Agriculture has been transformed in the last few decades and more change lies ahead. The scale of change is vast, with the Australian Bureau of Statistics reporting in December that Australia has 100,000 less farmers in one generation. But the rate of change is not evenly spread across the agricultural ‘system’. While most farmers have innovated to adapt, in many cases the same can’t be said of their representative structures. Farmers in the grass-fed cattle industry and the dairy industry are currently questioning how their institutions can be more effective.
Farm policy and representation institutions have been integral to the development of all Australian agricultural industries. They remain no less relevant in today’s globalised, connected and disruptive business and political economy. In fact, you could argue that they are more important than ever.
Meanwhile, deregulation, industry consolidation, global value chains and information technology have and continue to transform the business environment. Also, private equity, institutional and foreign investors in Australian agriculture are seeking to grasp opportunities from the growth of Asia, in particular, and placing new imperatives on how industry organisations deliver value.
Australian farm businesses have innovated and adapted their business models to succeed in the modern international food and fibre economy. However, industry institutions have generally struggled to keep pace by innovating in line with the evolving needs of farm businesses for modern and sophisticated representative and policy services. Many continue to operate through arrangements that have existed for decades.
As applies to modern farm businesses, there is a relentless pressure for rural industry organisations to be structured and to operate as professional, world class entities that deliver value. However, making the transition is proving to be a challenge.
News about farmer dissatisfaction with their industry organisations is actually a healthy sign of institutional innovation ahead. It means that farmers are stepping up rather than clinging on to old arrangements. Still, innovation is inherently risky and the prospects of success are maximised when leaders keep a sharp focus on how the transition process is designed and implemented.