Regional Cropping Industry Profile

Cradle Coast NRM

Regional Cropping Industry Profile Report 1 – General Industry Overview

31 August 2011

ABN: 35 154 629 943

Tasmanian Office: 1/9 Arnold Street, Penguin, Tasmania 7316 PO Box 396, Penguin, Tasmania, 7316 T (03) 6437 2264 F (03) 6437 2271 E rm@rmcg.com.au

W www.rmcg.com.au

Contact Details: Name: Anna Renkin Title: Consultant Address: PO Box 396, Penguin, Tasmania 7316 P: (03) 6437 2264 F: (03) 6437 2271 M: 0427 679 047 E: annar@rmcg.com.au

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Final Report

31/08/11

A. Renkin

N. McGuckian S. McGuinness

M. McIntosh

S. McGuinness

H. Sadler

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Disclaimer: This report has been prepared in accordance with the scope of services described in the contract or agreement between RMCG and the Client.

Any findings, conclusions or recommendations only apply to the aforementioned circumstances and no greater reliance should be assumed or drawn by the Client. Furthermore, the report has been prepared solely for use by the Client and RMCG accepts no responsibility for its use by other parties.

Report 1: General Industry Overview Final Report

Table of Contents Executive Summary

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1 Industry profile 1 1.1 The age of landholders is in line with the national average .................................................... 1 1.2 Grazing is still an important enterprise .................................................................................... 1 1.3 Businesses are consolidating.................................................................................................. 1 1.4 The region has a long contract-growing history ...................................................................... 1 1.5 Some landholders are looking for more independence .......................................................... 1 1.6 Land used for cropping has expanded in the last five years ................................................... 2 2 Current practices 3 2.1 How do landholders plan their rotation? ................................................................................. 3 2.2 There are common ‘rules of thumb’ for cropping practice ....................................................... 3 2.3 Use of recommended practice varies* .................................................................................... 4 2.4 Industry is looking for new ideas ............................................................................................. 4 3 Key recommendations 5 3.1 Working within the operational context ................................................................................... 5 3.2 Good planning and program development .............................................................................. 5 3.3 Celebrate success................................................................................................................... 5 3.4 Support improvement .............................................................................................................. 6 Appendix 1: Research approach

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Appendix 2: Local use of recommended practice

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Appendix 3: Project recommendations in full

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Executive Summary The overall purpose of the Regional Cropping Industry Profile project was to build and improve relationships with decision makers in the cropping sector, identify issues and practice drivers, and recommend opportunities for improving natural resource management (NRM) in the cropping sector.

1

This is the first of three reports for the project , providing a snapshot of the operational context of cropping in the Cradle Coast NRM region. The report profiles the cropping sector, briefly describes current practices and recommends potential avenues for promoting good practice and supporting improvement.

This industry snapshot is based on data from 40 semi-structured interviews with landholders, vegetable packers/processors, poppy and pyrethrum companies and selected key agronomy advisors.

It has also been informed by a workshop with selected industry representatives and Cradle Coast NRM staff. Details of the research approach are provided in Appendix 1.

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The two other reports are: Report 2: Understanding Drivers of Practice Change (for internal use only); and Report 3: Extension Workshop Report.

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1

Industry profile

1.1

The age of landholders is in line with the national average The largest group among the landholders interviewed (42%) was 50-59 years of age, 2 consistent with the current national average age of 55 years . Nearly all of the landholders interviewed (88%) have spent their entire lives farming. Only three of these have worked elsewhere, all in related sectors (e.g. farm contracting or transport).

1.2

Grazing is still an important enterprise For three-quarters of landholders interviewed (77%), livestock grazing is still an important 3 enterprise . On most of these farms (60%) grazing represents between 10-20% of farm turnover, and for one third of these landholders it is closer to 40% of farm turnover.

