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Advice on Publications Available.Tom Ranken
Egaline Nursery Pty Ltd
Tumbarumba, NSW 2653 Australia
Telephone: 02 6948 5271
Facsimile: 02 6948 5250
International fax: 61 2 6948 5250
[These remarks were made by Tom Ranken, of Egaline Nursery, Tumbarumba, in his keynote address to the Plenary Session at the Emerging Opportunities in Agriculture Conference held at Harden in October, 1997.
This highly successful meeting was organised by members of the Australian Institute of Agricultural Science and a group of local farmers, who were mostly from the Harden-Murrumburrah Landcare Group. The primary producers organising the meeting identified forty new crop and animal industries they wished to learn about.
The "sideshow alley" model, developed for the New Crop Options Day at Pittsworth in July 1996, and described in Australian New Crops Newsletter #7:15 was used for the organisation of the day; Dr Mike Bourke, from the Australian National University was a speaker at Pittsworth and was the original instigator of this second meeting.
After the Plenary Session, the forty specialist speakers were organised into ten modules, running concurrently. Each speaker addressed the audience in his/her module for fifteen minutes, every hour for five hours. After each presentation, the speakers retired to their static displays and farmers were able to consult individually with them, for forty-five minutes, until their next presentation.]
"Man cannot discover new oceans until he loses sight of the shore." (Anon)
Diversification is about recognising opportunities and investigating them, but not wasting them. I will describe the sequence of events that has led us to the dozen or so enterprises we are currently pursuing.
When Vanessa and I left agricultural college, we started farming merino wethers and polled Hereford cattle in Victoria. The opportunity arose to move to Tumbarumba in New South Wales - for every acre we sold in Victoria, we were able to buy five in New South Wales. Our property "Egaline" comprises 640 hectares, 530 metres above sea level with 950 mm average rainfall usually.
The predominant enterprise in the district was fat lamb raising so we joined the club. We were looking for ways to better utilize profits from our pasture, so we decided to venture into the clover seed industry. We harvested clover seed from our land and contract harvested other farmers' crops to better utilize the harvesting machinery. This business was very successful for several years until the price of clover seed halved, forcing us to rethink our direction.
We then developed a few paddocks for Phalaris seed production with new varieties with moderate success. All these enterprises had the same basic flaw though; there was no assurance of a market and there were always huge price fluctuations.
We were tired of doing huge amounts of work and risking lots of money only to find that when we took our product to the market place we were vulnerable to the price of the day.
It was then we started to change the direction of our thinking.
In 1983, we were approached by Australian Newsprint Mills with the view of establishing a joint venture Forestry plantation. This was attractive because we had some otherwise unproductive land that we could better utilize. It gave us market security and the sharing of expertise was a big advantage.
So two years later our first joint venture pine plantation was planted with the security of a thirty year contract. This has worked extremely well so far.
This may sound like a long time but now at twelve years of age, the plantings are approaching a first thinning for which we have a market.
In the current market, it would be very difficult to sell these thinnings on the open market. In 1992 we entered a second joint venture plantation with ANM on the same basis, totaling 89 hectares.
Meanwhile, our grazing enterprise had moved from fat lambs to merino wethers only. After investigating the gross margins, we could see that this was the more profitable enterprise and still believe this to be the case. Running the merino enterprise was also less labour intensive, and our labour was diverted to the nursery which was then being established.
In 1986 we established a pine nursery, after recognising that there was a very strong local market and we could organise contracts to supply this market.
Some of our clients offered contracts up to eight years, which enabled us to implement the necessary infrastructure for a large scale operation and have some market assurance. We are forward selling 90% of the crop each year and are currently producing around two million seedlings each year, employing fifteen people on a casual basis.
Other doors have opened to further diversity in the nursery. With the development of the Tumbarumba district as a premium wine growing region, we saw another opportunity to supply the industry with grape rootlings which the infrastructure of the nursery enables us to do. Again, all of these rootlings are grown on committed orders.
