Australian Agribusiness Research Articles

Base of the chain (BoC) sourcing challenges: The role of institutional voids and social agency problems

Due to various factors, including the institutional context of suppliers, the successful implementation of sustainability initiatives remains a persistent challenge for purchasing and supply management (PSM) professionals. Sourcing from the Base of the Chain (BoC) requires buyers to be cognizant of and assess challenges inherent in engaging with the Bottom of the Pyramid (BoP) institutional context. Designing governance structures that facilitate the simultaneous pursuit of economic and social goals demands a thorough understanding of these challenges and their contextual antecedents. The literature has addressed institutional voids and incompatibilities between buyer-BoC supplier institutional contexts as critical factors informing interventions aimed at overcoming sourcing challenges. Drawing upon social agency theory, our study advances these debates. We argue that the broader institutional and social context serves as the contextual antecedents to principal-agent (P-A) relationships established between buyers and their BoC suppliers. This perspective provides a more enriched explanation for the antecedents of BoC sourcing challenges. We draw on a multiple case study incorporating 31 interviews and archival data of five BoC sourcing programs within the Australian agribusiness sector. Our findings shed light on how BoC institutional voids cause BoC sourcing challenges across supplier and product domains by inducing hidden information, hidden action, and hidden logic as social agency problems. Hidden logic, a new type of social agency problem identified in our study, refers to the agents' socially constructed sets of assumptions, values, beliefs, and traditions that are invisible to the principals. Consequently, we present insights into why governance structures addressing BoC sourcing challenges may vary across institutional contexts, providing practical guidance for buyers in developed economies concerning the subsequent design and execution of effective BoC sourcing strategies.

States of Australia’s agri-environment: visual extractions from degraded landscapes

Under perpetual growth-geared economic, governance and sociocultural systems, continued increases in agricultural output are necessary to feed an ever-expanding human population, as well as neoliberal appetites for financial profitability. These translate to intensifying and expanding agri landscapes. Yet agribusiness industries routinely seek to obfuscate visual tangibility of their production practices and impacts from public view. A gap exists in public availability of high-resolution imagery depicting Australian agriculture’s industrial scales, degraded lands and landscape impacts. This visualisation endeavour is situated between the blurry and pixelated resolution of freely available agricultural satellite imagery, and agri- marketings’ frequently glossy, colour-saturated and romanticised depictions from on-ground photography and video. Positioned between these two purviews, the drone-eye-view provides sharp and incisive imagery contributing new insights into agri- landscapes and practices. This visual essay draws from drone imagery captured during continental-scale field research spanning all Australian states and territories, all commodities and major industries, and all scales of commercial farming. As Australian agribusiness is landscape and resource extractive in its geometric pattern arrays, transmuted images are extricated from aerial stills and videos into compositional strips. Together with the poetic and interpretative text, the work reveals industrial and degraded landscapes at nested scales, links foods with their production contexts, and is suggestive of the state of Australia’s agricultural environment.

