Passion to Profit by New Rural Industries Australia

passion to

profit

The magazine of New Rural Industries Australia Issue 5 August/September 2011

Kangaroo industry strikes back 2012 NRIA Conference â&#x20AC;&#x201C; call for expressions of interest Find the right people and let them get on with their jobs

Visit our website www.nria.org.au && Get the latest news on NRIA. && Learn all about the new rural industries. && Access links to industry associations and organisations. && Read profiles of producers. && Access to articles on subjects common to all involved in new rural industries. && Access to conference presentations and papers. && Join NRIA as a member.

2012 NRIA Conference Call for expressions of interest

The board of NRIA is proud to announce that the next NRIA conference is going to be held in March of 2012, in Victoria.

&& Stay in touch with the latest information and news. && Share insights into new rural industries. && Stay informed. && Find and follow others with similar interests and enterprises.

No exact dates or venue has yet been set – as we wish to give industry organisations and potential venue sites opportunity to collaborate. The initial planning for the event includes an exhibition trade show of new rural industries, forums for primary producers to have their say on key issues, fashion show, gala dinner, and more.

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The magazine of New Rural Industries Australia Issue 1 October 2010

Concurrently, expressions of interest for hosting the NRIA conference are now being accepted. We are looking for a venue that can host 500 delegates plus, has several spaces for concurrent sessions, and has access to affordable accommodation for those attending. Preference will be given to a rural or regional area within travelling distance from Melbourne.

NRIA Conference and Expo 2010 Producing a product successfully

ISSN 1838-6016

5:48

If your industry organisation was planning a national meeting, AGM, conference or workshop in early 2012, then scheduling that meeting in or around the time of the NRIA conference can hold potential cost savings for your industry, whilst also enabling your attendees to attend the NRIA sessions and be part of the bigger picture.

Tax and Primary Production

For more information, write to nriainfo@nria.org.au

Collective Marketing – what are the choices?

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The magazine of New Rural Industries Australia Issue 4 June/July 2011

Global “Worming” Irrigation practices & systems Agritourism: Connecting communities

Inside A word from the Editor Welcome Advocacy Farm tips

NEWS: NRIA and SAI Platform – an opportunity for mutual benefit Weeds, bugs and lurgies – call for expressions of interest New wax flowers Aquaculture – salvation for food security Alpacas defend against foxes Mislabelling and misrepresentation dealt a blow Kangaroo industry strikes back Switching from goats to Dorper sheep ain’t always the best idea Hawkesbury Harvest model keeps expanding

PROFILES: 12

AUSTRALIAN NATIVE GRASSES

4 5 16 18 6 6 6 7 7 8 8 9 10 11

Ian Chivers of Native Seeds LOOSE LEAF TEA

Corinne Noyes of Madame Flavour Pty Ltd OLIVES

TRUFFLES

Marcus Jessup of Tamar Valley Truffles

COLLABORATION: Surviving failure

By Glen and Anthea Mitchell

Find the right people and let them get on with their jobs

By Peter Fritz and Jeanne-Vida Douglas

What is the answer to generate interest in new industries?

By Doug Stapleton

Non-believer Central West sheep farmer converted

By Debbie O’Neill

Finding the right oil By Murray Hunter

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

contents

Nick Andrews of Woodlands Olive Grove

A word from the Editor The Passion to Profit team made a gigantic leap last issue and went online. By doing so we were able to shed off high costs for printing and postage, while at the same time, get a better reach to rural industries with our magazine.

to showcase the amazing products and services that the new rural industries produce – both with the view of gaining media and promotion, whilst also enabling producers and supply chain to coordinate and collaborate. The 2012 conference will be held in Victoria and we are looking for potential venues within rural and regional areas, located outside the metropolitan base of Melbourne. Expressions of interest should be sent to nriainfo@nria.org. au – both for potential venues as well as industries wishing to jointly schedule conferences or meetings in and around the NRIA conference.

So far, the decision seems to have been a correct one. As of the 31st of July, our last issue has had more than 2000 readers and we have had over 25,000 page views. With this next issue we are hoping to build this further. Based on feedback from a number of sources, people are enjoying Passion to Profit and passing it on to friends and industry – which is frankly, the point and very purpose of our magazine. So we are pleased with this.

Enjoy this August/September issue of the magazine! Lana Mitchell Editor nria.info@nria.org.au

We always welcome contributions and we very much want to feature some of the many new rural industries that we have not yet been able to touch on – such as aquaculture, camels and buffalo, farmed game birds and rabbits, Asian vegetable growers and so on. If you are involved in one of these industries and would like to be included in the next issue of Passion to Profit, please do contact us. On a similar subject – we also want to concentrate on taking up some more of the key issues that present themselves to new rural industries – such as export, developing production protocols, setting up and succeeding as a small business, and so on. If you are an expert in one of the many common subjects relating to building a business and industry, we want to include features in upcoming issues – so drop us a line. The other key NRIA news is the fact that the 2012 NRIA Conference is in planning. Our inaugural conference (held at Jupiter’s at the Gold Coast in November of 2010), was a huge success with over 300 delegates and 35 exhibitors. The 3 day event included a Trade Show, a feast of food from the new rural industries, a stimulating program of speakers, fashion show, gala dinner and several publication releases of significance.

Passion to Profit the magazine of New Rural Industries Australia ISSN 1838-6008

Passion to Profit – the magazine of New Rural Industries Australia, is published online every two months, free of charge. It is sent directly to members of New Rural Industries Australia as well as to new rural industry peak bodies and allied industries. Membership to NRIA available at www.nria.org.au. All rights reserved. New Rural Industries Australia Endeavour House, 2/106 Capt Cook Cres. Manuka, ACT 2603, Australia. Advertising: For advertising rate card contact and all ad bookings, email advertising@nria.org.au. Editor: Lana Mitchell. lana@nria.org.au Editorial Contributions are welcome and should be emailed to the editor. Designer: Cheryl Zwart of Orphix Publisher: New Rural Industries Australia Advertising: advertising@nria.org.au Copyright: No material published in Passion to Profit may be reproduced in whole or in part without the written permission of the New Rural Industries Australia.

This next planned conference will be all of this, plus more. In fact, in an effort to best cater to the new rural industries, the next conference is going to include a forum to give industries and individuals the opportunity to have their say on key issues they feel need to be addressed. It will also be designed

COVER Photo:

Wild kangaroo – see story on page 8 for an update on the Australian Kangaroo industry.

Disclaimer: The publisher reserves the right to refuse any application considered inappropriate. No part of this magazine may be reproduced in any form whatsoever without the written permission of New Rural Industries Australia. Whilst every care is taken to ensure the accuracy of the information contained within the magazine, the publisher, printer and their agents cannot accept responsibility for error or omission. Views held by contributors are their own and do not necessarily coincide with those of the publisher or editor. Advertising is published subject to the terms and conditions of the Passion to Profit rate card 2011, available through advertising@nria.org.au.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

What is the NRIA? NRIA works to be a comprehensive, one-stop source for valuable information. We work to keep our members abreast of news and issues. We provide opportunity through conferences, workshops, events and our magazine for networking and developing business relationships that build your business. We also assist people to solve problems and improve their bottom line.

Background In 2009, the Rural Industries Research and Development Corporation (RIRDC) hosted a forum of new industries where participants recognised the benefits of information sharing and cooperation with others. Industry leaders agreed on the need for an industry alliance, representing new and emerging Australian rural industries, to maximise the economic benefits Australia gains from such industries and to encourage new industries. This stimulated the development of NRIA. We are now 1½ years old, we have seed funding, a growing membership and a number of alliances. Our first (and very well attended) conference was held late last year and we have also held a series of workshops in recent months on the subject of weed control and minor use chemicals. Our next conference is planned for March of 2012, in Victoria. The NRIA is not an industry body of industry bodies – nor does it replace existing industry bodies. We are here to provide an additional link, an additional supply of information and assistance, and also to provide a network of like-minded, innovative people, working to start, develop, build or further expand one or more Australian new rural industries. The NRIA provides individual participants and smaller industry-specific groups with a far more powerful voice and the collective strength to lobby much more effectively. We also work to promote the new rural industries and build the public demand for our diverse products. JOIN US today!

