… · web view– often used interchangeably with ‘measure’ but can be much less...

15. Measure/Monitor/Benchmark

Warren Mason

Learning objectivesOn completion of this topic you should be able to:

Explain the differences between measurement, monitoring and benchmarking Discuss the reasons why farmers might measure, monitor or benchmark to improve their

sustainability Nominate key indicators of financial, social and environmental sustainability Access examples of benchmarking in the wool industry Reconcile the differences between what experts think farmers should measure, monitor

and benchmark, and what actually happens on most farms Utilise a simple planning process that can combine formal and informal information to

assist key farm decisions

Key terms and conceptsMeasure, monitor, benchmark, data, information, knowledge, behaviour.

Introduction to the topicFirstly some definitions of key terms relevant to this topic.

Measure – to ascertain the extent or quantity of something through comparison with a fixed unit or with an object of known size. In other words, measurement is the formal determination of ‘size’ using agreed units of length, mass, volume, time, value etc.

Monitor – often used interchangeably with ‘measure’ but can be much less ‘formal’ and can operate without agreed units. Synonyms include check, follow, observe, scan, record, supervise, and watch. In practical terms for a woolgrower, measurement is a small sub-set of all the things that are monitored on the farm. For example a woolgrower might measure rainfall but is likely to only monitor water levels in farm dams.

Benchmark – originally, a ‘benchmark’ was a surveyor’s mark of a previously determined position and used as a standard reference point. It has broadened to become a standard against which something can be measured or judged. In the world of business, Camp (1985) provides a formal definition of benchmarking as ’the continuous process of measuring products, services and practices against the toughest competitors or those companies recognised as industry leaders ’. At this ‘formal’ level, benchmarking implies measurement of products (inputs and outputs), services and practices and is focused on quantifying the size of the ‘opportunity’ – it’s not just the study of competitors, but a process of determining any gaps by comparing measured performance. Camp goes on to say:

‘Benchmarking is a continuous process of measuring against the best. Goals are based on the benchmark findings to achieve superiority. Progress is measured periodically to update the organisation’s position towards achieving benchmarks. Benchmarking results in process practices and measurable goals based on what the best in the industry is doing and is expected to do. The approach contrasts sharply with the rather imprecise, intuitive estimates of what needs to be done to characterise current searches for productivity. Benchmarking is the rational way of ensuring the organisation is satisfying customer requirements and will continue to do so as customer requirements change over time. Benchmarking ultimately reflects an attitude to strive for excellence in every business endeavour.’

RSNR403/503 Sustainable Land Management - 15 - 1©2009 The Australian Wool Education Trust licensee for educational activities University of New England

Measuring, monitoring and benchmarking are about collecting data, but these have no value without the cognitive processes that must accompany the data and the action(s) that might follow.

Data – observations made about phenomena. On its own, it is of little value. For example, being told that a sheep is in condition score 1 is of no use to a person who does not have a concept of what a ‘condition score’ measures or means. Similarly, advising someone that the water contains 20 mg P/L is only useful if the person receiving this data is able to interpret whether this is a desirable or undesirable number.

Information – this is data that has been transformed according to benchmarks, standards and patterns. This ‘patterned data’ allows us to give meaning to the environment, and improve the goodness-of-fit between our knowledge and the real world. In the example above, telling a person the condition score of a sheep is only interpretable (can be turned into knowledge) if the person has a concept of what a sheep of this condition looks like. Thus the data has meaning, and from it, a person can then ‘know’ that the sheep in condition score 1 is in very poor shape!

Knowledge – this is the collection of ‘stuff’ between our ears, which allows us to understand the world we are operating in, to anticipate problems, to make decisions, and in short, to survive. People develop their knowledge in close relationship to the environment which impacts their lives. Knowledge that helps them operate may be very simple such as knowing some short cuts to doing certain chores, or it may be very complex and technically-focused in having valid ‘rules of thumb’ for managing grazing pressure across different seasonal conditions. People tend to only develop new knowledge when they realise that their existing knowledge is out of step with reality – this might be triggered by a new problem, an inability to achieve a goal, some major uncertainty or new information that challenges existing knowledge. Learning, then, is the accumulation of additional knowledge and not the accumulation of additional data or information.

Behaviour – behaviour is how we act or react. In behavioural science terms, observed behaviour is the response that a person makes to a stimulus. The extent to which behaviour is driven from within (feelings, values, examination of the world) or without (stimulus from outside) is a controversial subject but it has important implications for how we perceive the value of information per se in driving change. If we want people to behave differently, we must create the conditions under which it will be both easy and attractive for them to do so. Put simply, the principles of voluntary behavioural change are that people must want to change, know how to change and have the means to change. In fact the consensus in the literature is that behavioural change drives attitudinal change and not the other way around – you try something new because you think it might work, but only when it actually works does attitudinal change occur.

Therefore, while Measuring, Monitoring and Benchmarking can be important processes on farm, they must be seen as only one component of the complex mixture that goes into farm decision making. Farms are complex businesses and it’s easy to invoke the old saying ‘if you can’t measure it, you can’t manage it’. In this topic, we examine the concepts behind measurement, monitoring and benchmarking; some of the motivations involved; review some examples; and finally, examine the discrepancy between what we as technical experts think should be monitored, measured and benchmarked on farms, and what actually happens.

15.1 Why measure, monitor and benchmark for sustainability?

The concept of the ‘Triple Bottom Line’ (giving weight to financial, social and environmental outcomes) in management and reporting is currently very popular, and has underpinned this whole unit. Conceptually, it is fairly straight forward to see that while profits are critical for the survival of a business, environmental and social considerations are also important elements of a sustainable business.

