By MARGARET JAKOVAC
of Australian Farm Journal
STOCK and stations agents across Australia are redefining their role in a changing world of new technology, amalgamations, food safety issues, new-look livestock sales and fledgling competency and training standards.
Traditionally, stock and station agents, or rural merchants - give advice to and act for clients to buy or sell rural land, livestock, wool and crops. They inform farmers about prices, new products, industry standards, development, marketing, innovation and legislation. The average agent - there are about 4000 to 5000 Australia-wide - earns about $50,000 before tax.
University of South Australia lecturer, Chris Martin, in his August 2000 Rural Industries Research & Development Corporation (RIRDC) report on Agents as Information Providers, says less than one-third of agencies are now small independents - the rest are with key players Elders and Wesfarmers Landmark (WL).
However, in WA the two "big" players, Elders and Wesfarmers Landmark dominate the agency scene, with very few indedendents.
Through the formation of alliances and huge investments, these two traditional 'pastoral houses' have been transformed into modern, multi-faceted businesses.
WL now has a 40pc share of the farm inputs market.
"We should not fall under the stock and station agents name now - we're an industrial conglomerate," WL spokesman David Coombes says.
Earlier this year, the company's merger with IAMA resulted in WL in Australia drop the name 'Dalgety', an industry icon for 150 years.
The comglomerate's activities now span coal mining, gas production, fertiliser and chemical manufacturing, hardware chains and forest products as well as road and rail transport.
Its rural services and Wesfarmers Federation Insurance businesses earned $57 million in the past financial year - almost one-third of Wesfarmers' overall operating revenue.
The other industry giant, Elders, meanwhile, has made a direct and 'huge' vertically integrated investment in the wool industry, to "link the nation's growers with their retail consumers".
Another strategic investment has been the Elders Rural Bank, which recorded an after-tax profit of $10.248 million in the year to June 2001, and has a $1-billion-plus asset base.
It has 400 branches in Australia and its Bendigo Bank agreement adds another 175 outlets and branches.
But, WL creates alliances rather than invests to diversify its services.
Its Rabobank alliance, for example, gives farmers access to finance through the WL branch network.
"We can still deliver wool processors for our farm customers. We do not believe you have to own a business to accomplish the same thing," Mr Coombes says.
Common to both key players is their technology investment. Their websites cover market reports, business tools, selling alternatives, risk and portfolio management as well as sales rosters. Farmers are increasingly accessing the internet for free and pay-per-view market intelligence reports on grain, livestock and wool and prime sales reports.
Meat and Livestock Australia (MLA) chairman and producer David Crombie says it's these new forms of communication technology that constitute threats, challenges and opportunities to the traditional agency.
"There's a whole plethora of information out there now and agents are really having to look at their role, in the supply chain and having to define it more closely, to add value. They are threatened by this," he says.
But, the new information providers say technology is not competing with agents, despite doing part of what agents traditionally do.
NFF's Farmwide chief executive officer Robert Ceramidis says he has "no intention to diminish what they (agent) do. We act as a catalyst for information provision".
But, he says he is also not working specifically with agents.
Technology in the saleyards:
Technology is also making inroad into the bread and butter business of stock and station agents - livestock auctions at saleyards - which nets them up to 5pc commission.
Some of Australia's 119 active saleyards have piloted electronic selling (AuctionsPlus or A+), which could be rolled out as a permanent feature of just under half of Australian sale yards from October. A+ general manager Greg Black says the system's predecessor, CALM, was "incredibly ambitious" and tried to mimic the agency network with "50-odd people spread throughout Australia".
A+ is now just six people partnering with key saleyard industry organisations. Elders has a 50pc share in A+; WL 40pc and Tasmanian mega-agent, Roberts, 10pc.
Black says of his software company: "We complement what the agent does ... we provide an additional marketing tool for agents and producers."
Since last November's launch, A+ auctioned up to $3 billion in goods.
A+-watcher, Andrew McCarron, chief executive of the Stock and Station Agents' Association, says information from the auction site will be fed into a livestock marketing website, potentially drawing bidders worldwide, as part of the Cyber Auctions program run by the Saleyard Operators' Association (SOA) and the University of Sydney.
SOA executive officer Ron Penny says it changes agents' role to give "not just visual, but a factual assessment of the animal".
On-site and face-to-face exemplifies agents' past and future roles, and, as Coombes says, you "need to be on the spot, such as for looking at crops, pastures and animal health issues".