NRIA provides information and collaboration on the many subjects common to all new rural industries:

• Starting up – business planning, feasibility studies, Seed Financing, market research • Farm Production issues – growing, managing • Water Supply/Efficiency/ Irrigation • Quality control • Manufacturing/processing • R&D • Export/Import • Commercialisation of new products • Market Development • Promotion and Sales • Staff issues–hiring, regulations, firing, personnel control • Pests and Diseases

• Breeding (plants and animals) • IP – trademarks, copyright, PBR, patent • Finance/Cash Flow/ Bookkeeping • Internet/E-Commerce • Training/Education • Climate Control • Grants/Funding • Forming Cooperatives/ Associations/Industry representation • Strategies to tackle competition/similar imported product • Energy conservation/solar/ co-generation/tri-generation, alternative energy sources • Tax • Legal/Regulations

Building alliances Meltwater News Pty Ltd, an international company specialising in media monitoring and provides us with the latest news for our members on key new rural industries. Farm Plus Ltd, a company that specialises in the creation of knowledge data bases on specific subjects is building a knowledge portal for NRIA members, to be completed and available soon. This will give a comprehensive search engine for the many subjects common to new rural industries. AgTech Ltd, a company that owns Farm Minder, Pest Genie and other agricultural software, gives members of NRIA major discounts to subscriptions to the Farm Minder system, giving them access to up to date chemical MSDS information, software for recording/tracking chemical usage, compliance with strict OH&S laws and more. Plant Health Australia. NRIA is an associate member of Plant Health Australia, so any industry body registered as a member of NRIA, is an automatic member of Plant Health Australia and its industry can receive the benefits of NRIA’s associate membership with PHA if there is a disease or pest outbreak in that industry.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

WElcome

NRIA stands for New Rural Industries Australia. We are a company with the purpose of to facilitate the development and building of capacity of new and innovative Australian rural industries.

NRIA and SAI Platform – an opportunity for mutual benefit The SAI (Sustainable Agriculture Initiative) Platform is an international organisation of large-scale food industry members with an active branch in Australia. SAI Platform members are always seeking new sustainable products to enable them to have a unique edge in the market. (See www.saiplatformaust.org for more information on the SAI Platform). NRIA is an organisation comprising many diverse and rapidly growing rural industries. Many growers are small-scale producers, but with big ideas. These innovators with new products are often limited by constraints of land, capital and expertise from being able to bring their products to a much broader scale. NRIA is developing an exciting pilot project, through which members will be able to present directly to the SAI Platform members and to seek their involvement with new products. SAI Platform members may consider commercial arrangements that fit their sustainability criteria, and begin a dialogue to determine how they might work together to break through the barriers that are currently preventing the greater use or increased production facing a new product.

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New rural industry producers seldom get the chance to put products in front of big food industry players, where the opportunity for commercial collaboration could result. We will, therefore, work carefully on this pilot – and look forward to sharing its results with all of you in coming months.

Weeds, bugs and lurgies – call for expressions of interest NRIA members will be aware that any herbicides that they use on crops for the control of weeds need to be applied according to the methods and only on those crops that are listed on the label. But for many new and emerging industries the labels do not list their crop and this means that chemicals that are applied are done off-label. This may be illegal

in some States, but there may not seem to be an alternative. This is where our new project comes in. RIRDC has sponsored NRIA to investigate the opportunity to get ‘Minor Use’ permits for specific chemicals for a range of crops. For some chemicals this may be an easy exercise where data on usage patterns and safety are readily available, but for others this may be more difficult and field testing may be required. This is being developed now following a workshop held recently that included the regulators, the chemical companies and representatives of many of the plant-based new and emerging rural industries. Future issues of this magazine will provide more information about how this project is progressing. In addition to the above, NRIA has now also been sponsored by RIRDC to look at the same issues in relation to insects and pathogens. This project will apply equally to the animal based industries as well as the plant based industries and will be kicking off soon. We will be looking for representatives of the various new rural industries to attend workshops currently in the early planning stage. If you are interested in being involved then please email us at nria.info@nria.org.au.

New wax flowers Waxflowers are Australia’s major native flower crop and the largest export flower crop with key overseas markets in Japan, the US, the Netherlands, Canada and southeast Asia. Three new varieties of waxflower developed by the Western Australian Agricultural Authority have recently been released. The initial release is restricted to cut flowers growers in WA, with WAFEX to co-ordinate the commercial supply of propagation material and plants, and be the exclusive marketing agent for distribution in both the export and domestic cut flower markets. WAFEX managing director Craig Musson said it was exciting to have access to the new varieties which have yet to be given formal names. The Rural Industries Research and Development Corporation last month announced a research project aimed at helping Australian wildflower growers maintain their competitive edge in the global flower industry. RIRDC Wildflower and Native Plants Program senior research manager Alison Saunders said the project would use the technique of somatic fusion to try to speed the development of new waxflower varieties with red flowers, coloured bracts and extended flowering periods.

Alpacas defend against foxes

Aquaculture – salvation for food security A recent Time Magazine article by Bryan Walsh entitled ‘The End of The Line’ shines a floodlight on rapidly declining wild seafood stocks. It points out that although we have long grown our fruits and vegetables and raised animals for meat and dairy products, ‘fish are the last wild food’. According to the UN, 32 percent of the world’s fish stocks are overexploited or depleted. In Australia, Aquaculture is the fastest growing primary industry sector and continues to be an important part of Australian fisheries production. Over the decade to 2007-08 aquaculture production has doubled from 29,300 tonnes to 62,500 tonnes. The gross value of aquaculture production in 2007-08 was $868 million with the most valuable aquaculture species being farmed salmonids, (salmon and trout). Together they accounted for 34 percent of total production volume. The second most valuable aquaculture species was farmed tuna with the value of farmed tuna production in South Australia rising by $49 million to $186.7 million. In the next 20 years, it is estimated that we will need an extra 37 million tonnes of fish to meet global demand. With limited room for expansion in wild catch fisheries most of the additional supply will have to come from aquaculture. The goal for the near future is to aim for 100 000 tonnes of finfish by 2015. Domestic demand for seafood is increasing in Australia. In the late 1930s, Australian seafood consumption was 4.9 kilograms per person, by 1998-99, annual per capita consumption had more than doubled to 10.9 kilograms, or about 10 percent of the country’s total unprocessed meat intake (ABS, 2000).

As NSW farmers prepare for the lambing season they may have an unusual ally in the war against foxes. Carwoola alpaca breeder Shane Read said he had already received a number of calls from farmers across the state who were interested in the animal’s ability to guard against fox attacks. Mr Read has bred alpacas since 1998 and said the animals that weren’t sold for their fleece or for breeding were castrated and sold as wethers to guard livestock. He has already sold about 30 wethers this year. “Alpacas have a natural instinct that makes them wary of foxes,” he said. “They are known for chasing them away and will protect anything from newborn lambs, chooks, or even people. “It’s not uncommon for farmers to watch foxes come towards their lambing ewes, see the alpaca and walk around the paddock because they know they are there.” Mr Read said two wethers in a 100-acre paddock would be enough to protect 200 sheep from fox attacks once they had bonded with the herd. Bonding usually takes two to three months. “They wander with the flock acting like they are sheep, and if anything they aren’t sure of comes near the herd they will make an alarm - like a scream - to notify the rest of the group that something is going on,” he said. Mr Read said an average alpaca wether cost just under $500 and lived for about 15 years.

Spotted anything

unusual?

NOTHING WILL PROTECT YOUR CROPS AND THE ENVIRONMENT MORE THAN A GOOD HARD LOOK It is important that you are aware of the risk. If you spot anything unusual on your crop or in the general environment, call the Exotic Plant Pest Hotline on 1800 084 881. The call is free (except for mobiles) and early detection will help protect your farm, your industry and the environment. For more information visit: www.phau.com.au/biosecurity

TLINE NT PEST HO EXOTIC PLA

1 18 0 0 0 8 4 8 8

Improving national biosecurity outcomes through partnerships

Mislabelling and misrepresentation dealt a blow Following a rigorous standards development process involving multiple industry stakeholders – and almost 800 public comments – Standards Australia has approved a new olive oil standard that will bolster consumer protection. “The new standard will establish a benchmark for olive oil quality to ensure that consumers get the product they pay for,” said Colin Blair, Chief Executive Officer, Standards Australia. “Olive oil can be found in virtually every kitchen pantry and this standard will result in better quality products for everyday consumers,” Mr Blair said.

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Mr Blair said the public comment process attracted significant public interest due to concern regarding the quality and consistency of olive oil products.