From 141 personal interviews, Frost (2000) reported that farmers see farming as providing self-expression and personal fulfilment as well as a means of securing an income. The conclusion was that financial capacity was seen as a means of protecting farm viability, gaining general acceptance as ‘being a good farmer’, and protecting their ‘independence’ (which is a valued quality of farming).

15 - 2 – RSNR403/503 Sustainable Land Management©2009 The Australian Wool Education Trust licensee for educational activities University of New England

From similar interviews, Lobry de Bruyn and Abbey (2003) reported that farmers (n = 75) had mixed views on the highest priority areas that need to be considered to provide a more sustainable system. Fifty one percent gave income the highest priority, but the physical environment, and health and well-being were considered higher priority than income for 23% and 20% of farmers, respectively.

Indeed, Mason et al. (2003a) argued that a triple bottom line approach is how farmers intuitively operate. The analyses above imply that triple bottom line approaches would be highly applicable to agriculture – perhaps more so than for general business. Therefore, measuring, monitoring and benchmarking for sustainability is a very sensible and practical concept.

However, any action requires motivation, so we need to examine what would motivate a woolgrower to adopt the concepts of measurement, monitoring and benchmarking – these activities take time and resources, things that are often in short supply on farms.

A hierarchy of reasonsThe hierarchy below contains nine ‘reasons’ that might cause farmers to measure, monitor or benchmark. I would argue that the reasons below are in the general order of priority that they are given on most farms, though the precise ranking will differ. The first three reasons may seem trivial in a discussion focused on benchmarking sustainability – they are included because they mostly involve both measurement and formal recording, they have a high priority, and therefore they compete for the time and resources of the farm/farmer with the other possible measuring/monitoring/benchmarking activities.

Legally enforceable requirementsThere are some things that farmers are required (by law) to measure and report. For example, the Australian Tax Office requires farmers (and the rest of us) to record and report the financial details (income, deductible expenses, GST, Payroll and Superannuation) associated with their businesses.

Market requirementsThere are two possibilities here as measuring for markets can be either industry imposed, or grower selected:

When wool is sold by description, buyers have to be provided with the results from a set of objective measurements such as fibre diameter, strength and yield Farmers may select other, niche markets for their wool, and these may have a different set of requirements for measurement and reporting. For example, to market organic wool requires a grower to be certified as organic by the appropriate industry body and supply the supporting evidence to underpin the certification.

Peer pressureThere are certain things about farms/operations that farmers have to know in order to engage in dialogue with other farmers. For example, on almost every farm, rainfall is measured, recorded and benchmarked with neighbours at a level of detail way in excess of any value the measurement might have in supporting farm decisions – this is because of peer pressure. Sale prices for wool and sheep are also critical data that underpin discussions with other farmers, but provide little insight into business performance (see Section 15.2 on the Farm Monitor Project).

Decision supportMeasurement or monitoring will be carried out when there is uncertainty surrounding a decision and the measurement is seen as being able to significantly reduce that uncertainty. For example, while there are many factors to take into account in making a fertiliser decision (available finances, stocking rate, product prices, pasture composition, rainfall or rainfall expectations etc.), a farmer may decide that a soil test is needed in order to make the final decision on fertiliser rate. Monitoring (i.e. the general observation process that occurs every day on a farm) is the basis for most day to day decisions – for example, few farmers need to actually measure pasture availability as feed supply gets low in a paddock; most make the decision to move stock to a new paddock on casual monitoring alone.


Farm planning/budgetingFormal farm planning and budgeting, either for direct use by the farmer, or as the basis for financial dealings with the bank, requires a farmer to collect and collate considerable information to support that plan. For example, see the one-page planning process explained in Section 15.4 of this topic.

Comparative analysis/benchmarkingComparative analysis is the holy grail of measure/monitor/benchmark and the terms benchmarking and comparative analysis are often used interchangeably. In business (manufacturing) benchmarking, it is usual to compare a business directly with an industry leader or major competitor (Camp 1985). However, because every farm has a different set of resources and constraints, it is more useful to ‘benchmark’ against a basket of other farms. Most of the major consulting groups in the agriculture sector offer a benchmarking service across their clients – this allows an insight into the business operation of other farms that is not possible from general comparisons of prices or by looking over the fence. The major public comparative analysis for the wool industry is the South West Farm Monitor Project that has been operated by the Department of Primary Industries in Victoria for over 30 years. This project is dealt with in some detail in Section 15.2.

Community expectationsHow often do we see words to the effect of ‘farmers are under increasing pressure from the community at large to become more sustainable’, or that ‘consumers, both in Australia and overseas are demanding environmental accountability from Agriculture’? It is difficult to quantify the impact of these expectations, but it is clear that the general concept of sustainability and what it means in practice is no easier for the ‘general community’ to understand than it is for farmers.

As a result, the ‘community’ tends to focus on high profile, single issues. Indeed, the wool industry has recently felt the pressure from the ‘community’ to eliminate mulesing from farm practice. However, such examples are quite removed from the general concept of the community pushing for sustainability more generally. Some research in WA (Wallace et al. 2003) has highlighted this by reporting ‘There is little or no emotional connection between the mostly urban population of WA and the landscape of the wheatbelt. Evidence for this is the strong public interest in forest and coastal conservation issues, in strong contrast to similar issues in the wheatbelt’. In other words, ‘community expectations’ only rarely come together and build up a head of steam, and it will usually be around a single, topical issue or an iconic part of the landscape such as coasts and forests in WA.

Quality Assurance (QA) and Environmental Management Systems (EMS)There is no comprehensive Quality Assurance system for the sheep industry, though issue specific QA systems are available. As an example Elders (http://riskmanagement.elders.com.au) offer ClipCare, a quality management approach to the shearing, preparation and handling of wool. It suggests the following benefits to participants:

Clip differentiation from those clips not produced under quality assurance standards Expert advice from accredited Elders ClipCare staff on ClipCare preparation and registration

standards Display in a ‘ClipCare Only’ segment of the sale catalogue Reduced direct and indirect costs incurred by wool processing companies as a result of the

reduced incidence of contamination in raw wool.

