Bring it back

Extracted from the Farm Tender weekly Newsletter - Sign up and get the email every Wednesday morning before 6 am. www.farmtender.com.au

By Dwain Duxson.

There are calls from left, right and centre to bring manufacturing back to our shores. We have to find a way to make things again, and value add to what we already have they are saying.

When I mention manufacturing and value-adding, I am talking about Agricultural products and commodities here.

And maybe it's not a case of bringing it back, but starting again and being really smart about how we go about it.

It's also fair to say that we have a reasonably strong manufacturing element in the Ag space. It's probably more about value-adding in the food, beverage and fibre space. The food and beverage part is where it could be big. Four of the five examples I mention below are food-related.

But such manufacturing requires investment, lots of dollars of investment. And private dollars to boot. Governments can play a role, but it's going to be private money that will fuel it.

We have to think about how we can create these value adds efficiently with a margin for all stakeholders involved.

I believe we have the capabilities to get something going, we have such a diverse food culture, and we could on-sell to any country.

We are so, so good at building Agriculture Machinery and Equipment here in Australia. We make great Post Drivers, Chaser Bins, Grain Feeders, Hay Rakes, Spreaders, Woolpresses, I could go on for ages.

Just replicating the past won't always work. I don't think rebuilding Wool scouring plants would work. Perhaps it's another part of the Wool processing chain we could tackle. Or perhaps it's nothing because it's not viable or profitable, and others just do it so much better.

It might be the right thing to do for some things, but not others.

We don't have to have the whole value chain stitched up. Maybe it's the second level up from growing a commodity, like what Australia Plant Proteins is doing with Faba Beans and Lentils. They manufacture ground protein powder and on-sell it to food companies that make products that humans consume. This is all now done here, in the rural city of Horsham in Victoria, an area where Faba Beans and Lentils are grown. Make sense, right.

With Bega buying Vegemite from an overseas company, it has put all the links in the chain back in the hands of Australians. Vegemite is produced in Port Melbourne, and now that it's owned by Bega, it's adding value to Australians and not some overseas company.

We need to think harder about who we do business with. Do a bit of research and find out where your hard-earned goes and who it supports. Look after the Australian businesses or go a step further and support rural businesses.

There is a lot of value-adding going on at a Farm level. I know Farmers that are doing wonderful things with the products they or other Farmers grow by manufacturing them and selling them on the domestic or overseas markets.

An example from my old home town of Marnoo (Vic) is Burrum Biodynamics, which grows its own products, manufactures and packages them in a food-grade on-Farm manufacturing plant, and then on sells and distributes to consumers. They have built a fully integrated food company through hard work and persistence.

We have another innovative and highly successful Marnoo business in Wahroonga Enterprises. They import dismantled new and used Machinery from North America and put it together here, on location and then on-sell it to Farmers. They are Farmers also. 

Another example is Our Cow (not Marnoo this time), which sells grass-fed, free-range and organic packaged meat to subscribers right across Australia. This business was started by a Farming couple who struggled to make ends meet on the Farm and decided to value add out of desperation. Now they buy meat from other Farmers and pay them above-market rates for what they produce. They started from scratch around 3 years ago, and the business was recently valued at $30 million dollars.

These are just 3 of hundreds, if not thousands, of similar stories that are happening on Farms across Australia.

But Farmers don't always have to do the heavy lifting. You can partner with someone, or as Farmers, you can invest in the businesses that are buying the things you produce. Farmers do a great job growing stuff, and adding other enterprises might be a distraction.

It's such an opportunity for our industry as a whole, and there are plenty of smart people and businesses looking for entry points.

It's a vehicle to bring people from outside Agriculture into the Agriculture industry to make it stronger, more diverse and less prone to commodity and weather cycles.

A strong Ag space has implications for everyone.

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