NSW agent for 53 years, Peter Milling, Dubbo, recalls the 'pocket book agents' of days gone by. They worked from home with just a pocket book and a car up until the 1950s when much stock was sold on farms rather than sale yards.
As the Australian Council of Livestock Agents' inaugural president, Milling recalls representatives from 20-odd wool-broking firms attending the first meeting. But, amalgamations have brought them down to "now ... basically two players".
Mr Milling says while large agents have economies of scale, small agents still have a place, because "it's hard to compete with someone who wants to work 16 hours a day on their own".
Customer loyalty is the lifeblood of particularly small, independent agents.
Mr Milling says some of his clients are descendants of his grandfather's clients. Diversification has fuelled his firm's longevity, but not into merchandising as it would require huge volumes to compete against firms such as CRT (Combined Rural Traders) or Mitre 10.
NSW-based farm management expert with the University of Sydney, Ed Henry, says agents have done less merchandising over the past 20 years as they can't afford to carry the products.
Rural land sales, however, are still a regular and widespread service.
Victorian agent with Warrnambool Co-operaive Society, John Lynch, says competition has created better services and made margins "very skinny", adding: "Anyone can put up a shed and sell stuff.
The heart and soul [of agencies] is the people."
Australian Women in Agriculture president Cathy McGowan says the gender of agents or farmers is not necessarily an issue.
A Victorian-based sheep and cattle producer, Cathy McGowan says a strong relationship is based on agents' respect and meeting farmers' needs.
"The good [agents] know there's not just one farmer - there are multiple roles played on each farm. The agent will go into the house and have a cup of tea, talk to the wife and involve the children. Other agents may just go down to the shed to talk whoever is working outdoors," she says.
Small, independent agents sometimes gain from the amalgamation drive which has been a hallmark of the industry. MLA's Mr Crombie calls it a continuing 'cycle of aggregation'.
"There seems to be a cycle of aggregation where small agencies are swallowed into larger agencies and if the levels of service become a lot more generic .. opportunities open for the small agent to go into, such as where the larger agent is unable to meet the needs and expectations of individuals," he says.
Agents as information disseminators:
In his RIRDC report, Mr Martin says agents make information more meaningful for many broadacre farmers and producers, so are a "cornerstone of the decision-making process".
On this, the Cattle Council's Mr Toohey sees agents as the "touch point between policy developers and products, and conduits we can send messages through to producers".
With a decline in the number of state government extension officers, agents have picked up some of the slack along with private consultants and communications technology.
But the message doesn't always get through to farmers, as the MLA and Grains Research Development Corporation have found.
Tasmanian Farmers' and Graziers' Association executive officer, Brett De Hayr, says agents in Tasmania, for example, while crucial in their support of a recent Johnes-disease testing program, had been elsewhere 'patchy' in delivering information.
However, he admits part of the problem lies with producers who do not have a consistent message as to what they want.
Almost one-third of broadacre farmers are now using marketing or co-operative arrangements to help them with their planning, production or marketing decisions.
Mr Toohey cites savvier producers who are more aware of what the consumer, processor and downstream links demand and are more able to deliver direct to them without agents.
Agents also lose out with increased direct sales of finished stock to processors.
Agents are also being forced to become modern and more accountable under the push for food safety and quality assurance.
Queensland-based national president of the Australian Council of Livestock Agents (ACLA), Earl Pratt, says agents have played a big role in ensuring NVDs cover saleyards' quality assurance.
"We get declarations from our producers. It's not our role to touch it, but it's our role to see if it's incorrectly filled in," he says.
One way to improve agents' support for quality assurance is through training.
For the past decade the largest ACLA member group, SSAA, has been developing national competency standard which now await the Federal Education Minister's approval.
Flowing on from the standards are three new courses specifically for the industry: Certificate III in Property (Livestock); Certificate IV in Property (Stock and Station Agency); and a Diploma in Property (Stock and Station Agency).
Mr McCarron says the training package also recognises prior learning: "It brings about portability [of qualifications] in the industry, but there are other legislative issues which will underpin the operation of agents that are state-based," he says.
Former Deputy Prime Minister and now Federal MP, Tim Fischer, the son of a stock and station agent, says agents are the "glue, the essence and fabric of so many communities".
"[The industry] has been a dynamic force for community cohesion. [It] continues to change. On the farm, the handshake on which many deals have been struck is still a main element today," he says.
"It's had more than its fair share of colourful characters over the years, but it has had one or two vagabonds."