Profit, Management and Sustainable Agriculture

Land degradation, in such forms as erosion, salinity and nutrient depletion, is affecting crop yields, reducing profitability and making farmers in Australia less competitive with farmers in other parts of the world. When combined with the effect of declining terms of trade, this has caused farm profitability to reach crisis levels in Australia. A common perception about sustainable agricuhure in Australia is that the solutions come at a cost. Because many farms do not make a profit, it is assumed that they caimot afford to make the changes required to become more sustainable. But it can be demonstrated that farming can be made more profitable and sustainable. This is important in the process of encouraging farmers to change to more sustainable practices. While aggregate results show that 50% of farms are not making a profit, there is evidence that a lack of adjustment on the part of farmers and deficiencies in management skills are a significant problem. The top 25% of farmers continue making good profits, in spite of adverse economic conditions. Top farms record profits which represent a return of 10% on assets. These farms continually work at fine-tuning their business to achieve a good enterprise mix, profitable crops in well planned rotations, moderate costs and good marketing.