Evaluating the Potential Returns to Investment in RD&E in the Southern Australian Grains Industry
Over recent decades, the Australian grains industry has faced various challenges arising from changing climate, increases in extreme weather events and declining public research, development and extension (RD&E). At the same time, there has been growing competition in Australia's main grain export markets. To increase the annual rate of productivity growth and maintain international competitiveness, more and better-aimed investments in agricultural RD&E are required. Equilibrium Displacement Models (EDMs) provide a framework for assessing the potential economic returns to investments in agricultural RD&E and the distribution of these returns along the industry supply chain.
In this paper, an EDM for the southern Australian grains industry, encompassing South Australia, Victoria and Tasmania, is developed as a companion to the previously developed EDM of the WA grains industry. Using the EDM, three hypothetical RD&E investment scenarios are examined: a reduction in the cost of farm production variable inputs resulting from new farm technologies or improvements in cropping processes and practices; a cost reduction in stockfeed manufacturing resulting from new technologies and improved industrial techniques; and an increase in the willingness of overseas consumers to pay for wheat due to quality improvements or promotion. The results show that, directing RD&E towards a market segment of the supply chain with high gross revenue generates greater returns to the industry as a whole. As such, RD&E investment aimed at either farm production or bulk wheat export-segments of the supply chain which account for substantial gross value at farm gate and port-can yield high returns. Additionally, producers gain a greater share of benefits when productivity-enhancing research is directed towards on-farm rather than off-farm processes. Furthermore, producers can accrue large shares of the total benefits arising from research that enhances the quality of bulk grain exports because of the high price elasticity of demand for export grains.
Consumers' preferences for animal-source foods and retail outlets: The case of Tanzania
Growth in population and income, as well as urbanisation, are contributing to the growing consumption of high-value foods in developing countries. However, public and private investments targeting high-value agricultural markets are constrained by limited information on the quality dimensions of the market, the nature of traditional retail formats, and consumer segmentation. This paper presents a simple and appropriate methodology to provide such information, and applies it in Tanzania to animal-sourced foods. It features a rapid survey, which is then aligned with nationally representative survey data. The results show that Tanzanian consumers demand, and are anticipated to continue demanding, relatively good-quality animal products but in rather low-valued product forms. Consumer segments are differentiated by level of wealth and by choice of retail format and retail product form, rather than by quality per se.
Determinants of Profit Efficiency among Smallholder Beef Producers in Botswana
The livestock sector is vital to Botswana's rural economy comprising nearly two-thirds to the national agricultural sector. The goal of this research is to measure competitiveness and identify the factors affecting it, so as to advocate change in Botswana's smallholder livestock systems. The study examines a cross section of farm-level data gathered from 556 randomly selected livestock producers to investigate the profit efficiency and competitiveness of three farm size categories of small holder livestock farmers. Results found a considerable capacity to improve beef profitability. Scale effects on profit efficiency are generally positive, but the results indicate a number of interactions between scale and other variables such as off-farm income and the use of credit. Policy analysis and commercial decisions using models that assume efficiency are therefore presenting a misleading picture, particularly on the elusive subject of Botswana smallholders' beef supply response.
Assessing Relationship Quality as a Driver of Innovation in a Western Australian Lamb Production Network
The Western Australian sheep meat industry has been in steady decline for the past three decades, with sheep numbers in the state halving since 1990. There are many causes of this decline, but innovations in product and marketing have also presented new opportunities for the industry. In a single organisation case study, novel assessment methods were used to generate quantitative and qualitative data to measure supply chain relationship quality and its determining factors. Results indicated an imbalance between processor and producer perceptions of relationship quality, where processing staff recognised the potential for improvement from the current quality of relationships while producers were content in their relationships. Across several on-going innovations, evidence for cohesion of supply chain actors in the innovations' implementation was scarce. Results suggest that the processor's staff and producers are willing to improve supply chain relationships, but their action is constrained by opposing perceptions of supply chain performance. Improved communication channels and direct contact from the processor will see producers more satisfied and willing to increase commitment. Further, it is suggested that livestock agents will need to act in a manner beneficial to others in the supply chain to improve the quality of relationships with processors and producers. The processor proposes actions to achieve these ends, essentially by paying personalised attention to individual producers' needs.
The use of innovation uptake in identification of business models in the Indonesian smallholder cattle value chain
Purpose – The purpose of this paper is to guide commercial and policy action to improve smallholder Indonesian cattle systems.
Design/methodology/approach – A survey (n = 304) of smallholder cattle farms in six villages in two districts of Nusa Tenggara Barat, Indonesia. Principal component analysis (PCA) and cluster analysis (CA) were employed to classify cattle farms into business models according to observed innovation. Differences between business models were identified using a one-way-analysis-of-variance (ANOVA).
Findings – Four business models were identified, representing profiles of innovation adoption and elements of business models, socio-economic characteristics, farming system and performance variables including revenue, cost and profit. The business models display a range of orientation to buyer requirements and a range of approaches to production, indicating a need to promote in a variety of ways the change from supply-push to demand-pull in the cattle value chain.
Research limitations/implications – This study offers guidance on how business models might be strengthened over time, by using simple indicators of performance and the models' linkage to innovation in the context of each business model. The business models developed here, and refinements to them based on localised conditions, offer a targeted and accelerated pathway to improved performance in smallholder systems.
Originality/value – This study proposed a novel approach to the recognition of business models based on innovation.