The new Australian Standard for Olive and OlivePomace Oils will: • Clearly outline different grades of oil – whether fresh or refined • Unambiguously define what constitutes Extra Virgin Olive Oil • Include the most current and effective testing methods for quality and authenticity • Provide a technical basis for ‘best before’ claims • Provide labelling requirements to minimise consumer confusion • Crackdown on misuse of the words: premium, super, pure, light/lite, extra light/lite • Require substantiation of words describing country/region of origin • Require substantiation of processing methods (e.g. cold pressed, first extraction) • Accommodate the natural variations that occur in different countries, olive varieties and regions, without compromising the ability to test and verify quality “The standard responds to legitimate community concerns and will result in a more transparent marketplace with better quality products on our shelves,” Mr Blair said. Mr Paul Miller, President of the Australian Olive Association, welcomed the standard as a significant step forward for the industry. “This voluntary standard developed with input from the entire supply chain is a world first in many

respects. The standard is a game-changer for the entire olive oil industry from producer to consumer. “The standard promotes and protects authentic products, and puts consumers in a much stronger position when it comes to making informed choices,” Mr Miller said. Standards Australia is an independent, not-for-profit organisation, recognised by the Australian Government as the peak non-government Standards body in Australia. They developed the standard in consultation with stakeholders including retailers, importers, consumer associations, government bodies, scientists and olive oil producers.

Kangaroo Industry strikes back The kangaroo industry is hitting back at attempts to cull its commercial interests, under attack from the University of Technology Sydney’s THINKK. The university report claims 200 years of animal welfare rights are being usurped by a government backed kangaroo industry that is “impossible” to regulate. The report’s most controversial feature was its attack on the link between government and industry: that commercial harvesting was good for the environment because it reduced the damage that an over abundance of kangaroos dealt to the land. Former Nyngan kangaroo meat processor Tom Thompson described THINKK’s claims as the “greatest rubbish in the world” attesting to a “glut” of kangaroos. Mr Thompson said a downturn in world leather prices and a Russian ban on kangaroo meat for health reasons had impacted heavily on hunters. THINKK is using the financial hardship of shooters and a poor 2008/2009 industry profit of $50 million to argue the commercial culling of kangaroos is “overvalued” and not nearly as important as the industry claims. Meanwhile Mr Thompson and other industry figures say it remains an important source of revenue to regional areas. The Kangaroo Industry Association of Australia has attacked the science underpinning the report saying THINKK had no credibility and was engaged in “misinformation”.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Tight supplies of goat meat A recent surge in goat prices is a reflection of the extremely tight supplies this winter as a result of some producers, in recent years, chasing the big returns from prime lambs. Per some reports the tight supply has been due, in part, to a number of goat producers moving over to Dorper sheep instead. Dubbo agent, Joe Portelli, P.T. Lord, Dakin and Associates, said “close to 45 per cent” of stud and commercial goat producers – mainly from western parts of the NSW – had made the switch. “I was talking to a producer the other day who hooked some bush goats, and the top end of those bush billies made $98 up to over $100. They averaged out at $65 because there were some lighter ones, but we haven’t seen that in my life time.” Even so, he said a lot of stud Boer goat breeders had moved into the stud Dorper industry. He said the Dorper sheep and Boer goats were similar in a lot of ways. “Like Dorpers, which are self-shedding sheep, you don’t have to shear your goats. They more or less look after themselves and they do like that Western area, they seem to do a bit better there than the wetter climates,” Mr Portelli said.

Pulse research moves ahead The Victorian Government and the Grains Research Development Corporation have jointly funded a $20 million pulse research program.The money will be spent on developing new pea, lentil, chickpea and faba bean varieties for higher rainfall cropping areas. Agriculture and Food Security Minister Peter Walsh says the research will mean more staff for the Department of Primary Industries at Horsham in western Victoria. “We all know that the expansion of cropping has moved further south in Victoria, into the higher rainfall areas, and they need rotational crops, of which legumes obviously are a perfect one for that to give them not only nitrogenous build up, but also a break crop from their cereals or canola.”

National Peak Body representing the

Olive Industry of Australia Stay informed about the Australian Olive Industry

Visit our website to find out more

fresher tastes www.australianolives.com.au

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Hawkesbury Harvest model keeps expanding A total of 60 farms and 20 other food and rural related destinations are within easy striking distance from the centre of Sydney, after last month’s expansion of the Hawkesbury Harvest to the Illawarra Region. Hawkesbury Harvest has extended its boundaries into the Illawarra Region, with the release of the seventh edition of the Farm Gate Trail map at Shoalhaven Heads last month. “The new map adds 23 quality destinations in the Kiama and Shoalhaven Shires,” said David Mason, NSW Department of Primary Industries (DPI) urban agriculture specialist. “This makes a total of 60 farms and 20 other food and rural related destinations within easy striking distance from the centre of Sydney. “The 52 page map is segmented into five distinct place-based agritourism destinations, extending from the mouth of the Hawkesbury River at Brooklyn right around the perimeter of Sydney and down past Nowra on the South Coast.” The first Hawkesbury Harvest Farm Gate Trail map released in October 2000 consisted of 13 destinations in the Hawkesbury local government area.

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“It was a two colour A4 map printed off on a home printer,” Mr Mason said.

The Farm Gate Trail now extends to provide the Sydney Hills to Brooklyn Harvest Experience, Hawkesbury Harvest Experience, Penrith Valley Harvest Experience, Wollondilly Harvest Experience and now the South Coast Harvest Experience.” Now Mr Mason, foundation chair and current board member of Hawkesbury Harvest is working with Southern Inland Regional Development Australia to develop a process and structure to provide a range of agritourism experiences centred on the towns of Young, Boorowa, Harden, Yass, Gundagai, Tumut, Batlow and Tumbarumba. “Those involved are using Hawkesbury Harvest as a model for the development of the particular

experiences they can offer across this wide geographical area of southern inland NSW. Mr Mason is engaged as a mentor in the process. Mr Mason sees agritourism as just one way of increasing the economic viability of family farms and rural communities. On a Churchill study tour in 2006, he was exposed to the concept of multifunctional agriculture in the Netherlands. “In Europe there is a transition of agriculture from the post World War II modernisation era to a new era of rural development, in which agriculture is seen and dealt with as part of a mix of disciplines and stakeholders in the rural environment,” he said. “Family farms where off-farm income brings urban capital into rural areas, agri-tourism, direct marketing activities such as farmers markets, value adding, educational activities such as cheese and bread making, natural resource and landscape management, regional identity through regional branding of region-specific produce and products, and organic farming, are just some of that mix.” Factors contributing to this include the rapid urbanisation of Europe, free trade and the costprice squeeze of agricultural production. Mr Mason recently introduced multifunctional agriculture as a concept to the NSW DPI rural support worker program. “The strategic emphasis of that program is on developing resilience and capacity building in farmers, farming families and rural communities,” he said. “The concept of multifunctional agriculture has much to offer in this regard.” Contact David Mason, Richmond, (02) 4588 2144, david.mason@industry.nsw.gov.au Source: Agriculture Today/Dept of Primary Industries

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Ian Chivers Native Seeds Seeds of Australian native grasses Native Seeds has been operating for more than 25 years, initially as a purely R&D company investigating the potential for use of our native grasses, but expanding in recent years to commercialise the outputs from that research. We still maintain a very active R&D program as well as production and sales of seed.

Q: What inspired you to get involved in a new rural industry?

I came from a conventional seed industry business using introduced grasses and saw that the native grasses offered significant potential for use in low water use and low input intensive situations where the introduced grasses were failing. I also saw that the grasses were attractive for landscaping, useful for pasture, bulletproof for rehabilitation and obvious choices for lawns and gardens. These opportunities seemed too good to be ignored but no-one was doing any work with them.

Q: What have been the pitfalls you have overcome? How?

I thought it would be a pretty easy thing to develop technology for these grasses that would make them easy to harvest, clean, sow, establish and maintain. I was so wrong. While some have been easier than others there are still many questions that remain unresolved and R&D continues on all of these fronts. Without systematic, well structured research we would not be able to produce high quality seed and to get good results with the sowing of the seed.

Q: What are 5 tips you could give others in new rural industries?

1. Make sure there is a market for your product before you do anything. 2. Produce only a limited quantity of your product initially for test marketing. 3. Know your product very well and make sure you can answer with confidence any queries you clients may put up. 4. Get to know your clients, understand their criteria for using your product. 5. Produce clear and readily understandable information about your product â&#x20AC;&#x201C; always remember that your clients are intelligent people as well.

