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Agribusiness role in extension, education and training – a case study

Gordon Stone

PO Box 7642, Toowoomba MC Qld 4352


Agribusiness has a crucial role to play in informing and building the capacity of increasingly innovative farmers. After reviewing six industries in one region to determine farmer needs and the ability of agribusiness to support those needs, it was concluded that agribusiness has largely supplanted previous government extension roles. Agribusiness is defined as an organisation that generates income from the sale of a product or service – and this definition now applies to a wide range of individuals and organisations who aim to take part in the extension and capacity building role vacated by governments. Increasingly agribusiness is undertaking R&D work – and is becoming a major information conduit, information consolidator and adviser to farmers.

This paper outlines a RIRDC/CVCB funded research project and reflects on the meaning of results. It intended to stimulate discussion on the major role of agribusiness in capacity building in Australia. In that research project farmers were grouped into Innovative Farmers (top 20% in terms of production / value of production), Followers (a middle 60% of farmers some of whom aspire / will become Innovators) and Traditional Farmers (lower 20% who resist change and have smaller outputs overall). Innovative farmers across all rural industries have very defined needs in terms of accessing agribusiness for information and advice – and are prepared to pay (what they consider to be) fellow professionals at market rates. Traditional farmers have yet to come to grips with this change and the need to pay – while Followers have different relationships again and increasingly accept the need to pay.

Three key learnings: (1) In northern NSW and southern Queensland, and across six rural industries, agribusiness has largely supplanted government extension as the major force in capacity building. (2) Increasingly, agribusiness is undertaking R&D work and so should be part of the feedback loop to RD&E providers. (3) Because of the two previous points, agribusiness has the capacity to (and does) act as an information conduit from farmers back to researchers and decision makers – but has a series of human capacity limitations that affect its future.

Key Words

Innovative farmers, information dissemination, advice, extension providers


As principal of a management consultancy working predominantly with the rural sector since 1991, the author has managed a series of technology transfer and adoption programs in the meat and livestock, grain, horticulture and irrigation sectors around Australia. While the most significant input to these programs has been from state government services and Research and Development Corporations (RDCs), an increasing role has been played by agribusiness. Many of these programs have been characterised by the strong involvement of local farmer groups (all rural industries). Their role is to identify their peers information needs – and these have then become the priorities for the technology transfer activities.

A distinct transition has been noted over the last decade. This transition covers two areas:

  • who farmers look to for information and advice, and
  • who delivers that information and advice in a form that farmers feel is most relevant to their needs.

Initially farmers looked to government agencies as the repository of all things technical. Governments – especially state departments of agriculture – were regarded as a one-stop shop. What they did not know seemed not worth knowing. Generally agribusinesses were invited to attend these activities as a part of the community, rather than due to their specialist knowledge.

More recently state government extension services have been gradually curtailed. Agribusinesses have started to fill the gap – and become more professional and focussed in their presentation of data and the practical application of relevant on-farm management strategies. Increasingly a stronger technically relevant and farmer friendly presentation model appeared where leading agribusinesses embraced an increased role to. This included presenting technical data in a form that farmers readily related to – and in many cases undertaking research and development (R&D) and the extension of the results.

It has been noted that there is a pronounced trend for farmers groups involved in technology transfer to look to agribusiness as a higher priority source of technical and management information.

It appears that little is formally recorded in a strategic sense about the role of agribusiness in capacity building. In fact it seemed that little baseline information is known. Hence it could be argued that many funding and technology transfer and extension decisions are based on an outdated paradigm where state governments were the key information and advice provider.

It was proposed to the Cooperative Venture for Capacity Building (CVCB) that such baseline data was needed. Funds were sought and granted by CVCB in June 2005 for a project designed to gain initial insight into this matter.

Evolution of the project research process

The aim of this project was an initial examination of the role of agribusiness in capacity building in Australia. The purpose was firstly, to understand the current role and structure of the agribusiness sector in capacity building for rural innovation and, secondly, to identify factors influencing how that role and structure might change in the future.