1.3

Businesses are consolidating The majority of businesses interviewed (57% of landholders and 80% of packer/processors) are ‘consolidating’ at present. This term reflects a prevalent ‘wait and see’ or tentative attitude. Twenty per cent of landholders interviewed are ‘winding back’ or planning retirement from farming. Landholders who indicated they are expanding (23%) would better be described as being ‘open to opportunities’ rather than currently undergoing expansion.

Many expressed some concern about the availability of future contracts (e.g. vegetables), the impacts of imported produce, or prohibitive costs of farmland as limits to expansion.

The cost and availability of farm labour was raised by some landholders as a serious concern and a limiting factor in their daily operations. These cost pressures lead to landholders ‘doing more themselves’ which ultimately reduces their opportunities to engage with activities that aren’t immediately associated with everyday production tasks.

1.4

The region has a long contract-growing history Landholders in the Cradle Coast region share a long history of growing for packers and processors, some of which were first established in the 1960s. As a result, most have relied almost entirely on these contracting companies throughout their farming lives.

This relationship, where landholders do not have a role in marketing their produce, means they have also long devolved some of their production decisions or tasks to others. This long-standing culture of shared decision-making raises difficult questions about priorities, risk and responsibility. For example, who thinks about and ultimately bears the cost of soil degradation resulting from planting or harvesting in wet conditions?

1.5

Some landholders are looking for more independence Some landholders are moving away from total reliance on the packers and processors, in response to increasing financial pressures or a desire to have more control over their own

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Source: Land Management and Farming in Australia, 2009-10, ABS cat no 4627.0. Released 21 June 2011.

Recent ABS data (see above) shows this is a national trend, with 78% of Australian agricultural businesses engaged in grazing. The regional data from this ABS report puts grazing activities closer to 90% in the Cradle Coast region.

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operations. For some, finding their own markets or value-adding for the first time may test their knowledge and skills. The move may offer increased rewards but it also increases risk.

1.6

Land used for cropping has expanded in the last five years There has been growth in land ownership by both private landholders and the companies who pack or process vegetables, poppies and pyrethrum (885 ha and 710 ha respectively) since 2006.

The packer/processor companies have leased more land in the last five years, some 2,709 hectares, while the private landholders have leased a little less land overall, since 2006 (104 hectares less).

There has been an expansion of some 16,611 hectares contracted by the packer/processor companies. This figure is almost solely explained by a near-tripling in poppy contracts during the last five years, but pyrethrum contracts have also doubled, and there have been similar increases in contracts for several of the vegetable packer/processors, albeit at smaller scales. Notably this variation also includes the loss of approximately 2000 hectares of vegetable contracts following the closure of the McCain vegetable processing factory in 2010.

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Current practices

2.1

How do landholders plan their rotation?

The choice of crops grown in a rotation depends on a range of factors, including most commonly:  Soil suitability

 Profitability

 A crop’s impact on soil condition

 Availability of contracts

Other factors like timing of planting and harvesting, labour, likelihood of volunteers (weeds) and personal likes and dislikes (of crops and companies) are also considered when planning rotations.

Most landholders use a disease break of four to five years between certain crops (usually potatoes or onions). However, rotation length did vary from between just two years, up to as much as seven years between potatoes, for example. While this research did not examine financial situations in detail, it was clear that for some, increasing financial pressure has meant shorter rotations for cash flow reasons and to pay off debt, often conflicting with stated principles or ‘rules of thumb’ that are known from experience to bring the best results for the crop and soil condition.

2.2

There are common ‘rules of thumb’ for cropping practice It is clear there are some commonly agreed fundamentals that guide cropping practice, as the following statements in Table 1 show: Table 1: The most common rules of thumb for good cropping practice Fundamentals of good cropping practice

Landholders’ ‘rules of thumb’

Timeliness is everything. Attention to detail determines good crop outcomes.

“You can’t make a good crop out of a poor start.”

“Go for it right through, don’t do it in halves.”

Don’t work the ground in wet conditions. Look after your soil.

