A recent pilot program run in SA has improved the financial literacy of local grain-growing businesses.
The Grains Industry Farm Business Strategic Review program engaged 40 grain farming families in SA this year with the aim to improve their on-farm productivity, profitability and work-life balance.
A recent review of the program by independent economist EconSearch found that almost 90 per cent of its participants had improved at least one aspect of their financial literacy, while more than 70pc were confident they were now equipped with learnings to increase their farms’ profitability over the next 10 years.
EconSearch also said the program had delivered “a strong, positive outcome, driven by significant cost savings and elevated levels of on-farm investment”.
Participants estimated that as a result of the program their combined cost savings would be an estimated $1.9 million and the combined investment in farming businesses an estimated $7.9m over the next 10 years.
The program used a new approach to encourage family farming businesses to step back from day-to-day production issues and focus on the big picture.
It followed similar pilot programs delivered by Rural Business Support to farming families in the dairy and pork sectors between 2016 and 2017.
Regional group workshops were held at Clare, Wudinna and Keith in March, before RBS farm business analysts and private sector consultants made on-farm visits to engage with farmers directly.
RBS chief executive officer Brett Smith said early engagement was key to the program’s success.
“Through RBS’s experience in delivering the Rural Financial Counselling Service, we know the value of meeting with farming families at their kitchen tables,” he said.
“We sit down with them to talk privately and confidentially about their business, in the context of current family circumstances and future plans, before we work with them economically.
“The program helps them to put their figures into perspective – to clearly identify how their business is going, relative to industry benchmarks and what their opportunities are.
“It empowers families to adopt best practice, which in turn enables them to develop preparedness and resilience to deal with demanding adverse circumstances.”
New web tools were also used to help families develop a strategic action plan.
Grain Producers SA chairman Wade Dabinett said financial literacy was a vital component of achieving viability and sustainability.
“We want to help our members to develop a better understanding of their financial and strategic position,” he said. “This can then support timely decision-making, investment in new technology and systems which in turn will lead to increased profitability.
“As SA grain producers contend with the poor season conditions, programs aimed at improving financial literacy will be an essential part of any drought support package.”
GRDC Southern Region grower relations manager Darren Arney said it was important that growers took the time to frequently review business performance and develop a long-term strategy based on personal circumstance, individual goals and sound financial advice.
The program was developed through a successful partnership involving RBS, GPSA, GRDC, PIRSA and private sector consultants.