Q: What is your future vision for your business?

Native Seeds is set to take advantage of the huge natural variability within our native flora to select useful types for a wide variety of applications such as rehabilitation, pasture, inter-row groundcover and landscaping. We want to expand our product range but will only do so once we have confidence in our products and knowledge. www.nativeseeds.com.au

profile

Q: What do you consider your successes? What do you attribute these to?

We can now reliably produce high quality seed and have a good toolbox of techniques for a number of species. This is a strong advance from when I started the business. The R&D component has been the essential contributor â&#x20AC;&#x201C; it has allowed us to go to the market with confidence in our products and our methods.

11 Native Wallaby Grass

Corinne Noyes Madame Flavour Pty Ltd

Loose leaf teas in infuser pods (silky biodegradable bags) and pure loose leaf teas. Madame Flavour was incorporated in 2008, moved out of the spare room at home in 2009 and we are now available in 2000 supermarkets, cafes and hotels in Australia, Hong Kong and New Caledonia as well as being served on Virgin airlines.

Q: What inspired you to get involved in a new rural industry?

I bought 46 acres of temperate rainforest in South Gippsland around 10 years ago and my neighbor pointed out to me shortly afterwards a plant growing wild called Mountain Pepper. I had never heard of it but was thrilled at the prospect of being able to wild harvest. From that point I became involved with the local Prom Country Bush Foods Association, potentially as a grower, but with a marketing background was always more likely to find ways to market and sell these wonderful spices. This came to fruition when several years later I started the Madame Flavour tea company and used the opportunity to include Australian native spices.

Q: What have been the pitfalls you have overcome? How?

profile

In terms of my involvement with Australian native spices, the pitfalls have been mostly around supply â&#x20AC;&#x201C; finding sufficient quantity of the more esoteric spices in particularâ&#x20AC;Ś for example, I had to change a blend to replace native River Mint, which is a wonderful clean, high menthol native mint as I simply could not source sufficient quantity. Sourcing peppermint also continues to be a challenge. In broader business terms, generating sufficient sales; as a small new entrant; to meet supermarket requirements, managing cashflow and my own nerves have been the key challenges, overcome with a combination of strong marketing (my background), micromanaging the finances, and personal development.

Q: What do you consider your successes? What do you attribute these to?

Gaining and maintaining ranges in supermarkets in a very competitive category; starting the business with very limited funding and growing it to a healthy financial state in a short period, developing a range that customers genuinely love and feel connected to. I attribute these successes to my many years of business training combined with choosing to run this business according to my own values; which are more about connection, quality and delighting customers; not only about growth and profit.

Q: What are 5 tips you could give others in new rural industries?

1. Understand what your customers want and over-deliver. In the supply of inputs; it might be consistency of quality and availability, speed of response, reliability, ease of delivery, provision of lab tests. 2. Be clear on what you really want ( as opposed to think you want or should

want) from the business and make that your vision/mission. It can evolve as you go, so review regularly. 3. Ensure you pay yourself first and fairly. 4. Band together with others to make your offer as widely known/promoted as possible – it is often difficult for manufacturers wanting to source ingredients direct to find growers. 5. You must be passionate about what you do for your own business – it carries you through the lows and the tough and stressful times.

Q: What is your future vision for your business?

We will continue to consolidate in Australia. I will spend the next three months in Paris, exploring opportunities for Madame Flavour there, but also absorbing new ideas to bring home. My vision is to get the business to a point where we can set up a not-forprofit project and funnel a substantial percentage of profits to support it. www.madameflavour.com

News Flash! Exciting times for Madame Flavour and the specialty tea category as the company marked the beginning of hot beverage season 2011 with the launch of a new advertising campaign in magazines nationally plus heavy sampling. Consumer reaction has been immediate, with scan sales lifts across the country. One independent buyer was quoted after first ad appeared in April as saying ”stock flew off the shelves this weekend”. Reaction to Madame Flavour’s recently launched new teas, Madame’s Special Blend 18 and Grey de Luxe 18 has been excellent, with sales far outperforming the previous versions. “The tweaking of formula’s, blend names and moving to a smaller 18 pack at slightly lower price point has made all the difference.

After just a few weeks, scan sales are twice that of the previous blends.’ said Madame Flavour Managing Director, Corinne Noyes. In addition to advertising and sampling, Madame Flavour has developed elegant bonus tins for these two new blends. The Collector Edition tins will be available at the same price to consumers from June 2011 in place of the standard cartons. Increased sales of Madame Flavour teas are adding value to the specialty tea category, rather than de-valuing or shifting sales from one brand to another. And with the brand recently selected as the tea served on board Virgin Blue domestic flights, thousands of new potential customers will be able to trial Madame Flavour.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Nick H. Andrews Woodlands Olive Grove

Woodlands Extra Virgin Olive Oil; Woodlands Table Olives Woodlands Olive Grove is owned and operated by the Andrews family and their team of professional olive technicians. It is located in the Hunter Valley and consists of more than 6000 olive trees. The business has been marketing primarily business-tobusiness; serving food service clients (restaurants) and some of the world’s largest passenger cruise ship companies based in Australia.

Q: What inspired you to get involved in a new rural industry?

Olive growing seemed to be the least intensive agriculture for our relatively small rural property (compared to the size of typical farms and the vineyards in our region).

Q: What have been the pitfalls you have overcome? A lack of knowledge about the natural changes that take place throughout the year; the seasons, pests, and our crop. We have tackled these pitfalls by seeking out the advice of people in the know; mostly paying for it (consultants and contractors), but often being surprised by the generous and free advice of other growers or people in the community.

Q: What do you consider your successes? What do you attribute these to?

Q: What are 5 tips you could give others in new rural industries?

1. Seek out good quality consultants and contractors to be part of your team (you may need to try and sack a few along the way); 2. Become part of the community and build a social and support network (share ideas and seek advice); 3. Understand the market for your product (research it, test it) and tailor your outputs and prices to meet what the market wants; 4. Try to take control of as much of your production process as possible and feasible (vertically integrate); 5. Plan for and be careful with the use of your capital (it’s easy to waste it or to use it ineffectively).

Q: What is your future vision for your business? Developing our brand and growing our market share, and building on our production infrastructure to drive down our costs, further enhancing the quality of our output. www.woodlandolives.com.au

profile

Our success in building the grove, its trees and infrastructure, progressively over the years,

mostly without financial reward, and still being here. I attribute this to persistence, a passion for just ‘getting it right’, capital, and the help and contribution of alot of good people.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Marcus Jessup Tamar Valley Truffles

Perigord Black Truffles

Q: What inspired you to get into the rural industry?

Food has always been a passion for members of our family and after encountering a local grower and being introduced to the mystique of truffles we could not pass up the opportunity to become involved in such a new and interesting industry.

Q: What have been the pitfalls you have overcome? How?

Contending with nature is always a challenge from wildlife damaging the trees, to pests, excessive rainfall and wind but most of the effects of nature have been controlled with the use of wind breaks and fencing. So far we have held off using snail bait and other pesticides as we would rather not risk compromising our product.

Q: What are 5 tips you could give others in new rural industries?

1. Establish the demand for your product via market research. For example, will the market be over supplied if too much is produced? 2. Try to establish whether the product has longevity or whether it is a passing trend. 3. Try to evaluate the growth/depreciation of the product over time to help assess whether the project is financially viable 4. Make sure your property is in the correct geological and physical location with correct soil type, climate and rainfall as well as close proximity to transport and your target market. 5. Be aware that some industries such as truffles can be a high risk and long term investment.

Courtesy of Will Swan and the Examiner Newspaper

Tamar Valley Truffles is a family owned and run business located on the banks of Lake Trevallyn in the Tamar Valley, Tasmania. Three thousand oak trees were planted in 2001 and the first truffle was found in 2005, since then production has tripled each year and we have been producing high quality truffles to some of the top restaurants in Australia.

Q: What is your future vision for your business? To increase awareness of the Australian Truffle Industry, both here in Australia and Worldwide, whilst establishing Tamar Valley Truffles as a leading producer of premium quality truffles.

I feel the biggest pitfall to our Industry is the difficulty in marketing the product and maintaining the value of truffles as production in Australia increases.

