United approach key to vibrant agriculture industry

29 Aug, 2012 02:00 AM
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DAFWA director-general Rob Delane.
DAFWA director-general Rob Delane.

THE Department of Agriculture and Food (DAFWA) will look to build more relationships with other agricultural players to help address the issues facing WA's agricultural industry.

In a recent one-on-one interview with Farm Weekly, DAFWA director-general Rob Delane responded to the Farm Weekly Is ag dying? series and also addressed a number of comments that have arisen from that series, questioning the direction DAFWA is heading.

Mr Delane stated that a significant transformation at the market trade end of the sector, in other words a major change in demand and price, and at the production end was required to position WA's agricultural sector to meet future challenges and opportunities.

"DAFWA is very positive about the future, but that doesn't mean we don't think it isn't incredibly tough in most areas of agriculture today," Mr Delane said.

"DAFWA is focused on getting sectors to the point where they are celebrating rather than being worried every day.

"I have been in agriculture all my life and it has been through some tough times and probably a lot tougher times than we are seeing now but it comes out of it because of the resilience of businesses in it.

"But I also acknowledge that probably for the cropping sector, it is a long time since it has been as tough as it is at the moment."

Mr Delane said taking hold of opportunities that would present themselves from food security concerns in the future would involve a whole-of-industry approach.

"It goes to the heart of business performance. So we need to look at what is driving business success," he said.

"We should work with others in the industry such as banks, agricultural consultants, financial counsellors and a whole range of partners for the sector to craft a solution.

"It is actually businesses within the agriculture sector that collectively need to plan out a future for the sector.

"People in the sector will see DAFWA more and more doing business and industry diagnostics to help create a better business sector, and then feeding that back into our programs and feeding that back to others including R&D corporations, universities and other such organisations as to where attention needs to be applied for greater sectoral success."

Mr Delane said there continued to be confusion from sectors of the industry regarding what DAFWA's role was in the modern agricultural environment.

"I still hear industry asking questions about why we classify ourselves as an Economic Development Agency (EDA)," he said.

"I find that curious. The director-general when I joined the department 30 years ago tells me that he has no doubt about DAFWA being an EDA.

"In the past we were helping the sector develop new land, the Ord River development was relatively new, sure we had different strategies then and offered a lot more service, a lot more research and development and there were probably more technical issues to tackle. There were big challenges but with big opportunities.

"A lot of that has since been resolved but there are new problems and they are probably more complex and there are smaller gains.

"But an EDA basically means that you achieve your success through a cohort of businesses.

"What is an economy? It is a diverse system of businesses and in agriculture and food we have a dominance of producing businesses but there are very few businesses when you get to the processing and export end.

"So most of the focus is on the production end. We can't be successful on what we do unless the technology, the methodology, the information and the capacity building we are involved in expresses itself through a business in the main."

Mr Delane said it was eminently sensible that the economic development role be emphasised.

"I guess the shift in our emphasis is on doing more on major developments such as the Ord River Stage Two or potential developments like irrigated agriculture for the west Kimberley, irrigation development for the Pilbara, the expansion of the Carnarvon production area or the expansion of an irrigated agricultural area close to Perth," he said.

"We are not just looking at the production sector but the whole supply chain."

Mr Delane also addressed comments that DAFWA shouldn't be overseas "selling a tonne of wheat because it hasn't actually got a tonne of wheat to sell" or that it was morphing into a marketing body.

"Those type of comments amaze me because we don't actually do that," he said.

"We have a small trade development group and I actually think it needs to increase. Our job isn't to sell products but we do need to work even more closely with the companies that are actually doing the exporting.

"It is easy to say WA exports $5b worth of produce but it is the companies, not DAFWA, that do those transactions.

"We need to focus on how can we help those companies be more successful in growing markets or getting into markets they are currently not in or to extract higher returns out of those markets?

"Take the Saudi wheat market as an example. This would not have been opened up for WA wheat exporters without the participation of WA government and technical experts from DAFWA."

Mr Delane used the dairy industry as another example of the changing role of DAFWA in the current environment.

"Where are the biggest issues in dairy?" he said.

"These issues are playing out on the farm but they are not how to grow grass or clover for dairy cows, they are how to grow the market for high value products so that returns can flow back to dairy farmers.

"You know we hear a lot that our staff don't get mud on their boots.

"But frankly, I don't know what our people would do on farms and certainly the priority issues are not on farms.

"Look at the ban on live export to Indonesia as another example.

"Where was the right place for us to be? Working with businesses, industry in general, the Federal Government and supporting the Agriculture and Food Minister to go to Indonesia to rebuild relationships. That was the most mud on the boots thing we could do.

"In most of the sectors there are critical issues in the supply chain off the farm.

"There is a lot of pressure out there and I am not going to diminish that.

"But at the same time there is a lot of diversity.

"Some of the most important work we have done in recent times is things such as the drought pilot program, which has made a fabulous contribution to a number of businesses.

"Over 1100 people have been through those workshops and they have been there as mainly the family business unit.

"It has highlighted to us that there is a lot of business units, individuals and families that really do not have the skills they need to have in the modern operating environment.

"It is just tougher and more complex and there is a very high level of debt out there.

"Other work we have done is analyse the difference in performance between businesses within the same operating environment.

"The absolute top producers in the higher rainfall areas were performing with the same rainfall and land size and the parameters the same.

"So we need to look at those better performing businesses and extract what they are doing that puts them in that position for the good of the greater sector.

"The MoreSheep initiative is a fantastic example of this. We have bought all different players in the sheep industry together to look at solutions to rebuilding WA's sheep flock."

But how are groups like this accountable? Does DAFWA set them targets to reach?

"MoreSheep has a a clear plan, it is not just about being busy, not just about servicing," Mr Delane answered.

"We have identified from all the existing knowledge what the critical issues producers need to address to get marking percentage up.

"If you are going to be successful that is sort of marking percentage (100pc) you are going to need to have."

So using the current issues surrounding the WA dairy industry as an example, what role can DAFWA play higher up in the supply chain, away from the farmgate?

"You have to grow the demand for milk," Mr Delane said.

"Supermarkets or consumers won't pay a premium price so you have to find a market that will.

"We know we can export fresh milk from WA at a premium price for a premium product, into large markets with a wealthy sector which is not too far from WA.

"Companies will have to do that, but DAFWA can provide a lot of technical assistance, we can provide facilitatory support, we can work with our trade officers, we can better inform companies to develop those markets.

"We will continue to work with producing businesses on benchmarking, cost efficiency so within the operating parameters they have got they can be as successful as they can be."

A cynical person may say that the move to work with other industry players is a reflection of the decrease in resources, both staff and infrastructure, that DAFWA now has to work with but Mr Delane said this was not the case.

"DAFWA been through a range of different phases," he said.

"Yes things are tight I think it is common knowledge that we are going through another efficiency drive within DAFWA that is not driven by the State Government budget process.

"But we are subject to cost drivers and so we are reducing our costs by 10pc right now.

"Our future will be focusing on what we need to be talking about, analysing, what decisions do businesses of all types, communities, departments, government need to be making which will create the best opportunity for the sector given all the global and local drivers on it."

"If we deliver value to our clients and therefore value to the state through a vibrant agriculture and food economy the governments of the day will determine the rest."

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