However, the lack of a premium for wool prepared in accordance with these QA systems has greatly reduced their appeal and prominence in the industry.

Environmental Management Systems (EMS) is a specific QA process that focuses on achieving sound environmental outcomes. The use of EMS is growing rapidly in business sectors worldwide, and as the custodians of most of the landscape, EMS and agriculture are natural partners. In recognition of the emerging importance of environmental issues and sustainability, the ISO (International Organisation for Standardisation) instituted the ISO 14000 series of environmental standards in 1996. Measuring, monitoring and benchmarking are essential elements of EMS and this subject is examined in more detail in Section 15.3.


Catchment targetsCatchments (Catchment Management Authorities or Boards and NRM Councils – there are different names in different States) are the new reality in Australia, linking community (i.e. Government funding) with land use and land management practices. Each catchment has been charged with the responsibility of setting specific targets for each of the following issues:

1. Land salinity2. Soil condition3. Native vegetation community integrity4. Inland aquatic ecosystem integrity (rivers and other wetlands)5. Estuarine, coastal and marine habitat integrity6. Nutrients in aquatic environments7. Turbidity / suspended particulate matter in aquatic environments8. Surface water salinity in freshwater aquatic environments9. Significant native species and ecological communities10. Ecologically significant invasive species.

Farmers can expect increasing pressure to monitor environmental performance as part of catchments meeting locally set targets and environmental expectations.

A note of cautionDespite the fact that this section began with a discussion on the elements of the triple bottom line, and the importance of financial, environmental and social outcomes, almost all of the above discussion relates to the monitoring of production and financial aspects of the wool growing business! What does this mean? Is it simply that we don’t have the measurements, or is it that comparison of (say) elements of the social experience on one property are not meaningful in the context of a different property and farm family? Or, is it that some elements of the triple bottom line are more important than others? Mason et al. (2003a) discussed this issue and concluded that the three elements are not equal in a business sense because while a sustainable business strategy must provide shareholder value without unacceptably reducing societal value, ‘money talks’ and therefore financial reporting remains the most powerful reporting tool. Perhaps the triple bottom line approach is simply recognition that for overall sustainability, the financial side must be tempered by social and environmental considerations.

15.2 Monitoring farm production and financialsAt the national scale, the Australian Bureau of Agricultural and Resource Economics (ABARE – http://www.abareconomics.com/index.html) conducts annual farm surveys of the broadacre and dairy industries for government and industry. Every year ABARE produce industry reports on the wool, prime lamb, grains and beef industries, among others, that are available from the website. These reports help in the drive for efficiency gains and provide a factual basis for the further development of the industries. The information in these reports is mainly based on farm survey data and helps farming industries to analyse the issues that they face in the coming years.

At farm scale, most of the major consultants and consulting groups in the agriculture sector offer a benchmarking service to their clients – this allows an insight into your business, and the operation of other farms that is not possible from general comparisons or from talking to other farmers. The Farm Monitor Project is a major pubic comparative analysis for the wool industry – it has been undertaken annually by the Department of Primary Industries in Victoria for over 30 years.

The farm monitor projectThe 2002/03 report (Beattie 2004) from the Farm Monitor Project represents the thirty-third consecutive year that this comparative analysis in the wool industry has been conducted. For the current report, production and financial information from 71 wool growing properties has been analysed. This report is part of the reading list for this topic, so only a snapshot of information is presented in these notes.


The principal aims of the Farm Monitor Project are to:

provide benchmarks for grazing farms in south west Victoria monitor trends in farm productivity and profitability provide data to evaluate differences between top performers and other farms provide feedback to participants.

Physical and financial information is collected from participating farms annually either by mailed questionnaire or farm visit. Participants are selected to give a good range of farm sizes, enterprise mixes and locations across south west Victoria (Figure 15.1). Farms ranged in size from 41 to 4605 ha, with the typical farm being 917 ha, ran 5500 sheep and 266 beef cattle and cropped 65 ha. It is important to realise that because the project is based in south west Victoria and the farms are not randomly selected, the results do not represent averages and cannot be extrapolated to other regions.

The project provides a unique snapshot into the financial aspects of wool production in south west Victoria and therefore provides benchmarks that all farmers can use, not only those who contributed data to the project. The potential value from comparative analysis can be gauged from the following selection of results from the Farm Monitor Project. However, the report itself is very informative reading.

Figure 15.1 Spread of Farm Monitor Project participants across south west Victoria. Source: Beattie (2004).

Table 15.1 provides a summary for the wool production enterprises across the 71 farms for 2002/03. Like much of the information in the Farm Monitor Project report, there are both averages and what the top 20% are achieving. The top 20% of farms were selected according to profit per hectare before interest and lease charges are deducted. Enterprises are ranked on this basis to give an accurate measure of efficiency of the activity, recognising that financing of the activity (interest and or lease charges) is a separate issue.

The data in Table 15.1 is only for the wool production enterprise. It is interesting to examine the breakdown within the table that shows the parameters in the Table fall into two ‘groups’:

1. Wool cut per head; average micron; wool price; average yield; lamb marking %; and pasture costs per ha. For this group of parameters, there was little or no difference between the average and the top 20% of woolgrowers

2. Wool cut per hectare and per 100 mm of rainfall; stocking rate; sheep sale price; and wool gross margin per head, per hectare and per 100 mm of rainfall. For this group of parameters, there were major differences in favour of the top 20% of woolgrowers.