Rather than attempting an Australia wide examination, it was proposed that a representative area be sought for the project. A study area covering southern Queensland and northern NSW was identified as representative of a number of industries with sufficient diversity of circumstances to give broad insights into key issues. Data were gathered from the meat and livestock, dairying, wine, grain, horticulture and sugar industries. Input was sought from farmers and agribusinesses.

Proposed project process.

To achieve the objectives of the project, the proposed research process was to:

  • Undertake a literature review – to determine the current status of knowledge about the agribusiness contribution to capacity building and map the sector along with influential factors / people
  • Undertake a mix of face to face and phone interviews to obtain data from a clearly defined range of farmer users of agribusiness services – to seek input to the current contributions that agribusinesses provide to their personal capacity building, as well as their view on the influential factors and future potential of the sector. These farmer cooperators were to include a number of farmers known to the author who would provide frank and broad industry views.
  • Undertake a mix of face to face and phone interviews to obtain data from a clearly defined range of agribusiness co-operators – to seek insights into their current and future goals, objectives, contributions and limitations re capacity building and their perspectives on influencing factors – including people and / or issues and / or forces. The co-operators were proposed as principal agribusiness suppliers to the farmer cooperators. Again the objective was to access frank views.
  • Validate interview findings and provide quantitative data – using a web survey
  • Analyse data – to draw conclusions on the issues explored
  • Prepare a Discussion Paper – for circulation to key CVCB workers, and
  • Produce a final report and presentation – to members of the CVCB.

Actual project process.

A range of factors impacted on the proposed process:

  • Little information could be located in the literature – further confirming that at a research, institutional and policy level little is known about this issue
  • Some key concepts did emerge from the literature – and the findings of this project generally supported those concepts
  • Both farmers and agribusiness representatives are time poor – so most preferred a telephone interview process to face to face interviews
  • It proved necessary to interview both farmers and agribusiness representatives in a relatively unstructured way initially – to find out “the questions to ask” so that further detail on these key issues could be sought. This was an organisational challenge.
  • The project timing meant that much of the interviewing took place around the Christmas period – exacerbating the time poor nature of respondents
  • As a general rule - if a respondent could not be contacted after the fifth phone attempt – then they were not pursued
  • The low electronic literacy and time paucity of respondents – resulted in a poor response to the web survey
  • Overall 33 farmers and 30 agribusiness representatives were interviewed during the project
  • Many agribusiness personnel were constrained on being interviewed due to company policy issues – and some referred interviews to senior staff who proved too busy to actually interview
  • Others were interviewed on the basis of anonymity
  • A range of agribusiness input was sought – from single agronomists to senior managers of national reseller organisations to technical representatives of product suppliers
  • Many agribusiness personnel service more than one industry – and commented about several industries in a comparative sense when interviewed
  • Many of the farmers were or had been industry leaders – and as such were in touch with broader industry trends and circumstances. Accordingly they provided broader industry insights than just their own circumstances. Many of these by their very nature were leading and innovative farmers
  • Increased general wariness of surveys was noted – although introductions from personal contacts generally helped reduce the concerns of respondents.

Although this process was somewhat convoluted, it was noted that there was repeated reference to, and validation of, some key issues among respondents, as well the emergence of some specific and unique issues on an industry by industry basis.

Key findings of the research project

The following issues were identified and have been collated into a number of key areas of interest.

Agribusiness in the literature

The issue of agribusiness’ practical role in capacity building is largely unaired in the research or development literature in Australia. There are only fragmented and generalised references to overall theoretical concepts, rather than findings based on research and measured outcomes.

Information delivery model.

The role of agribusiness in capacity building and extension is largely unaddressed through the literature, at a policy and structural level in terms of professional, industry-wide thinking about activities, implications and future development and management.

A range of practical, operational models are emerging to meet farmer demand for information and advice. These are listed below. Related key issues are also listed.

