Managing Complexity in Modern Farming

Ross S. Kingwell

No 59090, 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia from Australian Agricultural and Resource Economics Society

Abstract: Modern farming in Australia is no longer simple. Farms are large, multi-enterprise businesses underpinned by expensive capital investments, changing production technologies, volatile markets and pervasive regulation. The complexity of modern broadacre farming leads to the question: what is the nature of the relationship between farm business complexity and farm profitability? This study uses bioeconomic farm modelling and employs eight measures of complexity to examine the profitability and complexity of a wide range of broadacre farming systems in Australia. Rank order correlations between farm profitability and each measure of complexity show inconsistent relationships, although the most profitable farming systems are found to be reasonably complex on several criteria. Among the set of highly profitable systems are found some characterised by less complexity. Using the farmer’s annual hours worked as a measure of complexity that affects current farm management, the trade-off between profit and this measure of complexity is found not to be large. A case is outlined where the farmer’s annual hours worked could be reduced by 9 percent for a 3 percent reduction in farm profit. If farmers’ workloads are proving problematic now and in the future, then agricultural R&D, service delivery and policy development will need to focus much more on being highly attractive to time-poor farm managers.

Keywords: Farm; Management (search for similar items in EconPapers)
Pages: 31
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare10:59090

DOI: 10.22004/ag.econ.59090

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