Q: What do you consider your successes? What do Despite only being a family run business we have supplied truffles to some of the top restaurants in Australia and overseas and in many cases Tamar valley Truffles have been requested specifically for their quality, aroma and presentation. This has been as a result of our attention to detail and determination to only sell truffles of the highest quality. The support and commitment of our distributors is also invaluable.

profile

you attribute these to?

Advocacy tips

By Chris Melham

“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has”. (Source: Margaret Mead). Fundamentally, advocacy is about speaking out and making a case for something important. It is a political process set in train by an individual or special interest group with the main objective being to influence public-policy to protect the interests of members of the group. In the case of new rural industries, it would be to protect the interest of the industry and its stakeholders, typically from a piece of legislation or proposed government policy that stands to impact negatively on the industry.

advocacy

Advocacy can be a challenging concept because there is no one set of rules about where to begin, how to begin and what constitutes effectiveness. The advocacy activities employed by an industry group can include media campaigns, public education, litigation, public rallies, ministerial and bureaucratic briefings. Lobbying is a common form of advocacy where a direct approach is made to legislators on an issue which plays a significant role in modern politics. French farmers are famous for conducting outrageous public rallies to state their case in Brussels over low milk prices (see photo).

Advocacy Case Example: Australian Seed Federation The Australian Seed Federation (ASF) is the peak industry representative body for the sowing seed industry throughout Australia and it resolved to deregulate all state and territory seed marketing legislation in preference for self regulation. The advocacy strategy to achieve this objective was to undertake a wide ranging consultation process with industry, government, consumer organisations, and other interested parties to harness the necessary support to deregulate the seed industry by replacing legislation with a National Code of Practice. The Code would promote industry self reliance and introduce a national marketing perspective given the industry operates in a global, not state marketing environment. The tool used to achieve the objective was the formation of a national seed working group comprising representatives from industry, government and consumer groups (i.e. seed consumers). Following two years of extensive

A protest in Brussels over low milk prices. Source: Katherine Mangu-Ward, 6 October 2009.

consultation, the Working Group supported industry deregulation. The success in deregulating the seed industry is largely attributable to the decision made by the Australian Seed Federation ‘to consult’ with relevant stakeholders, and a commitment made by its members to adopt high standards of conduct in the production and marketing of seed for sowing. The working group was the advocacy forum used to demonstrate this commitment which resulted in a ‘win win’ situation for government and industry. A not for profit organisation is the primary advocacy vehicle used by rural industries to influence public policy in Australia. In some cases, a professional lobbyist may be contracted to advocate on behalf of an industry group in an attempt to influence public policy. New rural industries can increase their chance of success as industry advocates by embracing unification, and by forming an industry association, while collaborating with similar or larger organisations on the same.

McLaren Vale grape growers, winemakers and tourism operators protest in convoy to show their objection to housing being built on farmland at Seaford Heights. Source: AAP | 31 October, 2010

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

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Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Toll free:1800 214 882

Publish electronically with NRIA Passion to Profit, the magazine of New Rural Industries Australia, is published online through www.issuu.com. From there it is publically available and can be sent, embedded, downloaded, printed and bookmarked. As a service for new rural industries of any kind, if you have a newsletter, magazine,

journal or publication that you would like to have published using the same medium, NRIA can do this for you – making your publications available to all subscribers and readers of NRIA. All that is required is a PDF of the document. As an example – the Australian Seaweed Association has published their first newsletter with us,

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and we have also published Floral Focus, a newsletter of the wildflower industry. For more information, contact nria.info@nria.org.au.

The importance of safely storing farm chemicals

farm tips

Chemicals are used on farms for a variety of purposes. Storing farm chemicals safely is just as important as safely handling them.

The laws governing the storage of chemicals include state and Commonwealth OH&S legislation and regulations and the Australian Dangerous Goods Code, which aim to ensure that risks to human health and the environment are minimised. Some of the obligations are set out below. Products should be stored in their original containers and all containers must be correctly labelled. The chemical storage area should in most cases be bunded to contain any spills, and must have the correct signage, such as placards, to assist emergency services in the event of an emergency. Incompatible chemicals must be segregated as some chemicals may react adversely when combined. Chemicals with similar properties (e.g. flammable, toxic or oxidising) are grouped together under the same Dangerous Goods classification. Where chemicals of certain classifications are not compatible with chemicals of other classifications, they must be segregated.

A register is required to be kept of all chemicals that are either dangerous goods or deemed to be hazardous. Whether a chemical is a dangerous good or a hazardous substance is indicated in the product’s material safety data sheet (MSDS). Employers must provide access to MSDS for chemicals used in the workplace to employees. Risk assessments must be undertaken for stored dangerous goods and hazardous substances. Consequently, managing farm chemical storage and compliance is an exhaustive process, but necessary to help protect human health and the environment. Note from the Editor — Members of New Rural Industries Australia (NRIA) are provided with heavily discounted subscriptions to the FARM MINDER® farm management and compliance system, which automates compliance with the above obligations. The online FARM MINDER system assists users with the creation of chemical registers, automatically provides hazard information about chemicals, provides the latest labels and MSDS, notifies users of changes to their product labels and MSDS, prepares the requisite compliance documentation and more. The system, which is continually updated with the latest farm chemical product information, also enables users to manage and plan farm operations. For more details call 1300 673 700.

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

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Surviving failure

present threat.

mbarking on a new business venture can be an exciting time, but it can also be a challenging one. While every business owner aspires to succeed, the possibility of business failure is an ever-

collaboration

According to the Rural Industries Research and Development Corporation report Critical Success Factors for New Rural Industries , published in 2009, “new industries provide a vital stimulus to the Australian agricultural sector because of their potential contributions to future sustainable economic growth and diversification.”

“However,” the report continues, “because of their pioneering nature they face many challenges and obstacles. Some new rural industries successfully overcome the developmental difficulties and grow to become sustainable, major industries; others remain viable niche industries; and yet others fail completely.” At an individual level, failure can be a scarring experience. Glen and Anthea Mitchell know only too well the heartbreak of trying to realise their dreams in a new rural industry. In the mid-1970’s, at the tender of twenty-one, Glen and his wife decided they would try to grow sim carnations on their property near Wangaratta in northeastern Victoria. “I came from a farming background, but I didn’t want to grow cattle or wheat like my father. We considered other industries such as beer and venison, but in the end we decided to grow flowers. My grandmother was an avid flower grower, and always had a beautiful flower garden, so we decided to have a go.” Travelling to Melbourne to gather advice, Glen and Anthea decided that they would build a glasshouse. They visited Tasmania and South Australia to research glasshouse designs, and also made contact with local florists to ensure that they had a suitable market for their product. “We spoke to local florists about whether they would be interested in taking our flowers, and they all seemed quite excited that they could source a

By Glen and Anthea Mitchell

product locally. So we decided we would give it a go, and build the glasshouse ourselves,” Glen said. But from the outset, things got off to a shaky start. In building the glasshouse Glen and Anthea initially ran into some issues obtaining materials for construction, which delayed their plantings. However things started to look up once the flowers started arriving, and the couple excitedly delivered them to the local retailers to positive feedback. “Our early blooms were well received, and when production picked up and we started getting bunches of flowers per week, rather than single flowers, the florists told us they were really keen to continue receiving our stock.” But as production increased, Glen was told that they couldn’t handle the quantities that were being produced. “It was very disappointing. We had been in communication with the florists for months about the quantities we were expecting to produce, but it would appear that they didn’t really believe that we were actually going to produce those quantities. Once they told us that they wouldn’t accept any more flowers, we found ourselves in a difficult situation of having to find other ways to move our flowers.” A couple of years later Glen and Anthea decided to switch to hydroponic production, a decision which was fraught with other problems. “Back in those days, hydroponics was a pretty new thing. We managed to source our nutrients from a chap who was growing tomatoes successfully, and the plants were growing really well. But when the buds opened, there were no petals in them. We sat there scratching our heads for a while trying to work out what went wrong, until we realised that the nutrients that were fine for tomatoes, were in fact lacking a vital ingredient – boron – necessary for flower production.” After five years, Glen and Anthea had had enough. The local market had changed dramatically, and an increased interest in flower growing from other farmers meant the local market was flooded. “We’d paid back our original loan, and we decided that it was time to move on.”