The differences between the average and the top 20% (data not presented) translated into a profit per kg of $2.38 on average, or $6.29 for the top 20%. The power of comparative analysis can be seen from these brief excerpts – for example, it is clear from Table 15.1, that the much higher profitability of the top 20% of woolgrowers in the survey was not driven by them receiving higher prices for their wool, but almost entirely driven by their lower costs per kg of wool produced – not lower costs in total, but lower costs per kg of wool.

Table 15.1 Top 20% compared to averages in the Farm Monitor Project – wool sheep production and financial data. Source: Beattie (2004).

15.3 Monitoring environmental and social indicatorsFor a business to be considered sustainable in the long term it must not only be profitable, but it must also minimise negative environmental impacts, and protect and develop its human capital. The concept of triple bottom line reporting is therefore directly tied to the concept of overall sustainability.

Interestingly, the most recent report from the Farm Monitor Project (Beattie 2004) has attempted to broaden the project to include both environmental and social indicators of sustainability. The report is titled ‘Just a Hop, Step and a Jump Away From Complete Accountability – The Triple Bottom Line Approach To Business Reporting’. The following notes are drawn from that report.

Social measuresThe social bottom line deals with the interface between the business and groups of people – its stakeholders and the community. Participants in this year’s Farm Monitor Project were asked a series of questions relating to how they manage their business and how they feel about farming as a career. The questions were:

Q1. How much scope is there within your business for improving profitability?Q2. To what extent is your business the first to take up new technologies/practices?Q3. What is the most important barrier to adoption of new technologies/ practices?Q4. What is the major management focus on your farm?Q5. Overall, how satisfied are you with farming as a career?Q6. What is the age of the owner/operator?Q7. What is the highest level of education achieved by owner/operator?


Parameter Averages DifferenceAll Farms Top 20% Amount %

Wool Cut (kg per head) 3.4 3.6 +0.2 +6Wool Cut (kg per grazed ha) 35.6 44.0 +8.4 +24Wool Cut (kg/ha/100 mm rain) 5.6 7.0 +1.4 +25Average Micron 19.5 19.8 +0.3 +2Net Clean Wool Price (per kg) $9.81 $10.36 +$0.55 +6Sheep Sale Price (per head) $34.70 $39.15 +$4.45 +13Average Yield of Clip (%) 70.4 71.0 +0.6 +1Stocking Rate (DSE/grazed ha) 14.6 16.2 +1.6 +11Lamb Marking Percentage (%) 76 79 +3 +4Pasture Costs (per ha) $44 $43 -$1 -2Supplementary Feed Cost (per ha) $59 $51 -$8 -14Wool Gross Margin (per DSE) $15.82 $24.59 +$8.77 +55Wool Gross Margin (per ha) $232 $386 +$154 +66Wool Gross Margin ($/ha/100 mm rain) $36 $61 +$25 +69

Environmental measuresThe environmental bottom line focuses on the relationship between the business and its natural environment. The Farm Monitor Project sought information to allow the calculation of the following ‘environmental indicators’:

Nutrient audit – to measure the net nutrient flow on the farm by measuring the amount leaving the farm in product sales, including fodder, grain, wool and meat, and the amount entering the farm in terms of bought in feed and fertiliser applied. P, K and S were included. The net nutrient balance should be at least zero to ensure the nutrient status of the farm soils is not declining

Perenniality index – calculated by multiplying the percentage of the total farm area in each plant type category by the corresponding perenniality rating, then adding the resulting numbers together. This is based on the fact that the original vegetation was primarily perennial and the lower water use of annuals has created many environmental problems, dryland salinity being the most obvious

Crop water use efficiency – this was calculated in two ways – the amount of grain produced and the gross margin ($ per mm of effective, growing season rainfall). The more water used by the crop, the lower chance of leakage from the farm.

The overall conclusion drawn from this exercise was how subjective these social and environmental indicators are, compared to the production and financial information that has been the basis for the Farm Monitor Project for the last 30 years.

One of the major problems with social and environmental monitoring, is that there is rarely a ‘right’ answer and it is very difficult to find the right units to compare between farms. However, there are attempts to overcome this weakness, and two are highlighted below – Soil Health, and Environmental Monitoring Systems (EMS).

Soil healthIn 2003, the Australian Journal of Experimental Agriculture published a special edition entitled ‘Applications of Sustainability Indicators to the Management of Soil and Catchment Health’. This publication contains many excellent papers and is strongly recommended for further reference. Schwenke et al. (2003 – one of the papers in the special edition) presented (as Table 8, p. 218) a suite of sustainability indicators that relate to soil health. These included surface structure, water infiltration, sub-surface compaction, soil erosion, sodicity, salinisation, nutrient deficiencies, soil acidification and crop diseases. Together, these indicators would provide a farmer with a very comprehensive snapshot of the sustainability of a paddock operation.

They are not all easy to measure of course, which raises the question of why would farmers be bothered to monitor soil health. This issue is discussed more in the next section, but Lobry de Bruyn and Abbey (2003) argued in the special edition, that ‘for monitoring of soil health to become an accepted norm it will need to be incorporated into activities associated with a normal work routine, utilise practical techniques, involve minimal paperwork, and require limited training and reading.’ That is a challenging list!!

Environmental Management Systems (EMS)EMS are simply a structured way to identify and manage impacts on the environment and to report on progress – that is, a QA system for the environment. The most rigorous and internationally accepted form of EMS is the ISO 14000 series that was developed in the late 1990s by the International Organisation for Standards (ISO). The ISO systems are generic and can be adapted to any or all industries because they do not set environmental performance standards; rather, they measure progress towards targets. By 2001, Australia was ranked fifth in the 72 countries where ISO 14000 had been adopted – however, only 0.2% of the certifications were in the agriculture and fishing sectors.


