Timothy McClelland - Opportunities in family farm business
Ricardo Rios spent the first 25 years of his working life a computer programmer. Ten a complete change in direction! 2006 some New Zealand investors and Ricardo teamed up and founded ¨Chilterra.¨ The company, with Ricardo as the majority shareholder began dairy production in Southern Chile. Almost 9000 acres are now farmed with just over 4000 cows being milked. One hundred and ten staff are employed with the business.
Heather, Robert and Tim have finally arrived in South America. The plan is to visit Chile, Peru and Brazil during the whistlestop tour which will last fourteen days! As well as ¨soaking up¨some of the culture of the three countries we aim to increase the breadth of knowledge of South American agriculture as well as furthering our Nuffield studies!
Heather Wildman is studying ¨knowledge transfer within the Scottish dairy industry¨ whilst Robert Craig is looking at ¨sustainable agricultural production¨ with a focus on water availability. To complete the picture my subject is of course ¨responsiveness to change¨within family farming units. Quite a diverse range of subjects. Looking forward to meeting some very interesting people!
Look out for the next blog post when we will mention some of them.
Another plane ride, this time from Adlaide to Melbourne, saw me visit my last farm on the New Zealand and Australia leg of my Nuffield Scholarship study tour. Damian Murphy, a 2012 Australian Nuffield Scholar farms 102 ha approximately 2 hours south of Melbourne. In a previous life, Damian held a management position within the CASE IH organisation in Australia. Twelve years ago he and wife Trudy made the decision to "go back dairy farming." Quite an unusual move, given Damian never wanted to be a farmer. What changed - the thought of raising a family in Melbourne! Damian and Trudy decided living in a rural community would be a better environment.
When my host returned home to farm along side his parents he was an employee. This progressed to him recieving 2% of the equity of the business for every year worked. 12.5% of the milk cheque was passed to Damian as the next stage (with no costs bourne by him) this developed to 33% of the milk cheque whilst paying some business costs. Currently a 50:50 share of the milk cheque is the arrangement. Costs, other than shed (parlour) and herd costs, (which are 100% down to Damian) are also split on a 50:50 basis with his father.
Looking ahead the plan is to purchase the farm outright possibly in 2013. Over the last 12 years the Murphy family have attempted to plan business changes well in advance. Each move always being carefully thought through and whenever possible "business kept as business" and "family kept as family." The end goal is both generations with satisfied expectations, living comfortably and still speaking! This highlights yet again how differently the succession "game" is played in the Southern hemisphere. Seems like a much better system!
For Damian and Trudy, as they move toward owning the business outright, there is a realism, brought about by the preceeding 12 years and by the likely high level of debt required to purchase the farm, that hard work will be required to make the business work! They are both determind to succeed as they look to "create wealth" for their three young boys.Trudy combines a part-time job with providing admin assistance on the farm while Damian gets the "work life" balance in proportion by employing relief milkers!
Their journey during the last 12 years has demonstrated responsiveness to change, as first a massive career realignment took place, followed by the progression outlined in previous paragraphs. Now as 2013 nears for this family more change is up ahead!
All in all a fitting point to bring this part of my study tour to a conclusion.
As I prepare to catch another plane to Brisbane to reintroduce my self to Karen, Cameron, Rachel, Hannah and Nathan can I wish all readers of this blog and their families, a peaceful, Christ centered holiday period!
Ooops almost forgot to mention - I plan to spend the next seven days studying opportunities for tourism and diversification for farm families on Hamilton Island! Watch for the next blog for an update!!!!!!!