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Factoring for success In 2009, the Rural Industries Research and Development

• Research the market – understand you competition, know

Corporation (RIRDC) published Turning a good idea into a

your customers, and seek out market information.

profitable venture: A guide to success for new rural industries. The handbook offers the following advice for new rural industries:

• Develop a marketing strategy that identifies your product’s position in the market, and how to get your product into the

• Think and plan strategically – Use a strategic planning

marketplace.

framework to identify opportunities and threats; consider emerging trends over the next 5 years; prioritise investments,

• Establish a supply chain, and think about how you can add value through the supply chain.

and build in contingencies for the unexpected. • Set your goals, and check your expectations by speaking to

• Seek help when you need it!

In reflecting on the contributors to their failure, Glen believes that the main culprit was a failure to make firm arrangements with retailers to sell their product. “I think part of it was that we very young and naïve. We didn’t have contracts with the florists, not that it would have necessarily have made a difference,” Glen said. “We felt very confident that we had done the research, and understood what we were doing. But we feel that other people let us down along the way.” But understanding your market is only part of the story, as Alan Cummine and his wife Sylvia discovered when they attempted to farm emus twenty years ago on their 225 acre property in Gundaroo. Despite doing their homework, as a new industry they found that there were significant holes in the industry expertise on emu husbandry, which led to a lot of time and money being spent on trial and error. “We went into the venture with every belief that we were onto a good thing,” Alan said. “There was plenty of confidence around the potential for success in emu farming at the time. It was being promoted and supported by the National Parks and Wildlife Service, and we assumed that the experts knew everything there was to know about emu farming.” However Alan and Sylvia ran into problems long before they sold a single emu.

“Because we were a small farm, we weren’t able to grow food for the emus, so we had to buy in grain for them. The timing coincided with a spike in grain prices. Within an eight-month period, we were spending twice as much on grain, which was crippling us financially.” They also found there was a lack of husbandry advice for how to handle the large creatures. “There had been a lot of industry talk about establishing abattoirs and specialised facilities for processing of emus, but we discovered that there was very little action on that front.” In the end, Alan and Sylvia decided that they could no longer afford to continue, and after 12 months decided to sell their animals. “We sold them in the end for roughly the same amount that we had spent on them over the twelve month period, so we were pleased to get our money back, not to mention that we were mightily relieved!”

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

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others in the industry. This includes doing your sums.

• Use R&D and industry resources to optimise production

Find the right people and let them get on with their jobs

collaboration

By Peter Fritz and Jeanne-Vida Douglas

rowth can be a doubleedged sword for many business owners. As businesses expand, the owner requires an everchanging series of capacities and capabilities. The skills you will need as the leader of a very large business are different from the skills you need to manage a mid-sized business which are different again from the skills you require as a small-business person or an employee. You need to either constantly update your skills and your role in the business or be good at finding the right people to fill the roles that you can no longer deal with yourself. Growth is a little like going through your first pregnancy. You become so wound up and focused on the growth strategy that you tend to forget that it needs to be followed up with a new management strategy. There are plenty of first-time parents who read every book in the library on pregnancy and labour, then get home and have no idea what to do with the newborn baby. Focusing on the growth rather than the management may leave you with an overwhelming, sticky, noisy mess. The small-business manager needs to be involved in their business at all levels. They need to know everything from profit and loss summaries to fixing the coffee maker, and the sort of people who do well working in a small business tend to be tactical rather than strategic thinkers; people who are good at getting stuff done with a minimum of fuss. There are companies that are perfectly suited to this type of management: restaurants, cafés and other shopfront or retail businesses need managers with the capacity to actually get down and cook the meals, talk to staff and customers, place ads in the local press and clean the toilets if need be. The leader of a large organisation, on the other hand, needs to understand how to create longterm strategies and goals, and how to inspire staff to work toward the same goals. Once a business grows beyond about 15 staff members, it becomes impossible for the owner or manager to continue to have such a hands-on role within the organisation.

As the business grows, small-business managers need to overcome their urge to be involved in every single aspect of the business. The tactical staff members, so fundamental to the initial stages of a small business, are still fundamentally important, but what a mid-sized company also needs is a layer of competent strategic managers, who can organise and inspire. The role of the entrepreneur is to always sell the business, whether it’s by organising partnerships, winning tenders or creating distribution arrangements. The main connection the entrepreneur has is with the outside world, and this connection needs to remain intact as the business grows. This is why you need to figure out how to find and keep good staff before you grow. In order for your business to grow, it’s necessary for the business to run without your direct input. And here’s the secret that small-business owners and a lot of mid-sized-business owners seem never to learn: you can measure people’s output without sitting on them all day. In fact, micro-management is the best way to create resentment and reduce productivity. Creative, intelligent people like to be left alone and be trusted in what they are doing. As such, your role as a manager is to find these people and then leave them alone to get the job done, while you go out to win more business. This approach of stepping away from the day-today operations of the business to focus on strategy and marketing becomes increasingly important as the company grows. But it can be a little like watching your adolescents grow up and take on a little independence; you can’t exactly be peering over their shoulder and watching every move, but you do need some way to ensure that you will find out in a timely manner when things are going wrong. The key here is to set up self-checking mechanisms that will keep ticking over most of the time, and alert you when something is going wrong in the early phase. This is also the growth phase where you need to focus on who you hire and what they will bring to the company. Small or mid-sized companies

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

In three years we doubled the turnover and were able to produce steady, consistent profits. We almost doubled the number of staff working there, and expanded to new cities. Most importantly we were able to use the company’s existing business to develop a line of software, which is now exported back through the original parent company into markets all over the globe. Your staff members are your business partners – without them, your business does not exist. Still, many business owners treat their staff as some kind of parasite, sucking profitability out of the business. In well-run businesses, with good staff, the opposite is true. By seeing staff in terms of costs rather than revenue generation, these employers fail to enable staff, and therefore the company – which, after all, is built on the skills of the staff – can’t realise its full potential. Recruitment is an enormous drain on resources, and it’s often cheaper to pay people slightly more than the market average and create a workplace where people actually want to be than it is to be forever looking for new staff. The extra wage is largely symbolic; it sends a message that staff members are important. That message is more important and relevant than the actual amount, and the message needs to be backed up in other ways to ensure that it gets through. Organisations with a low staff turnover rate grow more quickly because their resources aren’t being constantly drained by recruitment and staff members find it easier to communicate and trust each other more because they have worked together for an extended period. Staff members who have worked together for a long time are also often more productive, especially when working in teams, because their communication tends to be better and their roles more clearly defined as each project is being carried out.

Small businesses stay small, and mid-sized businesses stay midsized, often because they fail to attract good staff —or fail to keep them if they actually manage to recruit them in the first place. Like customers and partners, employees will only get involved in your business if you make it worth their while. Like customers who need great products and services, and business partners who need great opportunities, employees need some kind of fundamental motivation to get involved in a business and stay with it in the long term. Here’s the big secret that most businesses fail to understand about employees: they are not primarily motivated by money. If they were, they’d be in business for themselves. Employees are motivated by security and by the opportunity to come into a workplace where the work is enjoyable and challenging (and where they are treated well). Simple things like doing an orientation on the first day, or ensuring that the new recruit can begin immediately by making sure they have a computer and a phone line ready to go on the day they start, can make a huge difference. Good employees will shop around until they get the best offer, and most will happily forgo cash incentives for the right working conditions and environment. By trying to compete on price rather than focusing on the benefits they can offer as employers over and above large businesses, smalland medium-sized businesses put themselves at a disadvantage. Focus instead on what makes your business the best place to work. An important thing to realise is that an interview is like a sales pitch: – you need to explain why the employee would want to work for your organisation, as much as you need to find out whether or not they would be suitable. Small and medium-sized businesses also often fail to do the sums on creating flexible work practices for employees who are starting a family, or who for whatever reason need to take some time off. Getting good people back again from maternity leave is much cheaper than finding and training new staff. Creating work practices that enable people to work from home or job-share will enable you to keep good staff and transfer skills across a small team. Another benefit of fostering a flexible workplace is that you provide staff with a tangible

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Continued on page 28

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that employ poorly skilled staff and don’t invest in workplace development are doomed to remain small or mid-sized. Growing businesses need smart, flexible people who are committed to the company and happy to take on different sorts of roles when need be. Integrated Wireless, the company that TCG bought for $1, is a perfect example. Freed of the reporting requirements of the larger company, the staff members felt a greater sense of responsibility and control. Working within a smaller organisation, they were able to take charge of the company’s destiny and with a low staff within one year we were able to turn a basket case into a sustainable business.

collaboration

What is the answer to generate interest in new industries?