Central to EMS is the concept of continuous improvement. ISO 14000 requires participants to demonstrate not only an understanding of the process, but also to provide evidence of implementation on the property. This is done via monitoring impacts, record keeping, internal audits and external audits.

In 2000, MLA (Meat and Livestock Australia) funded a project to pilot test the use of EMS in the meat industry. The overall goal was to assist four groups of meat producers (from Victoria to Qld) to try out the concept of EMS, and specifically to have at least five beef properties in each group achieving ISO 14000 certification (Banney 2002). The beef producers in the pilot study were all very environmentally conscious and could demonstrate this on their properties – as well, most were CattleCare accredited (an industry QA system) and therefore were used to a relatively rigorous QA system. Despite this, only the corporate entity from northern Australia decided to progress to registration and final ISO 14000 certification. The conclusions from the pilot project were:

Obstacles to the uptake of EMS by producers are the financial burden and the time required to implement and maintain the system. Currently, there are limited or nil land or water access benefits, financial incentives, market access benefits or bonuses to offset these costs

Certification to the ISO 14000 standard would be too demanding for most producers even if the financial and other incentives were in place

A possible way forward for the meat industry would be to construct a four-tiered approach towards improving the environment:

i) an environmental self-assessment would constitute the initial environmental review component

ii) an environmental check-list, which could be audited by a CattleCare auditor would be the second stage

iii) the third tier would be an industry EMS that continues to adopt the principles of the ISO 14000 standard and is audited alongside CattleCare by a suitably qualified industry auditor

iv) the fourth and final tier would be an EMS that is certified to the ISO 14000 standard and is audited by an accredited, external auditor.

15.4 The reality for farm measurement/monitoring/ benchmarking

As already discussed, there are a myriad of reasons for measuring, monitoring and benchmarking on farms, so surely all farmers would be doing it. It is always surprising then to find out how little recording occurs on most farms, and how few farms engage in formal benchmarking!

Lobry de Bruyn and Abbey (2003) interviewed 75 farmers in the north west of NSW and reported the information in Table 15.2 below.

Table 15.2 Nature and extent of record keeping by farmers (percent of farmers who record) at farm and paddock level. Source: Lobry de Bruyn and Abbey (2003).

Farm Scale % Paddock Scale %Rainfall 74 Soil tests 21

Finances 80 Crop type 59Production 31 Fertiliser (amount) 48

Stocking rates 22 Sprays (dates of) 52Soil tests 12 No. of workings 36

Yields 47Protein (grain) 22

Stock movements 43Paddock costs 10

This is not to say (for example) that 53% of the farmers didn’t know the yield they had achieved in a particular paddock, just that they didn’t record it. In fact as a general rule farmers record a miniscule amount of the information they take in (monitor) from the process of managing their farm.


Farmers are busyIt is critical to understand that we all use information to test, adjust and reframe our knowledge of the world and how best to operate within it. This costs intellectual effort, time and money and therefore the activity needs to generate benefits that exceed those costs – or we quickly stop doing it.

Farmers (like all of us) have limited time to put the information they access to the relevance test. As shown in the most recent census statistics (Table 15.3), 76% of mixed crop and livestock farmers are working more than 50 hours per week. Other folk in the managerial and professional workforce are reported to be less stretched.

Table 15.3 Work practices. Source: ABS (2003). Occupation Percentage of respondents

working more than 50 hours per week

Mixed crop and livestock farmers 75.8Mining and materials engineers 55.4Secondary school teachers 31.1Registered nurses 11.8Shop managers 52.2

Farmers and scientists have different perspectivesIn addressing the Australian Society of Agronomy in 2001, Bob McCown addressed the divide between what specialists think about farming and how farmers see it. He said “From the ‘outside,’ scientists see farming systems as extremely complex, and tend to perceive a need for scientific assistance in recognizing logical imperatives for action. The reality of situated practice is that while it is enormously complex in terms of scientifically describable mechanisms, much of this complexity is invisible and irrelevant to the experienced practitioner. This is because, as the very successful farming systems researcher, Mike Foale, says, ‘although every farm is complex and unique, nearly every farm is managed by ‘the world expert’ on that farm’. Experiential knowledge concerns procedural relationships between actions and outcomes and such knowledge constitutes expertise. Complexity becomes an issue only when a farmer is a novice regarding a practice or when a relationship between action and outcome breaks down.” In other words, experienced farmers intuitively understand how to manage their farms until and unless challenged by a breakdown of their mental model – they don’t feel a need to record and benchmark everything that we sometimes think they should!

McCown (2001) also described how what you see depends on where you are looking from. The farmers view can be likened to a felled tree as viewed from the trunk end, with the core purpose (trunk) very clear, but with mid-distance divergence into strategies and plans (branches) and further identification of diverse objectives and technical practices (leaves) in the background. The view of the ‘outside expert’ can be likened to viewing the same felled tree from the apex. From this perspective, the mass of detail (leaves) is seen in two and three dimensional space, effectively masking the coherent purposes and plans that are the branches and trunk.

In other words, just because we, as technical experts, feel the need to see quantified (i.e. measured and recorded) data on all the various aspects of a farm operation, doesn’t mean the farmer feels the same need, and therefore often records little.

Two examples from the Australian Journal of Experimental Agriculture special edition on soil and catchment health (2003) highlight the difficulties associated with monitoring, measurement and benchmarking by farmers.

Ridley et al. (2003) reported on the development and use of an environmental monitoring tool, and made the following observations.

The relatively low participation rates of farmers in production oriented monitoring activities means that adoption of environmental monitoring tools is likely to be extremely low

Time had to be managed very efficiently, as the farmers were all extremely busy


Of 250 invited to participate in the project, 17 families started, but by 18 months only 10 remained active

The sorts of values involved with this core group were associated with them being self actualising, identifying with all humanity, democratic, a strong ethical sense, and an un-hostile sense of humour (not a common set of characteristics in any sector of the population!).