“Staying off the ground when it’s wet is number one.”

Maintain a good rotation and understand why.

Don’t grow too many root crops, have a disease break, protect soils with green crops, and listen to advice.

“Rotations are really the key. The ground needs time to recover from cropping.”

“Stick to your rotation.”

Don’t overwork the ground. Try to reduce the number of passes. Use the right gear.

“Minimum tillage is the way to go.”

Good paddock hygiene includes effective weed and disease control.

“Control your weeds.”

“Keep paddock edges clean.”

The importance of effective soil management and a sound crop rotation is clearly well known, but there was a mixed response to the routine achievement of these principles.

Landholders often expressed concern about what they perceived as forced compromise.

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2.3

Use of recommended practice varies* Widely used practices like regular soil testing or crop nutrition monitoring are to be expected given their direct links with productivity. In most cases, the contracting companies require or organise these activities.

A challenge of the predominant contracting system is that each contracted crop is often looked at in isolation rather than as part of a longer term, integrated crop management approach.

Both landholders and companies are engaging with integrated pest management (IPM), in some cases through programs supported by Cradle Coast NRM using respected and credible experts in the IPM field.

The need for erosion control throughout the region was generally very well understood (and widely practiced), as was the role of increasing organic matter inputs in building soil carbon.

One-pass cultivation has emerged as a major change for many landholders over the last five to ten years. This was largely driven by McCain (promoted through their grower groups) but in some cases trial and error.

On the whole, landholders in this research rarely fenced off waterways or planted native shelterbelts. The reasons for non-adoption of these particular activities are rational from a landholder’s perspective, given the financial pressure and time constraints voiced by many in this research, and the resultant focus on production tasks at the expense of other activities. *Refer to Appendix 2 for more results of recommended practice uptake

2.4

Industry is looking for new ideas Most of the contracting companies are already investing in one of more the following areas, with benefits for both profitability and resource condition, for example:  Controlled traffic farming  Using remote sensing and precision farming technologies to improve efficiency e.g. mapping in-paddock variation and using inputs accordingly  Carbon foot printing (understanding resource use efficiency)  Improved varieties e.g. for drought or pest and disease resistance

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Key recommendations The project recommendations (provided in full in Appendix 3) suggest that Cradle Coast NRM can support the cropping sector by focusing on the following key areas:  Working within the operational context  Good planning and program development We also recommend several ways for Cradle Coast NRM to:  Celebrate success  Support improvement

3.1

Working within the operational context To build credibility and foster effective uptake of NRM goals within the cropping sector, it is important for Cradle Coast NRM to fully understand and appreciate the goals of those involved by working more closely with landholders and industry.

The high degree of land management knowledge and experience within the sector (landholders and company staff alike) must be more broadly recognised by both the NRM community and the general public.

3.2

Good planning and program development It would be useful for Cradle Coast NRM to build Pannell’s public / private benefits 4 framework (2008) into program planning. Essentially this framework helps choose between broad groups of policy tools (like extension or financial incentives) to achieve efficient use of public resources on private lands. Importantly, it is based on the use of extension to improve decision-making, rather than to improve skills.

3.3

Celebrate success This research has uncovered many ‘success’ stories relating to landholder knowledge and farm practice, particularly around soil protection and management, which is a key regional goal for NRM. The success of past extension and promotion of erosion control methods, for example, can be further supported. Landholders and contracting companies are also interested in the development of new approaches like controlled traffic farming, which has also been previously supported by Cradle Coast NRM. The findings also reveal a genuine desire by many within the cropping sector to raise the profile of agriculture more broadly throughout the community. There are valuable opportunities for Cradle Coast NRM to play a lead role in celebrating success within the cropping sector.