By Doug Stapleton

his is a question which has perplexed field day goers and people involved in new rural industries for years.

It may seem to many, that the gap between new rural industries and those that are mainstream, is insurmountable. But truly, despite rumours or heresay – there really is no ingrained prejudice against goats, small acreage crops or niche markets. There really is no difference in the commercial value, or market interest in products – except for the fact that mainstream agricultural industries have had more time (and therefore more profits) to build an industry and establish themselves. New rural industries have incredible potential – but in many cases the hard work has not been completed to document and establish viability and profitability. And in the face of this, we have a constantly changing face of agriculture. We have a situation where baby boomer farmers are not seeing the same interest in the farm, from their children, as their fathers saw. In the past there were children who wanted to farm and since there was never enough land, the pressure was on to be innovative, hard working and thrifty so more land or new farms could be purchased to supply the dynasty with sufficient land for the family.

Now only 20% of children have interests in farming so there is a vastly different attitude to farming – and this leaves many of the older generation farmers with no option but to continually tighten the belt and then eventually sell up and move on. This circumstance perhaps explains best why many of the current generation of farmers are resistant to innovation, change and the adoption of new enterprises. In my view, there is little incentive to invest in growth and a wish to stick to existing mainstream enterprises which are well understood, even if not as profitable as they used to be. This often includes either living on less (a form of discrete poverty) or living on capital (savings or by selling some of the farm). Eventually selling up becomes the only option – as an estate, or bankrupcy or on the insistence of family. It is perhaps hard to believe that these options will confront or are currently confronting as many as 80% of farmers, most of which are now well over 60 years old. The impact of this situation can really only be understood by those who have or are experiencing it. It is not surprising that efforts by new industry promoters fall on deaf ears. Perhaps one might add that there is some logic to resistance as well. Older farmers have seen it all. They may even have tried some innovative enterprises or techniques and realise that its not as simple as it is made out, costs more than short term

promised returns and in some cases are straight confidence tricks. Where then, should new industries look to generate interest? How do you get existing agricultural enterprises to diversify and spread the risk? Certainly not by attending local agricultural shows, which are themselves largely rearguard actions by traditional aging farmers to maintain a semblance of integrity and style. Yes, there are “agfests” and field days (small or otherwise) but in some ways such events continue to display that many good ideas that don’t work, or they position new rural industries as cottage industries, non-commercial or hobbystyle farming.

Then there is the corporate approach. This is possibly the most likely avenue for new industry development. Whether by enthusiasts corporatising the industry or existing agribusinesses taking up new ventures. To complete the picture there is the lifestylers, retirees and tree change groups. Some might have a good grasp of the economics and technology required but certainly many don’t. Others might just be “do it from first principles” or romantics who won’t learn from what they are told, let alone read text books and departmental pamphlets. In any event enterprises established by these groups are unlikely to be large enough to be significant or have the economy of scale to be competitive. One might consider the whole issue as a lost case but there are some new industries with potential and nothing succeeds like success. Maybe this is the avenue to use in promotion. Do it well, tell everyone including the press and make sure the story is both true and accurate – a hard thing to do in a world of advertising and fast business.

But let’s look on the bright side. Slowly, more and more new rural industries are becoming established, profitable and commercially-proven ventures. Many different business models are being adopted – with many using the internet to market, sell and promote their products. Collaboration is occurring, cross-industry – and there is a strong push for all farmers to adopt sustainable practices and spread the risk with diversification that strengthens cash flow and viability. Concurrently, there is pressure from consumers for locally produced high-quality food and fibre. There are a large number of existing farmers who work tirelessly to improve production models and look for innovation. And there is an increasing number of smaller rural block owners who want to engage in production of something of worth on their small plot of earth. I think this is where our new rural industries will find the answer.

collaboration

One could suggest the rural doctor training philosophy. That is, to work with school and university students to enthuse them of the benefits of farming. That could be a start though the capital investment and long term professional commitment are, at very least, daunting.

Non-believer Central West sheep farmer converted

By Debbie O’Neill of “Carlowrie”, Condobolin NSW

collaboration

nce upon a time there was… well, yes I’d like to say that becoming owners of Alpacas was part of a fairytale but the raw truth is more like a Stephen King Novel to begin with (although it does have a happy ending).

My husband (long suffering) and I (a NZ sheep farmers daughter) with our two children, a two year old and a one month old, moved back to Condobolin in the Central West of NSW to be closer to my husband’s family and their family farm, to escape the rat race and buy a property of our own. We arrived at the end of 2001 at the start of the drought (not that we knew it then), and bought some older ewes in lamb to Dorset rams – and duly awaited lambing to commence. About a fortnight before the ewes were due to drop the fox population nearly doubled – we had baited from a month prior to lambing but the foxes were still moving in for the main event – the lambing feeding frenzy. We put out over $1000 in fox baits for no apparent effect other than to feed the blighters! The Gent who had owned the property before us, so we found out, didn’t bait partially because he had gone over to cattle and also because he had lost his dog from eating bait. We were loosing up to 10 lambs a night and that was only accounting for those that were left behind not those that were ‘takeaways’ as is the foxes habit. During one evening shooting my husband witnessed 7 foxes working the sheep like a pack of

dogs circling them so that the lambs arrived at the outside of the ewes to be then taken by the nearest fox (this is the Stephen King novel bit)! The upshot of this was a lambing of 63% pretty pathetic considering the effort that had gone in. Out of this frustration was born the idea that there had to be a better way of controlling foxes. I didn’t like the idea of using dogs, left unattended with their natural food source seemed to me to be asking for trouble. The idea to use Alpacas came into its own (I can’t even remember where I first heard about them) and I started to research these exotic creatures. The more I learned the more I was convinced that they were part of the solution to the problem. Next was the sales phase where I had to convince my partner in life and in business that this was the way to go. Working in a very conservative rural farming area didn’t help the cause too much either – to cut a long story short I was ‘allowed’ to purchase 2 wethers to trial. Finding wethers turned out to be a bit harder than we thought, especially with the requirements that we had, but Juan and Carlos (yes, Grand Prix weekend, Mr Montoya would be proud!) were duly brought home and placed with the maiden ewes as all our older ewes like so many others in the district were on agistment. The two boys spent the first month travelling the fence line and the neighbour jokingly suggested that they were doing a good job with his sheep over the fence. With the size of the area that needed to

A fortnight before the ewes were due to lamb, the alpacas started camping with the ewes at night. We lost 8 lambs from fox attack. As I was picking up all casualties each day from the paddock, and accounting for them as to cause of death, I was able to get a pretty good estimate. We were in the unenviable position of having to feed ewes about to drop, hence higher than usual losses. The percentage this year with the help of the boys was 81%. I witnessed the occasional very hungry mangy fox in the paddock, so I concluded the boys must be doing their job – and they had paid for themselves in the first year – not many investments will do that! Last year we had all the ewes home – still in drought conditions and feeding stock and with the boys having just cut their 3 year old teeth we managed 87% + 7% hand reared lambs = 94%. The ewes often form a nursery group around where the Alpacas are camped under a tree during the middle of the day so the boys get to play babysitter while the ewes go off to graze. The Alpacas won’t leave an area until all the lambs are with their mothers. The boys patrol the paddock during the day and will check out any new additions as they arrive, they also tend to hang around the vicinity of lambing ewes. I am still able to take my little sheepdog bitch into the paddock with me but I have to show the boys that she is with me so they don’t chase her but they still watch her every move. I have seen the Alpacas on several occasions gently pushing a lamb up to its Mum as she is walking

away from the feeders where the lamb has been asleep and not realised that Mum has finished and is heading off. This year when checking the lambing ewes in the twin/multiples paddock I found a lamb that belonged to a set of triplets. After finding the lamb which had become separated from its siblings and Mum, I realised I was being monitored by Juan and Pepe, who were on lambing duty in this paddock. They watched me as I put the lamb down, then they pushed it up to the ewe who acknowledged it and let it suck. The two Alpacas then nudged the three lambs up after the ewe – poor ewe won’t get any time out with these two paddock nannies on duty. My husband is a bigger advocate for the alpacas as fox guards than I am now, and we have just bought our first three girls (yes those big brown eyes and their gentle intelligent nature have got us hooked) so we will be breeding our own fox guards and girls for a while to come. We still bait for foxes but we are only using between $30 and $40 of baits during the lambing season, a far cry from the $1000 of bait and no real results. Alpacas have proven to be a far more sustainable and ongoing solution to our fox problem. A neighbour down the road came and asked me about them the other day and he has just invested in some wethers for his breeding ewe flock. So the word is spreading. Maybe one day soon, alpacas running with sheep will be the norm, and all the foxes in the Central West will be forced to relocate… maybe. … And they all lived happily ever after!

collaboration

be patrolled we sourced two more wethers to top up coverage of the paddock – just on 400 acres.

