported by industry and public funding, it was essential for RBS to understand and demonstrate the impact of their efforts, and particularly whether the increase in farm profitability exceeded the cost of delivering the scheme. RBS came to BDO EconSearch for these crucial program evaluation and cost benefit analysis services.
EconSearch was founded in 1995 to provide independent economic research and consulting services in the Australian agricultural and resource industries. In 2017, it merged with BDO, and its extensive experience in the agricultural sector means BDO EconSearch is the natural choice for farming industries across Australia when they need economic analysis and advice.
BDO EconSearch surveyed families involved in the program to find out about their situation prior to participating. This step was crucial to the research, allowing the team to later accurately measure the true impact of the program by comparing with actual outcomes after the program.
Upon completion of the pilot, BDO EconSearch showed the participating farmers what they'd said pre-program, asking what had changed and how much of that change could be attributed to the program.
BDO EconSearch found that the program not only improved farm business planning and organisation, but also had various emotional benefits for farming families. For example, participants were generally more satisfied with their business relationships, mental and physical health and business performance.
There was also a significantly positive cost-benefit ratio to the program. The families' income and expenses had changed as a result of taking part in the program and the resulting increase in farm profit far exceeded the cost of RBS delivering it.
RBS is currently using BDO EconSearch’s evaluation results to support their case in seeking funding to extend the program to other industries and regions. The qualitative data gathered has also allowed RBS to make improvements to the program, ensuring the best possible results for participants.
For more information on our project evaluation and cost benefit analysis services
, reach out to BDO EconSearch today.