Sustainability motivations and challenges in the Australian agribusiness

The research aimed to explore the sustainability actions in the Australian horticulture and dairy industries and the influences on firms adopting sustainability. The research adopted a neo-institutional lens and examined the environmental, social, and economic issues faced by these two industries in their operations and their supply chains. The research adopted a qualitative approach with four case studies. Interviews were conducted with decision-makers in the focal firms as well as those in key supply chain partners. One key finding was that motivations differed in the take up of environmental and social sustainability actions, with business imperatives and mimetic influences found in the former, whilst reputation and normative influences were evident in the latter. Environmental actions focused on actions to reduce their carbon footprints such as environmentally friendly packaging, water efficiency, managing waste, and monitoring spray programs. In the dairy industry environmental actions are also related to animal welfare. Social actions predominantly focused on “giving back to the community”. And the adoption of automation was the main economic action. The horticulture sector demonstrated more concern about sustainability in its supply chain, especially in regard to environmental considerations due to economic interdependencies and industry and competitive pressures. Another key finding was regarding sustainability challenges. A key social sustainability challenge was found to be the treatment of temporary backpacker labour which has the potential to seriously damage Australia's clean and green image. In terms of environmental sustainability, severe water shortage and the associated costs were found to be the most challenging. International competitive pressures were highlighted as a key challenge and the need to be sustainable economically was at the forefront of many concerns. In terms of the supply chain, processing firms (upstream) were found to exert a positive and substantial pressure in terms of sustainability practices of their supply chain, whereas, in the dairy sector, the duopoly of retail giants had a significant albeit negative influence on the supply chain's uptake of sustainability practices. Managers' values and links to the local and regional communities played an important part in the adoption of sustainability initiatives and their influence on the supply chain. • Supply chain sustainability actions were predominantly environmental. Environmental actions related to carbon footprint, use of environmentally friendly packaging, water efficiency, managing waste, and monitoring spray programs and animal welfare. • Social actions predominantly focused on “giving back to the community”. The adoption of automation was the main action adopted to bring about economic sustainability. • The horticulture sector demonstrated more concern about sustainability in its supply chain. • The uptake of sustainability practices was influenced by supply chain partners. In horticulture, this influence was positive and coming from upstream, whereas, in dairy, the influence was negative and coming from downstream. • Managers' values and links to the local and regional communities played an important part in the adoption of sustainability initiatives and their influence on the supply chain.

An Empirical Study on the Success Factors of Supplier-Distributor Relationships

This study investigates the factors that affect the success of supplier-distributor relationships in the Australian agribusiness industry. While B2B relationships have been researched extensively and across a range of industries, there is little evidence of its application to the agribusiness sector. A preliminary framework of success factors was developed from the extant literature, and investigated through 20 in-depth interviews conducted with 10 agribusinesses from a dyadic perspective. The findings of this research confirmed the initial 11 factors presented in the preliminary framework as being important to the success of supplier-distributor relationships. The research findings also revealed insights into six new factors that were considered to be crucial to the relationship success, which were included in the revised framework for future investigation.

Cross‐case analysis of producer‐driven marketing channels in Australia

PurposeThe purpose of the study was to investigate the feasibility of producer‐driven marketing of differentiated meat, in the context of Australian family farms. Producer‐driven marketing (PDM) is defined as marketing by farm families of their own produce by developing and managing their own supply chains beyond the farm‐gate. Family farms are defined as family operated farms. The framework used compared revenue, costs and uncertainty in various distribution channels.Design/methodology/approachSix individual case studies were conducted using semi‐structured interviews. The interview protocol included enterprise characteristics that contribute to the ongoing viability of the businesses.FindingsPDM was a feasible entry point for new brands and a profitable alternative to supplying generic product to the mainstream when costs were controlled. It is proposed that PDM was feasible in the context of Australian family farms where the distribution channel chosen reduces variability in the farm‐gate price, captures the marketing margin and minimises negotiation costs, particularly the labour costs to find a buyer.Research limitations/implicationsThe feasibility assessment excluded the cost of acquiring new skills which may be significant. The entrepreneurs interviewed already possessed significant marketing and business skills and experience to produce and market a brand through alternative distribution channels.Practical ImplicationsProducers can potentially increase farm profitability where household labour and skills are available to market produce beyond the farm‐gate. These implications are likely to be relevant in most developed countries, not just Australia.Originality/valueThe phenomenon of producer‐driven marketing is relatively novel in Australian agribusiness with no previous analysis of the profitability and long‐term viability of such an approach in the Australian context.