Have your say… New Rural Industries Australia participates regularly in AgChatOz – a forum on Twitter, held between 8pm and 10pm every Tuesday night. AgChatOz was founded a year ago. It is a simple idea to engage the wider agribusiness community and to raise the profile of agriculture in Australia. There are over 1200 primary producers, supply chain, industry representatives, government and media that are part of the weekly conversation each Tuesday night, and this number continues to grow. Each week there is a theme, and a series of questions on that topic – from finance, to retail monopolies; from mental health to technology; from equipment to obtaining skilled workers from overseas. For more information, email agchatoz@gmail.com. To participate, just search for # AgChatOz on Twitter, and take part in the conversation.

Step into the world of social media and have your say. Continued from page 23

Find the right people and let them get on with their jobs reason to come back to work, tomorrow, next week and next year. As the business owner, it is your job to welcome new staff as much as it’s your job to meet with potential clients. It’s important to take a few moments with them early on and communicate the company’s goals and values, and also offer them a chance to come back to you with ideas as to how they might will shop around fit into that vision. It’s also your job until they get the best offer… Staff members will stay with you if they see a future for themselves within your company. It’s worthwhile conducting annual reviews, not only to see how staff are developing, but also to ask specifically what they are hoping to achieve and look at ways to get them there. Good staff members will forgo all kinds of perks and payments just to work in a company where they feel they have a future, and the businesses that win the recruitment game are mostly those that take the time to communicate that future to potential recruits.

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Getting the process of recruitment right is a fundamental precursor to growth, and poor recruitment will often undermine growth. If you are planning to grow rapidly, you need staff members who feel confident and empowered to make decisions based on their own skills and training. Hire smart people and give them a chance to do their job and they will stay with you and grow as you do—taking the company beyond the small, into the midsize and ultimately into the realms of the very large. Finding good staff and keeping them is the only way to create a large company —and regularly losing staff is a great way to ensure that your business will stay small long into the future. The choice is yours. Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

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Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

Finding the right oil

hen we talk about essential oils we are really talking about a multitude of different products, in different forms, that are used in a host of different industries. The word essential oil strictly means a volatile oil that is steam distilled from the flowers, leaves, buds, fruits, branches, bark, wood, or roots of a plant or tree. However in a generic sense the term also refers to products called concretes and absolutes, extracted by solvents, and aromatic extractions like pomades collected through compressing flowers in lard, to oleoresins from tree saps, and expressed oils from citrus fruits. The markets for essential oils are just as wide and varied. Traditionally essential oils have been used in the preparation of flavours, fragrances and cosmetics. Essential oils are also utilised for various industrial applications, pharmaceuticals, aromatherapy, general cleaning products, and two rapidly growing new areas; agricultural chemicals and natural perfumery. The current essential oil industry in Australia produces approximately $35-40 million farm-gate across all the states and includes eucalyptus, tea tree, peppermint, lavender, lemon tree, lemon myrtle, citrus oils, sandalwood oils, and a host of other minor oils including spearmint, fennel, parsley, dill, lavandin, and blackcurrant and boronia absolutes. Some indigenous species like Tasmanian lanceolata and blue cypress oils have also been successfully developed for the local and international markets.

Starting an essential oil venture requires many years of passionate patience and determination to succeed. Most farmers around the world I know produce essential oils because they love being involved in the production and marketing of the oil. It’s a passion enterprise. But essential oils are a very diverse range of crops with complex and fragmented markets which makes the selection of ‘what to grow?’ and ‘ for who to grow?’ very important questions. One must select the crop best suited to your farm size and location, the market you prefer, and suits your capabilities, resources, networks, and experience. The selection of what

Murray Hunter

essential oil you want to develop and what market you want to serve is really a question about what business model suits you best. The main types of business models a farm could adopt to produce essential oils depends upon the type of oil, scale, location, crop timeframe, networks available to you, and market. Below is a brief summary of most of them. As a supplementary crop to an existing farm. This is a great option if you have extra land, capital, and time. One can experiment and develop an essential oil as a supplementary activity and this is how the peppermint industry started in the Ovens Valley and Corryong areas in Victoria. This is a good way to gain experience and expertise without too much pressure. As an extensive plantation system. This is a good option if the oil you want to produce is a high volume industry oil and there are economies of scale to be gained. This is how the tea tree industry developed in the 1980s. Eucalyptus around West Wyalong is also cultivated this way, as well as the sandalwood plantations in Western Australia. The drawback with crops that are suited to extensive production is that the key is economies of scale and therefore cost, where Australia tends to struggle against producers from China and other low cost producing countries. However native crops like lemon myrtle have great potential as an extensive crop in the future. As a specialist producer. Being a specialist producer enables a farm to concentrate on producing niche products that call for premium prices in the market, so a better than average return can be achieved for a number of years.

30 Oil collection bins at the old Maincamp Tea Tree Plantation

These would include essential oils that can still be wild collected like some species of Melaleuca oils which attract premium prices, the organic production of essential oils which attracts on average three times the price of conventionally produced oils, or essential oils for very specific applications like kesum oil (Persicaria odoratus or Vietnamese mint) for the natural flavour and perfumery industries. As aromatherapy oils. One specialist market is the aromatherapy market where buyers are very particular what they purchase and use. Although it appears a large industry, lots of experience is required in producing to buyers specifications and development in this area should be in collaboration with a major customer. As an integrated enterprise: Given the right location, right lot of land in the right locations, an integrated agro-tourism farm producing essential oils is popular. In fact most essential oil plantations cannot survive without supplementary activities and agro-tourism provides up to 70% revenue in some cases. This could be an enterprise that provides a restaurant and aromatherapy treatments with plant tours and demonstrations, or producing and branding a range of personal care products like Thursday Plantation at Bungawalbyn, Northern New South Wales. Opportunities exist to produce natural organically certified agricultural chemicals like fungicides, pesticides, herbicides, and plant anti-stress supplements as this market is growing exponentially today. As an intermediate chemical producer. Some essential oils are valuable to industry for their chemical constituents.

Many species of eucalyptus contain very high percentages of chemicals that can be used for further industrial synthesis. Some chemicals isolated from herbal oils are worth many thousands of dollars. For example the natural aliphatic aldehydes in kesom oil are worth several thousand dollars per kilogram. New essential oils. Developing new essential oils is another option that requires patience. In most cases it’s a matter of domesticating a wild plant species and learning how to cultivate it as a crop. This option is best undertaken with a major industry collaborator and university. Both University of Tasmania’s TIAR and Southern Cross University have experience in developing new essential oils. These ways into the industry may overlap but hopefully provide some guide about how to consider going into essential oil production. Producing essential oils might be best undertaken as a group activity, so a community of growers can swap notes and even market together. There are a few groups like this in Australia. Like most agro-business essential oil production is a labour of love. However one must be aware that if the right approach is not taken, there is little chance of success. Essential oils are a ‘poor man’s’ industry unless you can add value to the product. Once again, an industry collaborator is paramount if you are serious. Getting into the right crop will be very lucrative, but picking the wrong one will be a disaster. Like all things experiment first, put up a trial crop, distill your oil on a small scale and get opinions before making any big commitments. Murray Hunter has been involved in the essential oil industry as a farmer, producer of

Passion to Profit – the magazine of New Rural Industries Australia Issue 5 – 2011

flavours and fragrances, producer of personal care products, natural therapy practitioner, consultant, researcher, and academic for more than 30 years. He is currently living in Malaysia attached to University Malaysia Perlis and is the author of Essential Oils: Art, Agriculture, Science, Industry and Entrepreneurship: A focus on the Asia-Pacific Region published by Nova New York.

The distillary at the Ovens Research Station Vic

Murray Hunter and friend at a tea tree plantation in Sabah

Harvesting peppermint at Myrtleford Victoria

Harvesting kesom (Vietnamese mint) in the Ovens Valley

“The whole is greater than the sum of its parts”

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Opportunity now exists for companies and organisations to be corporate members of New Rural Industries Australia. Be part of the big picture. Build alliances and grow your business.

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