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Pannell DJ (2008) Public: Private Benefits Framework version 3. INFFER Working Paper 0805. University of Western Australia

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3.4

Support improvement While the importance of effective soil management is clearly well known, there remains a question over how and why landholders might sometimes compromise their (often strongly held) principles or ‘rules of thumb’ for good cropping practice. There are opportunities for Cradle Coast NRM to better support landholders who will at times feel under stress or at reduced capacity to act, due to financial pressure. There are also ways to help build landholder confidence to reduce feelings of a ‘lack of control’ over the contracted crop cycle.

There are also gaps in landholder awareness and uptake of activities relating to the regional NRM goals of protecting healthy waterways and improving biodiversity in productive landscapes.

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Appendix 1: Research approach Overview of the research approach Table 2: The project aims and the process to achieve the aim Aims

Process

Identify the potential influence of contracting companies, large landholders and agribusiness in the cropping sector throughout the Cradle Coast region.

We interviewed a sample of these key organisations and individuals to gain a preliminary understanding of their goals and motivations, decision-making processes and world views. We also explored their risk profiles, preferred and trusted information sources, on-farm NRM issues and any NRM activities or new approaches taken to date.

Identify industry achievements as well as opportunities for improving NRM in the cropping sector.

Our analysis identified the extent and nature of current practices of those interviewed, enabling us to suggest potential avenues for promoting good practice and/or for supporting improvement where required.

Recommend useful activities, and highlight any issues that need more investigation, to improve decision-making for NRM in the cropping sector.

We have provided a preliminary analysis based on current thinking around adoption and non-adoption of NRM practices, particularly the socio-cultural, economic and personal factors involved in 5 landholder decision making (e.g. see Pannell et al, 2006 ).

Apply the findings in the development of an NRM extension strategy for the cropping sector, recommending which activities and approaches are best suited to the sector, and why.

We involved key industry stakeholders and relevant Cradle Coast NRM staff in a workshop, which helped build relationships and local knowledge around practice change theory for agriculture. An outline of the workshop is provided separately in Report 3: Extension Workshop Report.

Interviews with landholders and key organisations We conducted 40 interviews with participants from a range of cropping enterprises in the region, as shown in Table 3. The interviews were all face-to-face and held on-farm or on-site (except for one phone interview). They were around 1 to 1.5 hours long. All interviews were held with the decision maker/s of the particular enterprise.

Table 3: Number of interviews conducted during the research Group represented

Number of interviews

Vegetable packer/processors

7

Poppy processors

3

Pyrethrum processors

1

Agronomy advisors

3

Private landholders

26

TOTAL interviews

40

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Pannell D, Marshall GR, Barr N, Curtis A, Vanclay F and Wilkinson R (2006) Understanding and promoting adoption of conservation practices by rural landholders. Australian Journal of Experimental Agriculture. 46: 1407-1424.

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Landholder selection process This study focused on large, commercial landholders in the region. This approach provided a high degree of efficiency, ensuring the greatest coverage of land area possible within the time and resources available. In effect, this enabled us to include more than 8000 ha of privately owned/leased land in the research. Figure 1 shows the total distribution of land sizes (ha) potentially used for cropping throughout the region.

500 450 400 350 300 Number 250 200 150 100 50 0

Size (ha)

Figure 1: Distribution of land sizes (ha) potentially used for cropping in the Cradle Coast NRM region (source: Office of the Valuer General, December 2010) Figure 1 also shows the small number of large, commercial sized properties (about 70 land parcels above 150 ha) and the significant number of small parcels of land (about 470 under 50 ha). Cradle Coast NRM already cater for this segment of the rural community through other activities such as production and distribution of the Rural Living Guide (2010) and smallholder field days like this year’s Rural Living Round-Up, which attracted some 500 participants. Similar activities are planned for the current financial year.

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Appendix 2: Local use of recommended practice We asked participants about their use of a range of locally relevant farm practices or tools. Table 4 shows the frequency of their use by the group (collectively), and the primary NRM asset (Land, Water, People or Biodiversity).  Rarely = most participants do not use the practice/tool;  Often = most participants sometimes use the practice/tool;  Widely = most participants do use the practice/tool.