David Pannell (2003) made the following comments, coming from an economics perspective:

Farmers do monitor many things, sometimes very intensely if they relate to a key management decision. For environmental monitoring to be routinely adopted, would require that they be directly relevant to important management decisions

Monitoring of groundwater levels in regions with high salinity levels is low, even among farmers who have gone to the expense of installing piezometers – it appears that having seen the groundwater is high/rising, then further/ongoing confirmation of that fact is not needed

It seems unrealistic to expect that monitoring of sustainability indicators will, in itself, be sufficient to prompt substantial changes in farm management

We should accept that most farmers will not choose to monitor sustainability indicators unless it is beneficial to do so, and economic motivation will be the main driver

And finally ‘It is not possible to conclude that monitoring indicators is, in general, a good thing.’

An inclusive planning toolWe are faced then with the reality that while there are many, many things that a farmer might monitor, measure or benchmark, in reality, there are few things on farm that are formally measured and recorded. But, despite this lack of recording, farmers still have to plan any significant changes they might make on their farms.

The Sustainable Grazing Systems Program initiated by MLA in the high rainfall zone of southern Australia developed a planning process that allows a farmer to combine the informal information they hold in their heads, with any measurements or other information they hold – all within a one-page format (see Towards Sustainable Grazing – the professional producer’s guide). There are two stages to this planning process, deciding the options and priorities, and then planning any changes. In Table 15.4, the planning framework is outlined to illustrate the sorts of questions a farmer might consider before making a significant change, and allows the combination of formal and informal information without bias.

Table 15.4 The one-page planning process from the MLA book ‘Towards Sustainable Grazing – the professional producer’s guide’. Source: Mason et al. (2003b).

Step 1 - Deciding the Options and PrioritiesWhere am I Now? Where do I want to get to?This is where you describe your current situation, and perhaps why you are not satisfied with what you are doing, or what results you are currently getting.

What are the opportunities? What do I want my business to look like? How much time, effort or $ do I have to utilise?This is where you describe your vision, or where you want to get to, or what results you are wanting to achieve from any changes you plan.

What are my Options? What is the highest priority?Can I modify my enterprise mix? Is there a pasture management solution? Are there off-farm options?There are often many different options or approaches to achieving your vision of where you want to be. List as many as you can think of.

From the list of options, select the one that you think is most appropriate/the best option for you. This may require some further information seeking, and/or discussion with others (advisors or co-decision makers)


Step 2 - Planning the ChangePossible Impacts on the Farm Possible Impacts off the FarmWhat are the likely impacts on (for example): Pastures and animals Finances You and your family Weeds, soils and nutrients Water use and management Native or remnant vegetation

What are the likely impacts on (for example): Your customers Quality of run-off water Water use, and contributions to rising water tables

and salinity Native or remnant vegetation, especially associated

with riparian areas

Likely Impact on Profitability Overall AssessmentProfitabilityWhat is the expected profitability, and will it come from costs or returns? How sure is the gain from year to yearOther Key ConsiderationsWhat other issues have to be considered eg: Are extra skills needed? How will the change be financed? Are additional animals required? How long before the change

breaks even? How committed am I to the

change?

Main AdvantagesWhat are the small number of key advantages you expect from the change?Main Disadvantages/RisksWhat are the small number of key potential downsides and risks to be considered and managed? What are the key risks, and how will I know if things are not going according to plan?Conclusion/implementationFinal, and individual decision and steps for implementation

Table 15.5 - A ‘real life’ example of the one-page planning process from the MLA book ‘Towards Sustainable Grazing – the professional producers guide’. Source: Mason et al. (2003b).

Step 1 - Deciding the Options and PrioritiesWhere am I now? Where do I want to get to?I don’t have a lot of spare winter feed, but my current stock numbers (12.5 DSE/ha) are not high enough to generate the income I’m going to need over the next few years. I’ve been rotationally grazing for several years, and I have a reasonable paddock layout to handle more stock. Rotational grazing allowed me to increase my stock numbers and cut fertiliser but I seem to have hit a barrier. I’ve seen demonstrations that improved pastures can boost feed supply by 50% or more.

I think I need to increase my stocking rate by about 20% over the next two years in order to increase my income, but my facilities could handle an even larger increase. However, I want to make sure that as I increase my stock numbers, I do it in a sustainable way. My property has some quite steep sections that if overgrazed, may start to erode. I would like to reduce grazing in these areas and maybe use them for NRM objectives such as trees

What are my options? What is the highest priority? Try to manage my rotational

grazing better to increase utilisation

Increase subdivision for more intensive grazing

Increase fertiliser use on existing pastures

Re-sow some under-performing pastures with some of the latest perennial grasses and clovers

Seek higher paying markets Buy additional land or install

irrigation

My soil tests are moderately low, but I don’t have the species in some paddocks to respond to extra fertiliser. Buying additional land is always at the back of my mind, but optimising production at home comes first.Resowing and fertilising a couple of paddocks seems the best option, so long as I graze them correctly and increase stocking rate to utilise the extra production.

