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Abstract
Climate variability impacts significantly on the agricultural service sector, affecting
the operations and policies of agribusiness suppliers, banking and insurance
companies. For example, bank lending policy and agribusiness advice was likely
affected by recent El Niño drought events. Through consultation with agribusiness
suppliers, banks and insurance companies, it is clear that their business operations and
policies could benefit substantially from access to enhanced processes for dealing
with climate variability.
The Agricultural Production Systems Research Unit (APSRU) has demonstrated that
farmers can utilise information derived from climate forecasts and simulation models
in interpreting past experience, planning and decision making. Variability in
production also poses challenges for both input suppliers and firms involved in the
value chain from farm to consumer. Bank lending policies, crop insurance policies,
product inventories and marketing advice may all be positively influenced through
better dealing with climate variability. For example, insurance policies based on the
Agricultural Production Systems Simulator (APSIM) model’s objective prediction of
yields may potentially reduce claimant disputes and cut legal costs, representing
significant savings to industry. Likewise, better prediction of seasonal outlooks using
the APSIM model, climate forecasts and fallow water reserves would allow farmers
and lenders, such as produce suppliers and banks, to negotiate individually-tailored
financial packages. APSRU has recently extended risk management tools developed
primarily for farmers to agribusiness to determine whether better targeted and costeffective
agribusiness services can be provided for the benefit of agribusiness
organisations and Australian farmers.
In this paper we report on our experiences and learnings from our action research
approach, where APSRU researchers are working alongside agribusiness staff on
relevant case studies to identify the opportunities for and to resolve constraints against
implementation of improved agribusiness operations based on climate forecasts and
use of the APSIM model. Our collaborators represent a mix of agribusiness
organisations, including input suppliers, marketers, banks and insurance companies.
The case studies involving our collaborators are described and discussed in the paper,
along with results of our initial evaluation. The use of climate forecasts and APSIM
has generated interest amongst the agribusiness sector. While the costs of conducting
this research are high, we conclude that there are good opportunities for these tools to
assist agribusiness operations in providing better services to Australian farmers.