Decision-making and resilience in agriculture: improving awareness of the role of accounting

Joanne Louise Tingey-Holyoak, Sarah Wheeler and Constantin Seidl

Meditari Accountancy Research, 2023, vol. 31, issue 6, 1735-1756

Abstract: Purpose - Australian agriculture is facing increasingly uncertain weather patterns which is impacting financial performance, exacerbated by worsening terms of trade and a decline in commodity prices. Increasing the resilience and adaptive capacity of the primary production sector is of key importance. Governments and farmer groups often depict technology adoption as the salvation of farming, frequently ignoring the importance of decision-making processes and soft information skills and needs. The purpose of this study is to explore farmer decision-making and resilience and, in doing so, address ongoing challenges with soft information, including the inaccessibility of accounting data and a lack of awareness of its formal role in strategic decisions. Design/methodology/approach - Drawing on a strategic choice perspective, we explore the links between farmer characteristics, attitudes, technology orientation, decision-making and financial performance to investigate how accounting data and tools could better support growers’ adaptive capacity. Detailed on-farm interviews were conducted with 25 grape growers across the Riverland in South Australia, with information thematically and descriptively analysed. Findings - Results show that farmers with low operating profit margins spend double the time making decisions and struggle with minimising variable costs, especially water costs. Lower profit growers were also less likely to perceive climate change as a threat and demonstrated lower resilience. Originality/value - The results highlight the potential for accountants to make more use of data-driven technological advances and for this information to be used to enhance on-farm strategic decision-making and support innovative business models. Simply packaged biophysical and financial data could also support strategic decisions and adaptation of farmers struggling to make a profit.

Keywords: Strategic choice perspective; Irrigation; Riverland; Farm profitability; Farm accounting (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:medar-05-2022-1679

DOI: 10.1108/MEDAR-05-2022-1679

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