Broadacre farmers adapting to a changing climate

Abstract Data on the financial performance of a diverse set of 249 farm businesses in south-western Australia over the period 2002 to 2011 was collated and analysed. These 10 years were a period of challenging weather years, underpinned by a warming and drying trend in the region’s climate, frost events and marked price volatility. Based on a range of metrics, almost two-thirds (64%) of the farms in the sample were classed as growing or strong. A less secure group of farms that are at some potential financial risk formed 15% of the farm sample. Over the study period farm profitability, on average, improved, supported by productivity growth, in spite of no underlying improvement in the farmers’ terms of trade. Productivity improvement allowed most farm businesses, especially crop and mixed enterprise farm businesses, to prosper. The pathway to their profitability was not so much by investing in new technologies that may have shifted outwards farms’ production possibilities, but rather through better use of existing technologies, including technologies that offered scale economies. Also farmers’ shift into greater dependence on cropping, especially wheat production, was shown to be a sensible and successful adaptation strategy in many regions of south-western Australia, particularly the northern grainbelt. The unique and particular characteristics of each farm business were the main determinant of their business success. However, a few generalisations apply. Due to seasonal and market conditions during the study period more farms in the northern parts of the grainbelt in south-western Australia fared better. Also farmers whose businesses grew strongly over the study period on average displayed superior management capabilities and choices in many areas of farm management. In addition, these farmers were often more connected to their local community and achieved greater work-life balance. We conclude that as long as broadacre farmers in south-western Australia have on-going access to improved crop varieties and technologies that support the profitable growing of crops, especially wheat; and that they have access to farm management and business education then farmers are likely to be able to adapt to projected climate change. Provided that a farmer’s terms of trade does not become unduly adverse, and that farmers sensibly manage farm debt, then it seems highly likely that farmers who continue to rely on crop production, mostly wheat-growing, will persist as financially sound businesses in most parts of the study region, even in the face of projected climate change. Please cite this report as: Kingwell, R, Anderton, L, Islam, N, Xayavong, V, Wardell-Johnson, A, Feldman, D, Speijers, J 2013 Broadacre farmers adapting to a changing climate, National Climate Change Adaptation Research Facility, Gold Coast. pp.171. Data on the financial performance of a diverse set of 249 farm businesses in south-western Australia over the period 2002 to 2011 was collated and analysed. These 10 years were a period of challenging weather years, underpinned by a warming and drying trend in the region’s climate, frost events and marked price volatility. Based on a range of metrics, almost two-thirds (64%) of the farms in the sample were classed as growing or strong. A less secure group of farms that are at some potential financial risk formed 15% of the farm sample. Over the study period farm profitability, on average, improved, supported by productivity growth, in spite of no underlying improvement in the farmers’ terms of trade. Productivity improvement allowed most farm businesses, especially crop and mixed enterprise farm businesses, to prosper. The pathway to their profitability was not so much by investing in new technologies that may have shifted outwards farms’ production possibilities, but rather through better use of existing technologies, including technologies that offered scale economies. Also farmers’ shift into greater dependence on cropping, especially wheat production, was shown to be a sensible and successful adaptation strategy in many regions of south-western Australia, particularly the northern grainbelt. The unique and particular characteristics of each farm business were the main determinant of their business success. However, a few generalisations apply. Due to seasonal and market conditions during the study period more farms in the northern parts of the grainbelt in south-western Australia fared better. Also farmers whose businesses grew strongly over the study period on average displayed superior management capabilities and choices in many areas of farm management. In addition, these farmers were often more connected to their local community and achieved greater work-life balance. We conclude that as long as broadacre farmers in south-western Australia have on-going access to improved crop varieties and technologies that support the profitable growing of crops, especially wheat; and that they have access to farm management and business education then farmers are likely to be able to adapt to projected climate change. Provided that a farmer’s terms of trade does not become unduly adverse, and that farmers sensibly manage farm debt, then it seems highly likely that farmers who continue to rely on crop production, mostly wheat-growing, will persist as financially sound businesses in most parts of the study region, even in the face of projected climate change.