In 1989, we established four hectares of wine grapes. These are all forward sold on contract to SouthCorp Wines for ten years. They are Pinot Noir and Chardonnay for production of sparkling and table wines. This has been a very successful diversification.
Vanessa thought the vines were a great idea as a few years back we were forced to shoot our sheep due to a slump in the industry and we figured that if there was a crisis in the wine industry, at least we could drink our way out of it.
Everywhere we looked, diversity and opportunities were knocking on our door.
At this stage, an opportunity to grow gum foliage appeared. In 1991, we planted twenty hectares of gum trees for foliage production after organising an agreement with a processor. We share farm a further twenty five hectares with a neighbour to supply the fresh flower market in Sydney and Melbourne.
We have a number of yearly supply agreements in place with florists as well. This has grown and now employs eight people nearly all year round.
Meanwhile the sheep enterprise was being wound down because of the time being allocated to more profitable enterprises on the farm. We now lease our grazing land to neighbouring farmers on two to three yearly agreements.
As you are probably now aware we are starting to spread our income risk over several enterprises and in so doing, they have gone from having unstable markets to having more stable ones. We can now budget with some assurance.
All we have to do is grow the stuff. No matter what it is you grow, there are problems. However, we are addressing risk management.
A trip to New Zealand helped us reinforce our direction with farm forestry as well as giving us a few new ideas. We have planted a further forty hectares to different regimes of farm forestry, such as wide-spaced, multi-rows and block plantings. These are all aimed at clearwood production.
With farm forestry practices, a lot of what we had set out to achieve was relatively new and there was very little information to draw on at the time.
It was pioneering work and at times there was a steep learning curve. But you have to learn from your experiences.
Samuel Smiles said:
"We learn wisdom from failure much more than from success and probably he who never made a mistake never made a discovery."
To help us understand forestry techniques better, we have established many species, stocking rate, herbicide and fertilizer trials. We host groups of foresters, Landcare bodies, government officials and university staff and others.
We openly share our knowledge. However, we always make a point of learning from these visitors as well.
The main thrust of our business is commercial. For example, our farm forestry programmes are designed to firstly make money. Secondly we recognise all the other benefits of putting trees on our farm; such as for erosion control, the prevention of salinity and as wildlife corridors and habitats.
We accomplish most of the research needed to instigate these programmes ourselves. We adopt a programme of continual learning, experimentation and adaptation to improve our efficiency.
We have to continually monitor the performance one enterprise against another and be prepared to take a hard line of action if one of them doesn't come up to scratch.
Years ago we developed a whole farm plan. It has been a very good reference for the future and helps us make decisions and we allocate our enterprises accordingly. We have firm visions and we set goals. We have a business plan that we regularly update.
Other minor enterprises that we have a bit of fun with are playing in a rock and roll band, which was a very important part of our cash flow many years ago, hosting and coordinating overseas farm tourism, running a landscape and design consultancy and opening our garden to the public.
When we investigate a new enterprise, we follow the following formula:
If all looks good, and it is somewhere within the bounds of our expertise or capabilities, then all we have to do is produce quality, quality and quality. Then we ask ourselves whether this is really what we want to do.
Flexibility is important as you have to recognise changing technology and react to it if you want to keep your place in the market.
Diversity is a challenge. It gives you the opportunity to do something you like doing and therefore you will probably do it very well. Some people walk in the rain, whereas others only get wet.
I believe in having a mix of enterprises, both long- and short-term, running concurrently and therefore spreading risk. This approach makes better use of capital and machinery and has so far enabled us to succeed and remain on the land.
Our Farm is a prime example of a new approach to land management that is gradually finding ground in Australia.
Had it not been for our approach to diversification of our farm operations, we would still be dependent on an ever dwindling wool cheque for our income.
Why not go out on a limb?
That's where the fruit is.
Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter
Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:
r.fletcher@mailbox.uq.edu.au[
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