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PR - Resilience, To ‘bounce Without Breaking’, In New Zealand Dairy Farm Businesses

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Listed:
  • Shadbolt, Nicola
  • Olubode-Awosola, Femi
  • Rutsito, Bvundzai

Abstract

New Zealand dairy farmers face an increasingly turbulent business environment which poses risks to their survival. To cope with a turbulent environment, dairy farmers need to have resilient farming systems that have the capacity to better deal with volatility. Although system resilience has been given increasing attention recently, limited research has been undertaken about resilience particularly in relation to New Zealand dairy farmers. The main purpose of this study was to develop an understanding of what resilience means for dairy farming and to determine how it might be measured. In the literature review it was identified that resilience can be described as buffer capacity, adaptability and transformability with increasing degrees of change required with each. The research for this paper focused on buffer capacity, the ability of a farming system to ‘bounce without breaking’, and carried out rigorous statistical analysis of the DairyBase® database to identify resilience surrogate measures. Of the three attributes of buffer capacity the PCA method identified that the dominant attribute was resistance (both technical and financial efficiency), the less dominant were precariousness (solvency) and latitude (liquidity) attributes. In conclusion, those farms that were more resilient when compared against the less resilient farm businesses, the farms that could ‘bounce without breaking’ were: 1) technically efficient – produced more milk per cow, hectare and labour unit, 2) financially efficient – generated more profit per unit of revenue, linked costs with prices, had higher Return on Assets. 3) cash liquid – generated more discretionary cash for investment/drawings, 4) managed debt servicing capacity The farms that were able to demonstrate both short-term optimization and long-term adaptability (Darnhofer et al, 2008) were those that were neither low input nor high input pasture based farms. They had farming systems that sat in the middle of the range (system 3) so were able to both respond to favourable and unfavourable conditions to improve or protect results respectively; they displayed the flexibility to bounce and not break. Further research is required to identify how some farm businesses are able to maintain resilience throughout quite volatile climatic and economic environments while others cannot. How do these farmers make sense of the information they receive and make sound decisions and what makes their systems more flexible than others?

Suggested Citation

  • Shadbolt, Nicola & Olubode-Awosola, Femi & Rutsito, Bvundzai, 2013. "PR - Resilience, To ‘bounce Without Breaking’, In New Zealand Dairy Farm Businesses," 19th Congress, Warsaw, Poland, 2013 345696, International Farm Management Association.
    • Handle: RePEc:ags:ifma13:345696
    DOI: 10.22004/ag.econ.345696
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    References listed on IDEAS

    as
    1. Harris, David, 1997. "Principal Components Analysis of Cointegrated Time Series," Econometric Theory, Cambridge University Press, vol. 13(4), pages 529-557, February.
    2. Shadbolt, Nicola M., 2012. "Competitive strategy analysis of New Zealand pastoral dairy farming systems," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 1(3), pages 1-9.
    3. Kaine, G. W. & Tozer, P. R., 2005. "Stability, resilience and sustainability in pasture-based grazing systems," Agricultural Systems, Elsevier, vol. 83(1), pages 27-48, January.
    4. Lien, Gudbrand & Brian Hardaker, J. & Flaten, Ola, 2007. "Risk and economic sustainability of crop farming systems," Agricultural Systems, Elsevier, vol. 94(2), pages 541-552, May.
    5. Hansen, J. W. & Jones, J. W., 1996. "A systems framework for characterizing farm sustainability," Agricultural Systems, Elsevier, vol. 51(2), pages 185-201, June.
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