AN APPROACH TO IDENTIFYING POTENTIAL POST-FTA OPPORTUNITIES FOR AGRIBUSINESSES TO ACCESS THE CHINESE MARKET: AN AUSTRALIAN CASE STUDY

With a population of approximately 1.3 billion people, China is currently Asia’s second largest food and beverage market by value behind Japan. Post-WTO, the opening of Chinese markets represents a significant opportunity to countries exporting or wishing to export food to China. This is particularly true of Australian agribusiness as a Free Trade Agreement (FTA) is being negotiated between the two countries. At the same time, China is experiencing great difficulty in establishing and enforcing a code of practice for food quality, safety and traceability, especially for domestically produced food products, notable among them being fresh horticultural products. This study proposes an approach to evaluate the potential of Australian fruit and vegetable exports to China in a free trade environment. The approach is based on scaled evaluation criteria that encompass the major factors constraining food exports from Australia to China. They include tariffs and tariff barriers, evidence of recent export activity, price sensitivity, potential future demand, demand stability, opportunities for chain improvement and overall competitiveness. A study of 12 Australian food categories revealed six with the highest potential, including fruit. The outlook for vegetables was less optimistic. The evaluation approach used could be applied to any country wishing to evaluate potential opportunities to export horticultural produce to China, or to a more detailed study of horticultural export opportunities alone.

An empirical framework developed for selecting B2B e‐business models: the case of Australian agribusiness firms

PurposeTo develop a preliminary framework for Australian agribusiness organisations seeking to select business‐to‐business (B2B) e‐business models.Design/methodology/approachA literature review was conducted on topics related to strategic decision making and B2B e‐business models. Particularly, factors influencing the strategic decision on the choice of e‐business models to be selected were examined. The review aims to provide an initial framework for the research study to be conducted. The research was conducted in two stages: depth interviews (stage one) and case studies (stage two).FindingsProvides information on factors (both internal and external) influencing the choice of e‐business models and also insight into the current practices of Australian agribusiness in relation to the selection process of B2B e‐business models. A framework was developed to assist agribusiness organisations to make decisions on the selection of the most appropriate e‐business models.Research limitations/implicationsThis study is exploratory in nature and thus the findings cannot be generalised to the population at large. Further conclusive explanatory research is required for generalisation and the guidelines developed in this study could be replicated and tested in other agribusiness sectors or in other industries.Practical implicationsManagers are able to consider and examine the relevance of the guidelines and criteria developed, and determine the essential factors that require consideration during their selection process. The guidelines can also assist managers to determine the level of resources, technological infrastructure and knowledge and understanding of e‐business models required.Originality/valueThis paper brings together two disciplines – strategic decision making and development of e‐business models – that have not been combined prior to this study. The research findings have contributed to the development of existing theory in these two areas. The research also offers insights into the selection of e‐business models within the agribusiness industry that traditionally lagged behind in e‐business. The development of the framework and guidelines has assisted managers in their selection of e‐business models and given them an appreciation of what others in the industry are doing.

The Demand for Beef in Indonesia: Implications for Australian Agribusiness

Meat consumption, expenditure and socio-demographic data from the 1990, 1993 and 1996 SUSENAS Household Food Expenditure and Consumption Surveys were employed to estimate the demand for meats in Indonesia. The focus was on the Provinces of DKI Jakarta and West Java where about one-fourth of the Indonesian population reside. Statistical and econometric procedures were used to aggregate the 16 meat types recorded in the SUSENAS into four meat groups. They were then used to estimate the Linear Approximation of the Almost Ideal Demand System (LA/AIDS) model, taking into account zero observations and the restriction that budget shares must lie between zero and unity. The demand for Meat Group 1 (dominated by beef) is income-inelastic, whereas that for Meat Group 2 (dominated by commercial and native chicken) is income-elastic. These two groups comprise nearly 95 per cent of all meat purchases. The estimated own-price elasticity of the beef group is -0.92, while that for the chicken group is -1.09. The cross-price elasticities indicate that all the meat groups are substitute goods, as expected. The results suggest that the current focus of the Indonesian government on strengthening the domestic poultry industry is well placed, as the demand for chicken is likely to respond more quickly to income growth than the demand for beef. Further, consumers seem more likely to adapt their consumption patterns to chicken price changes than they will for beef price changes. However, these differences are relatively minor and there is still a major opportunity for Australian agribusiness firms in the cattle and beef sectors to take advantage of the projected rapid growth in Indonesian beef demand