Step 2 - Planning the ChangePossible Impacts on the Farm Possible Impacts off the Farm


Extra pressure on other paddocks so some overgrazing is likely

Contract labour will be needed Direct drilling should avoid any erosion

risk Should not be any impacts on water use

or remnant vegetation Highly productive pastures will be

beneficial for soil structure and increase organic matter

Will need capital to fund both the new pastures and more stock

The paddocks are already pasture, so additional impacts should be minimal

Extra fertiliser may pollute run-off water Profitable farms are important for my community

Likely Impact on Profitability Overall AssessmentProfitabilityAt an average Gross margin of $20/dse, a 30% increase in stocking rate will yield around $70 more per ha. About $15 extra fertiliser is needed per year. Given $250/ha establishment costs and say 12-15 years pasture life, the annual cost of the improvement is around $25/ha, leaving me $30/ha profit per yearOther Key Considerations- What is the best mixture of species for

my place?- Is my calving time matched to the

increased feed- How will I finance the development- Natural increase, buy or agist?- Are there additional pasture pests I’ll

need to watch- Are there additional market

opportunities if I have better quality pastures?

Main Advantages- increase total feed supply and quality- economies of scale within my existing farm- fits my existing management skills- allows increased profit and NRM objectives- Main Disadvantages/Risks- Sowing pastures has a high capital cost- Extra pressure on other paddocks, but my feed

planning/monitoring systems will help avoid this- Significant risks include, establishment failure,

falling stock prices, and extra production may not cover costs.

Conclusion/ImplementationCareful planning will be needed, but on balance it looks profitable, and will increase the overall sustainability of the farm operation. First step is to identify the two paddocks I will re-sow.

Table 15.5 gives a real life example of one beef producer using the one-page planning tool. It is clear from the example, that the vast majority of the information taken into account was not ‘formally recorded’ data. No additional measurement or recording was done in the process of developing the plan, however, it does highlight in an informal way that some ‘measurement or monitoring’ might be needed during the implementation of the plan as that is a time of uncertainty and key decision making.

15.5 ConclusionsIt would be tempting to conclude this topic with a suggested list of a minimum set of measurements that should be taken on farm, at a range of scales – for example, individual animal, paddock and whole farm. This is doubly so given the research cited in this unit that highlights how little is recorded on the average farm.

Such a list is indeed possible for the production and financial information. To be able to make use of (let alone participate in!) published benchmarking information (for example the Farm Monitor Project in Victoria) requires quite a high level of farm recording. Especially since the introduction of the GST, the farm financial records that are required by the Australian Tax Office are sufficient for the benchmarking of most costs. However, the ATO does not require a breakdown by individual enterprises on a farm, so on mixed farms, some additional recording is necessary if (for example) a farmer wants to benchmark the performance of their woolgrowing operation.


Unfortunately, no such ‘minimum list’ is possible for the environmental and social issues that combine with the financial to make up the triple bottom line. The most pressing environmental issue on one farm may be soil erosion, but on adjoining farms, the most pressing issues might be remnant vegetation management, protection of riparian zones, soil acidity, weeds or feral pests. The particular ‘pressing issue’ is what determines what might be a sensible minimum set of measurements that might be needed to monitor progress with the issue over time. In other words, the minimum list of measurements for any farm is almost entirely dependent on the context within the particular farm, and its position in the landscape or catchment.

Social issues are even more problematic, when it comes to specifying what might be measured or monitored to assess progress or direction as far as ‘social health’ is concerned. Value laden judgements about how many holidays a farmer should take, how many training days per year, what education level, or what level of satisfaction a farmer may express about their lifestyle, seem to provide few clues about what makes a sustainable farm, and therefore what should be measured to assess if the farm is becoming more or less sustainable.The unavoidable conclusion is that farmers will measure or monitor when they think the information needed is critical for decision making, and they’ll stop when it’s not. The job of the supporting professions is to ensure that the tools are available, and where possible the benchmarks are established so that farm measurement, monitoring and benchmarking are as simple as possible but provide the greatest value for the effort expended.

Readings The following readings are available on CD:1. Beattie, L. 2004, Farm Monitor Project. Summary of Results 2002-2003. Victorian

Department of Primary Industries.a. This is the most recent report from the Farm Monitor Project in south-west Victoria. It is

a long running (more than 30 years), publicly funded (and therefore publicly available) benchmarking project that looks at the financial aspects of mixed farming (originally woolgrowing) businesses. The report includes both averages and what the ‘top 20%’ are achieving and to some extent, how they are achieving it.

b. Though not part of the reading, the website contains a ‘supplement’ or ‘feature article’ entitled ‘Just A Hop, Step And A Jump Away From Complete Accountability - The Triple Bottom Line Approach To Business Reporting’.

2. Mason, W.K., Warn, L. and Cahill, G. (eds.), 2003, ‘Bringing it all together to assist decision making’, Chapter 11 in Towards Sustainable Grazing: the professional producer’s guide, Meat and Livestock Australia.a. The MLA publication, ’Towards Sustainable Grazing: the professional producer’s guide’

contains many chapters that relate to topics in this unit. Chapter 11 (Bringing it all together to assist decision making) is the reading for this topic as it provides a one-page planning process to assist farmers combine formal measurement with informal monitoring; on- and off-farm considerations; and to examine priorities against that framework.

3. Pannell, D.J. 2003, ‘What is the value of a sustainability indicator? Economic issues in monitoring and management for sustainability’, Australian Journal of Experimental Agriculture, vol. 43, pp. 239-243. CSIRO Publishing - http://www.publish.csiro.au/pid/431.htm and http://www.publish.csiro.au/journals/ajea.a. This paper by David Pannell from the University of WA is part of a special edition put out

by the Australian Journal of Experimental Agriculture entitled ‘Application of sustainability indicators to the management of soil and catchment health’. There are many excellent papers in the special edition, all focused on measuring and monitoring in the soil and catchment health arena. David’s paper is more of a summary of the application of sustainability indicators at farm level, and uses a case study (farmers in areas with dryland salinity monitoring piezometers – shallow test wells that allow measurement of water table depth).

