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Managing complexity in modern farming

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  • Kingwell, Ross S.

Abstract

Modern farming in Australia is no longer simple. Farms are large, multi-enterprise businesses underpinned by expensive capital investments, changing production technologies, volatile markets and social challenges. The complexity of modern broadacre farming leads to the question: what is the nature of the relationship between farm business complexity and farm profitability? This study uses bioeconomic farm modelling and employs eight measures of complexity to examine the profitability and complexity of a wide range of broadacre farming systems in Australia. Rank order correlations between farm profitability and each measure of complexity show inconsistent relationships, although the most profitable farming systems are found to be reasonably complex on several criteria. Among the set of highly profitable systems are found some characterised by less complexity. A commonly acknowledged feature of farm business complexity is the annual workload of the farmer, yet the trade-off between farm profit and this workload is found not to be large. A case is outlined where the farmer’s annual hours worked could be reduced by 9 per cent for a 3 per cent reduction in farm profit. If farmers’ workloads are proving problematic now, and in the future, then agricultural R&D, service delivery and policy development will need to focus more on being highly attractive to increasingly time-poor farm managers.

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  • Kingwell, Ross S., 2011. "Managing complexity in modern farming," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 1-23.
    • Handle: RePEc:ags:aareaj:176800
    DOI: 10.22004/ag.econ.176800
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    Cited by:

    1. Taylor, Chris & Cullen, Brendan & D'Occhio, Michael & Rickards, Lauren & Eckard, Richard, 2018. "Trends in wheat yields under representative climate futures: Implications for climate adaptation," Agricultural Systems, Elsevier, vol. 164(C), pages 1-10.
    2. Lawes, R.A. & Kingwell, R.S., 2012. "A longitudinal examination of business performance indicators for drought-affected farms," Agricultural Systems, Elsevier, vol. 106(1), pages 94-101.
    3. Graeme J. Doole & Alvaro J. Romera & Alfredo A. Adler, 2012. "A Mathematical Optimisation Model of a New Zealand Dairy Farm: The Integrated Dairy Enterprise (IDEA) Framework," Working Papers in Economics 12/01, University of Waikato.
    4. Gómez-Limón, José A. & Gutiérrez-Martín, Carlos & Riesgo, Laura, 2016. "Modeling at farm level: Positive Multi-Attribute Utility Programming," Omega, Elsevier, vol. 65(C), pages 17-27.
    5. Ulukan, Defne & Grillot, Myriam & Benoit, Marc & Bernes, Gun & Dumont, Bertrand & Magne, Marie-Angélina & Monteiro, Leonardo & Parsons, David & Veysset, Patrick & Ryschawy, Julie & Steinmetz, Lucille , 2022. "Positive deviant strategies implemented by organic multi-species livestock farms in Europe," Agricultural Systems, Elsevier, vol. 201(C).
    6. Doole, Graeme J. & Romera, Alvaro J., 2015. "Trade-offs between profit, production, and environmental footprint on pasture-based dairy farms in the Waikato region of New Zealand," Agricultural Systems, Elsevier, vol. 141(C), pages 14-23.
    7. Kingwell, Ross & Loxton, Ryan & Mardaneh, Elham, 2020. "Factors and scenarios affecting a farmer’s grain harvest logistics," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(2), April.
    8. Islam, Nazrul & Xayavong, Vilaphonh & Kingwell, Ross, 2014. "Broadacre farm productivity and profitability in south-western Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    9. Latruffe, Laure & Mann, Stefan, 2015. "Labour constraints on choosing profitable products for part-time farmers in Swiss agriculture," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(2), pages 1-15, August.
    10. Kingwell, Ross & Islam, Nazrul & Xayavong, Vilaphonh, 2020. "Farming systems and their business strategies in south-western Australia: A decadal assessment of their profitability," Agricultural Systems, Elsevier, vol. 181(C).
    11. Kotir, Julius H. & Bell, Lindsay W. & Kirkegaard, John A. & Whish, Jeremy & Aikins, Kojo Atta, 2022. "Labour demand – The forgotten input influencing the execution and adoptability of alternative cropping systems in Eastern Australia," Agricultural Systems, Elsevier, vol. 203(C).
    12. Browne, Natalie & Kingwell, Ross & Behrendt, Ralph & Eckard, Richard, 2013. "The relative profitability of dairy, sheep, beef and grain farm enterprises in southeast Australia under selected rainfall and price scenarios," Agricultural Systems, Elsevier, vol. 117(C), pages 35-44.
    13. Martin, Guillaume & Barth, Kerstin & Benoit, Marc & Brock, Christopher & Destruel, Marie & Dumont, Bertrand & Grillot, Myriam & Hübner, Severin & Magne, Marie-Angélina & Moerman, Marie & Mosnier, Clai, 2020. "Potential of multi-species livestock farming to improve the sustainability of livestock farms: A review," Agricultural Systems, Elsevier, vol. 181(C).
    14. Tim Lefroy & James Key, 2018. "Determinants of Broadacre Farming Efficiency in Western Australia: A Stochastic Frontier Analysis," Economic Papers, The Economic Society of Australia, vol. 37(2), pages 180-196, June.
    15. Brendan Lynch & Rick S. Llewellyn & Wendy J. Umberger & Marit E. Kragt, 2018. "Farmer interest in joint venture structures in the Australian broadacre grains sector," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 472-491, March.
    16. Thamo, Tas & Addai, Donkor & Pannell, David J. & Robertson, Michael J. & Thomas, Dean T. & Young, John M., 2017. "Climate change impacts and farm-level adaptation: Economic analysis of a mixed cropping–livestock system," Agricultural Systems, Elsevier, vol. 150(C), pages 99-108.
    17. Finlayson, John & Real, Daniel & Nordblom, Tom & Revell, Clinton & Ewing, Mike & Kingwell, Ross, 2012. "Farm level assessments of a novel drought tolerant forage: Tedera (Bituminaria bituminosa C.H. Stirt var. albomarginata)," Agricultural Systems, Elsevier, vol. 112(C), pages 38-47.
    18. Young, Michael & Kingwell, Ross & Young, John & Vercoe, Phil, 2020. "An economic analysis of sheep flock structures for mixed enterprise Australian farm businesses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    19. Weifeng Xu & Qingsong Ruan & Chang Liu, 2019. "Can the Famous University Experience of Top Managers Improve Corporate Performance? Evidence from China," Sustainability, MDPI, vol. 11(24), pages 1-20, December.
    20. Randall, M. & Montgomery, J. & Lewis, A., 2022. "Robust temporal optimisation for a crop planning problem under climate change uncertainty," Operations Research Perspectives, Elsevier, vol. 9(C).
    21. Nuthall, Peter L., 2012. "The intuitive world of farmers – The case of grazing management systems and experts," Agricultural Systems, Elsevier, vol. 107(C), pages 65-73.
    22. Sanaz Shoghi Kalkhoran & David Pannell & Maksym Polyakov & Ben White & Morteza Chalak Haghighi & Amin William Mugera & Imma Farre, 2021. "A dynamic model of optimal lime application for wheat production in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 472-490, April.
    23. Michael Young & Ross Kingwell & John Young & Phil Vercoe, 2020. "An economic analysis of sheep flock structures for mixed enterprise Australian farm businesses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 677-699, July.
    24. Shoghi Kalkhoran, Sanaz & White, Benedict & Polyakov, Maksym & Chalak, Morteza & Mugera, Amin William & Pannell, David J., 2018. "A Dynamic Optimization Model of Agricultural Lime Application," 2018 Annual Meeting, August 5-7, Washington, D.C. 274340, Agricultural and Applied Economics Association.
    25. Junquera, Victoria & Rubenstein, Daniel I. & Grêt-Regamey, Adrienne & Knaus, Florian, 2022. "Structural change in agriculture and farmers' social contacts: Insights from a Swiss mountain region," Agricultural Systems, Elsevier, vol. 200(C).

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