Export finance skills for the U.S. and Japanese markets: An Australian agribusiness perspective

It is widely accepted that practical export finance skills are necessary to successful exporting. Nevertheless, there has been little research into the specialized financial aspects of exporting. This research presents the first evidence of the relative importance of practical export finance skills to Australian agribusiness exporters when they export to the U.S. and Japan. We also report on their relative proficiency when exporting to these markets. Data for the study was collected by a mail survey of Australian agribusiness exporters selected from Austrade's Australian Exporter Database. The study found a significant difference in relative skills importance and proficiency between the two markets, with some interfirm variances due to firm size and exporting experience. These findings are of great practical importance in the design of market-specific export finance skills training programs for firms of differing size and exporting experience.

Do services exporters build relationships? Some qualitative perspectives

Investigates whether success factors for Australian services firms that export to Asia are consistent with the theory of relationship marketing, and demonstrates the power of the in‐depth interview methodology for exploring marketing theory. Relationship marketing theory suggests that services firms should adopt a relationship marketing approach while goods firms might use a transactional approach. To investigate this theory, a series of in‐depth interviews were conducted in firms marketing agribusiness products to Asia. We found that growth in the agribusiness services sector could be attributed to their strategy of “pairing” with Australian commodity exporters rather than to entering the market directly. Contrary to expectations, we found that Australian goods firms consider building relationships with Asian distributors and customers crucial to initiating and maintaining an export strategy. Furthermore, Australian agribusiness services firms do not seek to enter the market on their own but build relationships with Australian firms as a means of accessing the Asian market. The results demonstrate the power of qualitative methods for uncovering results that confirm or disconfirm existing theory.

Establishing supply chain partnerships: lessons from Australian agribusiness

Many agribusiness firms in Australia are buying into the concept of SCM but are not sure how to apply it. Provides some guidance for firms who are considering following the SCM track. Presents a checklist for auditing potential supply chain partners which has proved useful in focusing the minds of potential partners on the key issues of trust and relationship management.

The globalization of Australian agribusiness

For a major agricultural country, Australia has had a mediocre performance in adding value to their agriculture production base. Major changes are making it more probable that Australia will more effectively compete. Key changes in the globalization of business are in communication, transportation, world money markets, labor skills, labor relocation, and accelerating technology. Globalization of agribusiness is “leveling the agricultural playing field”. Global demand shifts favor Australian agribusiness. Current improvement in Australia's position comes from urbanization of Asia and the restructuring of the Soviet food system. The challenges for Australia's agribusiness are great, but most can be converted into opportunities.

A Profile of tomorrow's agribusiness leaders: The Australian perspective

This article presents the results of the Agribusiness Management Aptitude and Skill Survey (AGRI-MASS) in Australia. The national survey of 345 Australian agribusiness managers, was conducted to complement a similar study conducted in the USA by Litzenberg and Schneider (1988). As with the US study, respondents to the survey were asked to score 74 personal and professional attributes in six major categories, required for successful careers in agribusiness. The survey data enabled the authors to rank order the attributes and draw conclusions about the importance of categories of attributes as perceived by different sectors of agribusiness in Australia. The rank order was very similar to that found in the US study. Interpersonal and communication skills were rated very highly by future employers.

An overview of agribusiness education in Australia: Developing tomorrow's agribusiness leaders

This article serves as an introduction to the status of agribusiness education in Australia and as an overview of the first national Australian Agribusiness Education Conference, “Developing Tomorrow's Agribusiness Leaders”. The article identifies the major issues important to agribusiness education in Australasia. It will be a guide for people worldwide who are grappling with improved agribusiness education. The major points discussed by the eleven presenters at the conference are also presented in this overview article. The presenters at the conference were leaders in government, academic, and agribusiness industry from Australia, New Zealand, and the United States.