4. Gilding, P., Hogarth, M. and Reed, D. 2002, Single bottom line sustainability. Ecos Corporation discussion paper. Retrieved October 20th, 2006 from: http://www. ecoscorp.com/library/Single %20Bottom%20Line%20Sustainability.pdf

a. Most publications about Triple Bottom Line reporting (such as the Farm Monitor Project report described above) treat the concept like motherhood – that is, to be aspired to and never criticised. This discussion paper takes a more sceptical view of the triple bottom


line – not because social and environmental considerations are not vital components of decision making, but because they do not believe the three elements of the triple bottom line are equally powerful for driving change. The following quote gives some idea of the tack taken:

b. Financial reporting drives behaviour not solely because it is disclosure, but because of the positive and reinforcing feedback impact on shareholder value. It is this alignment between the interests of investors and management that makes financial disclosure powerful. Investors invest because they believe there will be strong financial performance. Managers strive to produce strong financial performance because they believe their success will be rewarded. Reporting without this reinforcing loop does drive change, but the force is much weaker. As a result, it drives less profound change less quickly. The potential for positive feedback from TBL reporting exists, but it lacks the impact of the synergies that result when the mutually reinforcing goals of shareholders and management are publicly shown to have been achieved.

ActivitiesAvailable on WebCT

Multi-Choice QuestionsSubmit answers via WebCT

Useful Web LinksAvailable on WebCT

Assignment QuestionsChoose ONE question from ONE of the

topics as your assignment. Short answer questions appear on WebCT. Submit your answer via WebCT

SummarySummary Slides are available on CDThis topic tries to bring together the theory associated with measuring, monitoring and benchmarking for sustainability, with the practical reality that farmers measure and record very little. There is a hierarchy of reasons why farmers would measure/monitor/benchmark (from compulsion – such as for the tax office – to the desire to assist with meeting Catchment targets), and there is an almost endless list of things farmers could measure/monitor or benchmark. Farmers work longer hours than almost any other profession so there are strong demands for their time. To be sustained, measurement and monitoring have to be providing vital information that assists important decisions – otherwise, the time and intellectual effort required to collect and process the information will be seen as not providing sufficient ‘return’ on the investment. In an attempt to provide a simple planning framework that accounts for the relative lack of measured data on farm, the Sustainable Grazing Systems program (an MLA program) developed a one-page planning framework that incorporates aspirations, on and off-farm impacts, and both formal and informal ‘data’. The utility of the planning framework is examined in this topic.

ReferencesAustralian Bureau of Statistics (ABS) 2003, ‘Proportion of full-time workers working 50 hours or

more per week: selected occupations – 2001’, Census of Population and Housing data, in Australian Social Trends, Australian Bureau of Statistics.

Banney, S. 2002, Environmental management systems: cattle industry pilot. Final project report to MLA.

Beattie, L. 2004, Farm Monitor Project. Summary of Results 2002-2003. Victorian Department of Primary Industries.

Camp, R.C. 1985, Benchmarking: the search for industry best practices that lead to superior performance, Quality Press, Milwaukee, Wisconsin.


Frost, F.M. 2000, ‘Value orientations: impact and implications in the extension of complex farming systems’, Australian Journal of Experimental Agriculture, vol. 40, pp. 511-517.

Lobry de Bruyn, L.A. and Abbey, J.A. 2003, ‘Characterisation of farmers’ soil sense and the implications for on-farm monitoring of soil health’, Australian Journal of Experimental Agriculture, vol. 43(3), pp. 285-306. CSIRO Publishing - http://www. publish.csiro.au/pid/431.htm

and http://www.publish. csiro.au/journals/ajea.Mason, W.K., Allan, C.J., Andrew, M.H., Johnson, T.H., Lodge, G.M., Simpson, I.H. and Russell, B.

2003a, ‘An appraisal of SGS: the Program, the triple bottom line impacts and the sustainability of grazing systems’, Australian Journal of Experimental Agriculture, vol. 43, pp. 1061-1082.

Mason, W.K., Warn, L. and Cahill, G. (eds.), 2003b, Towards Sustainable Grazing; the professional producer’s guide. Meat and Livestock Australia.

McCown, R.L. 2001, ‘Farming systems research and farming practice’, in Proceedings of the 10th

Australian Agronomy Conference, Hobart. Pannell, D.J. 2003, ‘What is the value of a sustainability indicator? Economic issues in monitoring

and management for sustainability’, Australian Journal of Experimental Agriculture, vol. 43, pp. 239-243.

Ridley, A.M., Paramore, T.R., Beverly, C.R., Dunin, F.X. and Froelich, J. 2003, ‘Developing environmental monitoring tools from sustainability indicators in the southern Riverina’, Australian Journal of Experimental Agriculture, vol. 43(3), pp. 271-284.

Schwenke, G.D., Reuter, D.J., Fitzpatrick, R.W., Walker, J. and O’Callaghan, P. 2003, ‘Soil and catchment health indicators of sustainability: case studies from southern Australia and possibilities for the northern grains region of Australia’, Australian Journal of Experimental Agriculture, vol. 43(3), pp. 205-222.

Wallace, K.J., Beecham, B.C. and Bone, B.H. 2003, Managing Natural Biodiversity in the West Australian Wheatbelt, Department of Conservation and Land Management.

Glossary of terms

BenchmarkBenchmarking implies measurement of products (inputs and outputs), services and practices and is focused on quantifying the size of the ‘opportunity’ – it’s not just the study of competitors, but a process of determining any gaps by comparing measured performance

Monitor Often used interchangeably with ‘measure’ but can be much less ‘formal’ and can operate without agreed units

MeasureTo ascertain the extent or quantity of (a thing) by comparison with a fixed unit or with an object of known size. In other words, measurement is the formal determination of ‘size’ using agreed units of length, mass, volume, time, value etc


… · web view– often used interchangeably with ‘measure’ but can be much less...

Documents