  • Grower-directed information supply groups are emerging and provide an increasing unbiased source of technical information.
  • Consultants generally provide honest broker advice and information – and have a role in synthesis of information.
  • Grower directed agribusiness (the packhouse model) is emerging as a significant capacity building process in horticulture.
  • A number of agripolitical organisations are metamorphosing and taking on aspects of capacity building as additional roles.
  • While the Department of Primary Industries and Fisheries (Queensland) and the (then) NSW Agriculture organisational role generally declines, individual staff still retain high credibility and remain a strong information conduit.
  • The Subtropical Dairy Program provides an honest broker, industry directed information supplier model in the dairy industry. Similar grain and meat and livestock models exist.
  • There are some novel and exceptional advisory and consulting services operating in the livestock industry in the study area – these go against the norm of minimal use of consultants in that livestock industry.
  • The Internet is becoming a useful means of communication and accessing honest broker information – its limitation is accessibility to good ISP services and farmer knowledge on its use.
  • Agribusiness has a role as a catalyst for change in a range of information delivery methods. A particular role is regarding electronic communication and Internet-based information delivery processes.
  • Reseller specialist advisers can be considered part of the process of cross-fertilisation of ideas from industry to industry.
  • Industry training is a key means of informing producers about issues but it has yet to reach its potential and is in danger of failing and robbing traditional producers of a useful low level source of information if government subsidies are withdrawn. The financial support of FarmBis also has a significant impact on that part of agribusiness catering to the more traditional farmers.

Succession planning and professional development

A series of issues (reported in an industry context as well as a broader context) were defined:

  • Succession planning (and upskilling) to ensure a supply of skilled honest broker advisers for the future is a priority and clearly is not being addressed in the eyes of farmer clients.
  • Professional development of agribusiness is generally undertaken at an adhoc level. While the importance of professional development is widely acknowledged little coordinated effort exists. The benefits of a coordinated approach could be explored. The alternative is to allow free market forces to apply. Some form of accreditation is an option.
  • The issue of high levels of staff turnover and general professional development for more junior staff is an issue for agribusiness.
  • There is a question surrounding the ability of consultants working in the area to access enough work to remain viable – for example specialists are needed in the wine industry to fulfil a range of functions, including viticulture and oenology.
  • Accountants reported a need for, and inability to access, skilled business focussed professionals to service rural industry.
  • In regional areas the low skill levels and comparatively lower quality of all staff, including business advisory staff such as accountants and lawyers, adversely affects the high level decision making required of Innovative Farmers in the increasingly global marketplace.
  • The knowledge power in some industries is vested in a small number of growers, advisers and resellers.

Role of agribusiness as advisers

Issues emerging on roles played by agribusiness advisers in the study area included:

  • Agribusinesses take a very segmented approach to their client base, to the extent of recognising that larger corporate entities have to be approached using one strategy while smaller and multi-enterprise farms may have to be approached using another strategy.
  • The results indicated that connection between RDCs and agribusiness is not strong – and it is regarded as a discontinuity between the front line advisers and the funders of the development of new technology.
  • A trend is emerging that consultants will be the primary advisers in future, displacing resellers who are expected to have a more limited role.
  • Further consideration of the implications of market/company aggregation and closed-loop marketing potential on knowledge management is needed to understand the full effects that this might have on agricultural knowledge management. It should be noted that this fits with the desire of farmers to assure themselves of access to “honest broker supplied information”.
  • Anecdotally, some product inventories are reported as being stocked, based on their level of profitability to the reseller, as much as if not more than, on their functional value to the end user.
  • Government, through landcare, RDCs and some government services, continues to foster “free advice” or “a bit of user pays”.
  • Successful farmers are able to access, interpret and apply a smorgasbord of information at a holistic business level. The vital roles of agronomists, consultants and some accountants are to facilitate that process and, in many cases, interpret and make available new technology, ideas and concepts, so farmers can make the best decisions about applying that technology.
  • Farmer directed groups are spontaneously appearing and disappearing. They are new agribusiness organisations that supply unmet demand for information. Market forces govern their survival.
  • Some farmers are prepared to pay the same amount to high quality consultant advisers as they would to conventional city based professionals; while others are not.

Innovative farmers.

Innovative farmers (the top 20%) are those who operate in a globally focussed business environment and concentrate on “doing business”. They rely heavily on “honest brokers” that are mostly fee-for-service consultants and have no pecuniary interest in the information and advice provided. They see these honest brokers as being information consolidators and advisers in the true sense of the word and value their advice as one professional to another. They are prepared to pay accordingly.

Innovative farmers distinguish readily between “information” and “advice”. Information is also being increasingly provided by farmer-directed groups, which seek out relevant information and deliver it according to group and member preferences.

