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This report presents preliminary results from a farm innovation survey conducted by ABARE in 2008 as part of the 2007-08 Australian Agricultural and Grazing Industry Survey (AAGIS) and Australian Dairy Industry Survey (ADIS).
The farm innovation survey obtained information from broadacre and dairy farmers on the extent of innovation adoption during 2006-07 and 2007-08 across a broad list of innovative activities including: product changes, new management practices, natural resource management initiatives, the introduction of new cropping equipment and machinery, and marketing of farm products.
Most broadacre and dairy farms made at least one innovative change over the two years ending 2007-08. However, there were marked differences between broadacre and dairy farms in their choices of innovative changes. The most commonly adopted activities by broadacre farmers were introducing new cropping equipment, new fertiliser practices and new soil management practices. Dairy farmers mainly introduced new irrigation and water management practices, new pasture types, and new fodder conservation and use practices in 2006-07 and 2007-08.
Within broadacre agriculture, adoption of innovative changes to farm management practices and technologies was higher among cropping farms than livestock farms. This result is consistent with cropping farms generally achieving higher productivity growth than livestock farms over time (Nossal et al. 2009).
A range of factors, including farm business size and farmer education, are significant in directly or indirectly affecting the adoption of innovation by farmers. On average, higher levels of financial performance appear to have influenced farmers’ decisions to adopt new innovations, in particular capital-intensive innovations such as new cropping equipment and machinery. Adoption of many innovations, particularly those being management-intensive, is likely to be driven by a wide range of factors including behavioural factors that were not investigated in this analysis.
Innovative changes made by broadacre and dairy farms over the two years ending 2007-08 appear to have been motivated by either an improved capability to implement changes because of increased income or reduced costs of implementation, or an imperative to act because of circumstances imposed by factors including seasonal conditions and high farm input prices.
To facilitate the best longer term outcomes for farm profitability and productivity, farmers require well formed business and investment plans to ensure they make appropriate decisions in times of opportunity and are well informed on management and technology options in times of challenge.
Further economic analysis of the 2007-08 farm innovation data will be undertaken to identify key determinants of farm innovative behaviour and the relationship between innovation adoption and productivity growth among broadacre and dairy farms. In addition, ABARE intends to continue collecting similar data to monitor the effect of farmers’ adoption of innovation on longer term farm productivity and farm performance.