Diversification of income streams

FarmBis
Costs and Benefits of Diversification

Relying on a single source of income leaves you open to financial problems if that source, for some reason, fails to deliver. Diversification of income streams is one way of insuring yourself against this happening. This can mean diversifying to another source of income on your own farm or even to a source of off-farm income. If you diversify to another source on your own farm, make sure that it won’t be disrupted (or at least as badly affected) by the same weather conditions as your existing source of income. Diversification will also make your income more resistant to other factors such as changes in commodity prices. For a real life case study of diversification strategies in action, see the "From Unviable to Enviable" and "Forest of Great Potential" articles in the Good Times Hard Times magazine.

Governments offer a variety of programs to help you diversify your income. These usually involve some form of training and may even provide financial assistance. The main Federal program is FarmBis – this is outlined below. Your Agricultural Department or equivalent will have information on any additional State or Territory programs.

FarmBis

FarmBis is part of the Agriculture, Advancing Australia (AAA) initiative, and has two components.

The National Component (FarmBis Australia) focuses on the needs of industries rather than individual business requirements and so will not be covered in any detail here. It provides assistance to enhance the business management skills of Australia’s primary industry sector through education and training projects.

The FarmBis Commonwealth/State Component helps primary producers participate in business and natural resource management training to improve their business. It is administered by each State and jointly funded by Commonwealth and State Governments. The level and type of support may differ between States/Territories. For example, in South Australia an additional $1,000,000 support has been provided for training activities that focus on long term strategic planning, risk management, and human resources management. This increases the subsidy to 75%: up from the 50% for other activities.

FarmBis aims to help a farm management team (principal operator, spouse, family members, partners and staff) meet identified training needs and provides funding for a wide variety of training activities including:

farm business and financial management
farm performance benchmarking
marketing
quality assurance control
skills audit
leadership development
human resource management
natural resource management
risk management

Assistance is provided through direct financial contributions towards the cost of training activities. To see what FarmBis offers in your state, see the contacts below.

New South Wales
NSW Rural Assistance Authority
Locked Bag 23
ORANGE NSW 2800
Free call: 1800 678 593
http://www.raa.nsw.gov.au/reader/8692

Northern Territory
Business Services Branch
Department of Primary Industry & Fisheries
GPO Box 990
DARWIN NT 0801
Tel: 08 8999 2317

Queensland
FarmBis Program’s Strategic Direction
State Coordinator, FarmBis
GPO Box 46
BRISBANE QLD 4001
Tel: 07 3239 3235
Email: hardym@dpi.qld.gov.au

FarmBis Training Grants Information
Queensland Rural Adjustment Authority
GPO Box 211
BRISBANE QLD 4001
Free call: 1800 623 946

South Australia
Rural Communities and Education
Primary Industries and Resources SA
GPO Box 1671
ADELAIDE SA 5001
Free call: 1800 182 235
http://www.pir.sa.gov.au/farmbis

Tasmania
Department of Primary Industries, Water and Environment
GPO Box 44A
HOBART TAS 7001
Local: 1300 368 550
Tel: 03 6233 2817
http://www.dpiwe.tas.gov.au/inter.nsf/ThemeNodes/RPIO-5292P2?open

Victoria
Rural Finance Corporation
GPO Box 1334L
MELBOURNE VIC 3001
Tel: 03 9243 2600
Email: farmbis@ruralfinance.com.au
http://www.farmbis.ruralfinance.com.au/

Western Australia
Agwest Farm Business Development
PO Box Y3455
East St Georges Terrace
PERTH WA 6832
Free call: 1800 198 231
Email: agwestfbd@agric.wa.gov.au

Costs and Benefits of Diversification

The Rural Industries Research and Development Corporation (RIRDC) has produced a book showing how 10 farmers have looked at a wide range of activities to diversify their income streams. The book, Costs and Benefits of Diversification: Whole Farm Case Studies, is part of the RIRDC’s Options series which aims to provide landholders with a wide range of advice to better equip them while making management decisions.

Diversification is often promoted as a way of protecting against economic downturns and low commodity prices, which are rarely low across all sectors at the same time. The Costs and Benefits book discusses the costs and benefits of diversification strategies in an Australian context, and includes 10 detailed case studies that show clearly the pluses and minuses of pursuing diversification options, based on candid personal experiences.

The book can be obtained through the RIRDC or call 02 6272 4819

For an inspiring story of how research and development can work for your farm, see the "Controlling your own Destiny" article in the Good Times Hard Times magazine.