Innovative farmers are wary of resellers and believe that their advice often has “strings attached”. However, they will use resellers for a second opinion to help confirm their thinking or decisions.

Traditional farmers.

Traditional farmers are having real trouble accessing information and advice, especially because they are not willing to pay. Government services have largely disappeared, with the exception of the landcare type services, which have become surrogate, free government services. Traditionalists are scurrying to use them.

The role of resellers is important for this group as these farmers don’t recognise they are paying for the advice through product or service costs, or simply choose to ignore that these costs are built in. The more innovative farmers question whether these traditional farmers are getting the best possible advice.


Agribusiness is defined as a person or organisation that generates income from the sale of a product or service or both, which facilitates the decision making of a farmer or land manager. For the purposes of this project the interest in agribusiness related to their role as suppliers of information or advice. It was noted that agribusiness effectively functioned as synthesisers of information so that it becomes available in the most useable form for agribusiness’ own use when interacting with clients.

Today’s agribusiness includes consultants, trainers, accountants, associations, reinvented producer organisations, farmer-directed groups, resellers and their product suppliers, privatised or semi government organisations, banks, advisers on insurance and superannuation, marketers, and seed companies. All these people and organisations work to support farmer decision-making in exchange for money, either directly as a fee for service or indirectly through costs of service being built into the supply of products or services.

In this context, the Paretto Principle (Management About 2005) or 80:20 rule, is alive and well. Simply put, this principle holds that 80% of business comes from 20% of clients – or in rural industry 80% of the product value is produced by 20% of the farmers. Some in agribusiness argue that there is a 90:10 rule. Others argue that it is more like 20:60:20 – meaning that there is a middle group, some of whom contribute very significantly to quantity and value of product output while others tend to imitate the 80% of farmers who produce 20%. Agribusinesses have applied this principle by identifying A (called Innovative Farmers in this project), B (called Followers) and C (called Traditionalists) clients, with C clients being unprofitable and actively discouraged.

Payment for services.

As outlined earlier, fee for service, offsets from the sale of product or a mix of both characterise how agribusiness obtains its income for sale of information / advice. Conscious decisions are made on the return for effort on these activities.

Agribusinesses are asking why free or subsidised government services exist when governments appear to have actively withdrawn from extension and why RDCs also are supporting these services in some cases.

Equally, they are questioning why RDCs fund projects developed by the remaining government services when agribusiness believes that those research and extension personnel are largely out of touch with their clients and, conversely, it (agribusiness) is in close touch. They question whether there wouldn’t be better value for money in focussing on supporting those consultants and contractors who are actually “doing it” at the “coal face”.

Human capacity – a key issue for agribusiness.

The age and experience of advisers is an issue for innovative farmers, who are wary of advice given by advisers they see as being young and inexperienced and without practical or life experience. They see that a 10-year apprenticeship is needed before they trust an adviser with making decisions that could have big financial implications.

Agribusiness also acknowledges that ageing of the adviser population and the professional development of these advisers are issues that need attention.

As current farms pass onto the next generation, who are more likely to be computer and business literate than their parents, and as corporate enterprises expand, a question must be posed. That is, where is the next generation of advisers to service these innovative farmers coming from?

These are the honest brokers of the future, those young people who need to be mentored through their 10-year apprenticeship. This assumes that independent firms will fulfil the role of mentor (most can’t afford to do this) and that young people will be interested in careers in agriculture in the first place.

More often than not, these young people start in the city on higher salaries than they would in regional areas. If they start in regional areas and are suitably skilled, they will most likely be attracted to the city. Coutts et al (2004) report on this in more detail.

This phenomenon will cause a predictable human capital crisis. As a result, the emerging, vibrant, business-like farming operations expect to have trouble, in the mid-term, accessing reliable advice from suitably skilled advisory personnel. If they can find these skilled advisers, they appreciate that such advisers will expect similar remuneration to their city-based counterparts.

Once again, agribusiness operators of today acknowledge this emerging issue as they strive to meet the increasingly sophisticated needs of their customers. They can forecast the needs of their customers but see trouble in finding and paying for the staff to service them.