Table 4: Local use of recommended practices and the NRM assets implicated NRM assets Practices Erosion control methods

Land

Water

People

Biodiversity

Widely

Riparian fencing

Rarely

Controlled traffic farming

Rarely 6

Soil structure score card

Rarely

Regular soil testing

Widely

Soil health monitoring

Rarely

Crop nutrition monitoring

Widely

Native shelterbelts

Rarely

Stubble/crop residue retention

Widely

Cut off drains

Widely

Grassed irrigator runs

Rarely

Linear/centre pivots

7

Widely

Cover / green crops

Widely

Bringing in organic matter

Widely

8

Direct drilling

Often

Nutrient budgeting

Widely

Irrigation scheduling

Widely

Soil moisture monitoring

Widely

Integrated pest management

Often

Whole farm planning

Widely

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Some landholders interviewed were aware of the soil structure score card but felt they did not need to use it anymore The now widespread use of linear and pivot irrigators has reduced the use of grassed irrigator runs throughout the region 8 In this case, an equal number of landholders reported both regular use and occasional use of organic amendments (e.g. poppy mulch, compost, biosolids) and together these account for the category being rated as ‘widely’ used 7

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Appendix 3: Project recommendations in full Working within the operational context 1.

That Cradle Coast NRM works with industry leaders (e.g. the Tasmanian Agricultural Productivity Group, TAPG) and the media to improve public understanding of the high level of land management knowledge and experience within the cropping sector by profiling leading landholders and companies and celebrating their achievements.

2.

That Cradle Coast NRM becomes a member of the TAPG and plays an active and ongoing role with the Group to enhance engagement and relationship building with this important organisation.

This should also extend to engaging regularly with industry staff throughout the packer/processor and agribusiness companies, who can be useful allies in raising awareness of the benefits of integrated land management with cropping landholders.

3.

That Cradle Coast NRM builds on these new relationships with industry and together develops a concise sustainable cropping ‘code of practice’ to align industry and NRM goals. This should include investigating the dairy industry strategic plan, TFGA initiatives and other existing industry models to look for principles that could be adopted. It will be important to avoid duplication, and to develop a unified plan for the entire cropping sector.

4.

That Cradle Coast NRM gets involved in and/or develops training programs for advisors, linking in and adding to what is already happening with a focus on improving the understanding of the value of NRM for agriculture, and building people and leadership skills.

Good planning and program development 5.

That Cradle Coast NRM invests time and resources in effective program planning before delivering activities assumed to effect change. This includes first assessing if a practice or innovation is actually ‘adoptable’ (Pannell et al, 2006). It should also include appropriate 9 prioritisation and choice of policy mechanisms (Pannell and Roberts, 2010 ), consistent with Pannell’s (2008) public / private benefits framework.

6.

That Cradle Coast NRM also continues to apply the approach used in this research with other farming sectors in the region including dairy, beef/sheep and perennial horticulture. As we have shown, this forms an essential part of effective program development for achieving conservation outcomes on-farm, through improving understanding of the issues and building credible relationships with the intended audience. As landscape-scale change takes time, programs must be based on local knowledge and local needs and will need updating over time to maintain industry relevance and encourage engagement.

Celebrate success 7.

That Cradle Coast NRM continues to work with the media and industry leaders like TAPG to celebrate good practice, highlighting some of the following elements:  Landholders know their soils well and work hard to protect them  On-ground change has been achieved particularly in relation to reduced tillage (e.g. one-pass cultivation) and protecting soils from erosion (using rip or rip/mulch techniques or green manures as cover crops)

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Pannell DJ and Roberts AM (2010) Australia’s National Action Plan for Salinity and Water Quality: a retrospective assessment.

The Australian Journal of Agricultural and Resource Economics 54: 437-456.

