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Bankers and grazing

From Savanna Links, Issue 31, January – June, 2005. Savanna Links is written and produced by the Tropical Savannas CRC.

Fresh perspective on grazing properties

John Bourke

John Bourke senior agribusiness manager: Banking and financial institutions have become more aware of the problems that the grazing industry faces.
Photo: Kate O'Donnell

Sustainable management for graziers depends on healthy finances as much as anything else. Earlier this year the North Queensland Beef Research Council organised a forum for graziers, researchers and agribusiness managers. Savanna Links talks to John Bourke, Senior Agribusiness Manager for Westpac in Townsville, who has worked in banking since the early 1980s and in agribusiness since 1997.

Have you seen changes in the way rural people do business?

There’s been a change in the way businesses have viewed their on-farm financial management tools. Over the past 10 years grazing families in general have become a lot more aware of their financial position.

Why is that?

Businesses have had to take on a lot more of that responsibility themselves and what those figures mean since the onset of GST. So they’re not just producing annual figures, or going to see their accountant once a year; mostly they print off monthly figures.

So the GST has had an unforeseen benefit in that it has made people better financial managers?

Indirectly because they’ve had to have an understanding of what it means. From a planning point of view, people are making more timely decisions.

So from a bank’s point of view, graziers are more efficient in managing their finances, but from a grazier’s point of view has there been more understanding from banking institutions about their challenges?

Yes, it probably works both ways. Banking and financial institutions have become more aware of the problems the grazing industry faces. And I think as a result of that it’s trying to get a lot more closely associated with what are the issues facing industry.

Was the forum the first of its kind you’ve been to?

Yes. What was beneficial was that it brought together grazing families, DPI (Qld Dept. Primary Industries & Fisheries) scientists, and banks. Generally when we’ve attended a seminar it may have just been the banking fraternity, so this brought together different groups of people.

Was DPIF’s contribution talking about some of the research they’ve been doing?

Yes, but also linking that research with how that affects sustainability. We visited the trial at Wambiana (a station south-west of Charters Towers in Queensland). But the good thing was that we did some of the theory in the room first, talked about the different practices, so in the afternoon we were able to go out and put some of that theory into practice.

Wambiana has several sites under different grazing and fire regimes. Could you see which was better than another?

Yes, you could come to an understanding of the impacts of the different grazing methods they have in the trial. While we didn’t go through all the paddocks, we did gain an understanding of the different states of regeneration that was happening with the grass etc.

What about trade-offs between production and conserv­ation? If a grazier wants to have a healthy land asset that in the short term might reduce his profits, how does the bank cope with that sort of thing?

When you look at an enterprise you look at the number of cattle and their turnoff, and it is getting an understanding that reducing carrying capacity or turnoff numbers in the short term produce benefits that will flow through to long-term sustainability of the resource. So it’s not just about the numbers of cattle, but how they manage their property.

Will you view properties differently now?

I guess it’s just being a little more aware when you do a property visit. When you drive past a paddock and from the car everything is fine, but it’s when you have a bit of a walk around you can get a bit better understanding.

Would you go to another seminar like this one?

Definitely. I think that this type of seminar that is run by the industry is far more beneficial than those that are internally based. The big advantage is getting a range of different perspectives. There’s a lot of knowledge in that room with the level of experience people have within that industry.