It is expected that the human capacity issues will start to have an impact in 5 years as older more skilled and experienced advisers commence to retire. In 10 years the problem will be more pronounced once these advisers have largely retired and more experienced younger advisers become managers in the larger corporations.

Role of agribusiness in capacity building.

The continued evolution of agribusiness’s role in capacity building is likely to encompass:

  • Facilitating the honest broker process so farmers can be sure they are getting the right information and the right advice to fit their needs
  • Continued emergence of farmer-directed honest broker groups which can assist in both information and advisory roles
  • A transition to full fee-for-service in 5 to 10 years for most information being supplied
  • A decline in reseller advisers in favour of honest broker consultants – as long as the personnel are there to service those needs
  • Further development of the one-stop-shop concept – through alliances and more agribusiness-to-agribusiness support
  • The need to address issues associated with closed loop marketing – where information is retained within organisations for commercial benefits
  • Professional development of advisers, along with possible accreditation
  • Considerable attrition of traditionalist farmers in part due to their inability to access advice and information
  • Short-term assistance for some laggard industries, like livestock, to facilitate their transition to full user pays services or to allow market forces to prevail completely.

To aid understanding of the current advisory and information processes operating with agribusiness, Figure 1 – The Advisory Hub – derived from the research findings, is intended to provide insights.

Figure 1 – The Advisory Hub


There is currently a mix of fee for service, product subsidised cost recovery and free of charge information dissemination and advisory systems operating in agribusiness. While recognising the role of free market forces, state and federal governments, RDCs and landcare/catchment management organisations will need to consider their policy positions and make informed decisions on whether full or partial user pays will operate in agriculture. This will assist in the creation of clear market signals on the issue.

Key decision and policy makers also have to become aware of the various issues about financial returns and human capacity confronting the honest brokers in rural industries – to determine whether it is an issue for them to act. Issues including the proprietal knowledge ownership and the special community-good interest in land stewardship are important in these considerations.

The use of agribusiness extension specialists (who operate commercially on-ground) to disseminate R&D results and to provide input into extension programs and priorities for R&D work requires consideration by RDCs. (This has become the focus of a second research project which is currently underway).

Because of the unknown nature and status of agribusiness advisory and extension personnel currently operating, the whole issue of future human capacity requires further investigation. Due to the current trend towards use of agribusiness personnel as key information conduits, synthesisers and advisers, these personnel become a limiting factor in the growth of agriculture. Therefore some form of baseline survey, to define the training and professional development activities and needs of agribusiness, is needed Australia wide. The importance of this status report is to assess the level of technical competence of its personnel, then how to maximise that competence and then how to retain a threshold of competence at a level yet to be defined.

Accordingly because of the critical nature of the personnel issues confronting agribusiness, the age structure; potential career paths; relative salaries, experience and expertise of advisers also ought to be further examined so that the likely deficiencies can be forecast and decision-makers informed.

In terms of attracting younger personnel to fill these niches, the project “Strategy to attract young people to horticulture”, has agriculture-wide implications, and it behoves decision-makers to address its findings in the wider context.

Challenges with the transition from free government-provided services, to an agribusiness fee-for-service model include

  • Establishing a feedback loop on RD&E outputs and research priorities from providers to these new front line advisers,
  • The age structure of advisers and an emerging human capital crisis in 5-10 years,
  • The question of impartiality and the need for “honest brokers” in this information / advisory process,
  • The different needs of the younger emerging business focussed farmers from older Innovative Farmers ,
  • Skill levels of professionals in rural and regional areas, and
  • The dominance of several agribusiness operators in the field.


Coutts J; Stone G; Casey M and Coutt, A (2004) Strategy to attract young people to horticulture; Final Report, March 2004. (including Business Plan, Scoping Paper and Web Survey Results), Horticulture Australia Limited, Project Number AH02021.

Management About (2005). The Parento Principle. generalmanagement/a/Pareto081202.htm. Accessed December 2005.

Stone G (2005). Agribusiness Role in Extension, Education and Training: a Case Study. A Report to the Cooperative Venture for Capacity Building, June 2005, RIRDC Publication No 05/086, RIRDC Project No GSA-1A, Canberra.

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