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 There appears a steady and growing interest in integrated pest management (IPM) by both landholders and packer/processor companies  Landholders are very keen to reduce inputs like pesticides and fertilisers  New varieties (e.g. some potatoes and poppies) often increase fertiliser and water use efficiency and require less spraying  Farmers deserve to feel rewarded and acknowledged by the general public; farming has much more social meaning than most other occupations, and they have tremendous passion for their work  Many services we enjoy as a community would not be available without a vibrant agricultural sector.

8.

That Cradle Coast NRM also acknowledges and celebrates the role of senior advisors (in agribusiness as well as those employed by packer/processors) in supporting integrated farm systems, or on-farm conservation practices, by sponsoring an Agronomist or Advisor of the Year award.

9.

That the erosion control message is actively supported and/or coordinated by Cradle Coast NRM, to add value to previous investments (e.g. ripper mulchers) and reinforce the high level of awareness and adoption throughout the cropping sector. Without improved coordination (to resolve OH&S, access to machines and ongoing maintenance), we risk a decline in what has been regular and ongoing use of erosion control methods throughout the region. Cradle Coast NRM may also be at risk of reduced credibility through a perceived lack of action or continuity in this well-known program.

10. That Cradle Coast NRM continues to promote and advance controlled traffic farming (CTF) for the cropping sector. While local uptake of CTF is in its infancy, many are watching industry and research developments with great interest. At this stage, the focus should be on maintaining momentum; the benefits to soil health, reduced energy use and time savings are probably well enough known, but the logistical issues require leadership at industry level. Cradle Coast NRM can build credibility by actively working with the TAPG, the Tasmanian Institute of Agricultural Research (TIAR) and agronomists to maintain the CTF profile.

11. That Cradle Coast NRM finds (or produces) and uses objective evidence for the win-win of environmentally sustainable farming for NRM and business health.

12. That Cradle Coast NRM celebrates its own success and efforts that have provided valuable support to the agricultural community.

Support improvement 13. That good soil management remains a priority area for Cradle Coast NRM extension activities, but also includes explicit links to integrated land management through training to improve decision-making, marketing capacity and business management generally. Including business skills and decision-making in extension activities around soil management will help landholders assess the potential trade-offs between short rotations and long-term farm profitability. This will help improve landholder confidence with some aspects of the contract-cropping culture.

14. That awareness-raising activities around the benefits and varied roles of native vegetation (e.g. shelterbelts) are a priority for Cradle Coast NRM. Not all landholders understand or appreciate the problem of reduced biodiversity, and not all landholders will implement native plantings on their farm, for a range of legitimate reasons. Better depiction of possible ‘early warning signs’ may be an appropriate way to raise awareness. Small-group site visits to existing shelterbelts (on

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commercial farms) would be a practical way to communicate the impacts and benefits. These activities should clearly explain design options, offer alternative species mixes (not all native), and clearly highlight the production benefits wherever possible, particularly wind protection.

Linking biodiversity with IPM would also be helpful. Acknowledging the practical limitations of native vegetation on commercial farms (e.g. how to manage planting and address weeds) is also important in delivering a credible message about on-farm biodiversity.

15. That Cradle Coast NRM reinvigorates property management planning (PMP) as an integration of farming into landscapes. As was suggested in an earlier review of the PMP program, an holistic approach is required, both conceptually and for delivery. The current research found that PMPs have been adopted in the cropping sector, but the resultant plans are not regularly consulted, nor have any plans since been reviewed or updated. The integration of productive and nonproductive areas on the farm (interactions between both) has not been part of PMPs so far, nor have many aspects of business management. Cradle Coast NRM could deliver integrated property management planning as a training course to build engagement and shared learning between participants, providing opportunities to incorporate improved decision-making, planning and business skills in addition to the required assessments of land, water and biodiversity. It may help to promote the training at different levels, from entry through to ‘master class’ to increase interest, build capacity and promote a sense of exclusivity. Guidance on reviewing and updating plans should also be included.

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