Farming For Profit

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-By John Boley

If you are the type who runs for cover as soon as someone mentions “consultants”, it’s quite safe – you can come out from under the sofa. For although Terry McCosker runs RCS and does consulting, he practises what he has preached for many years: how to run a farm more profitably.

RCS is Australia’s best known and most respected private provider of education, training and consulting services to the agricultural sector. Since its inception more than two decades ago, RCS has built its reputation through its vision for a regenerative Australian agricultural landscape, through its professional focus, and through client success and word of mouth.

So there is rather more to the RCS story than consulting pure and simple. “There are three parts to our business.” There is a teaching/training component which is a third of the business, a consulting component were Terry and his colleagues work one on one with people and there is also a skills development programme. “What we have found over the years is that if you just give people a training event it doesn’t make a lot of difference, as very few people can or will walk away from a training event absorbing everything they have to absorb and go home and change. The reason for that is that change is just too hard for us all.”

Terry started RCS with a friend in 1985 (he has since become sole proprietor) and worked out in 1991 that “if we wanted people to be successful then we actually needed to provide a system or approach for them to develop the skills that come out of the training.”

So the company developed graduate link and executive link programmes as well as a business analysis and benchmarking system called Profit Probe which “allows us to analyse a business and track it over time, as well as benchmark industries so we know where people sit in comparison to the industry as a whole.”

Profit Probe in particular has been “a critical tool in being able to advise people accurately on what needs to change within their business.”

Terry was born and bred on the land, then spent 11 years working with the Queensland Department of Primary Industries. “I got a cadetship there and worked and studied at the same time. Then I left the government and went up to Northern Territory and worked on a cattle station for seven years.”

That turned out to be an enormous learning opportunity, he says, “because I ran what I still consider to be the largest research project run in Northern Australia.” It was highly successful. “We solved all the problems we set out to solve, plus several more that we did not know were there, and that experience gave me the ability to get a lot of information from all sorts of different disciplines and put them together in a system that would work. I did not know at the time, but that was a holistic approach to agriculture.”

Terry explains that he had access to consultants from all over the world, experts in all fields (no pun intended) and was working across as many as seven or eight related but distinct disciplines. “You would ask a specialist in a specific area what they saw as a solution to a problem and every one of them could solve 80 per cent of your problems. What I learned to do is to take what was useful to me and then apply that in a way which fitted into the farming system that I was developing.” That, he admits, caused some friction with acknowledged experts of the day “because I did not actually take their advice and implement it as they recommended.” He was unmoved. His applications of their recommendations “got good results and basically we have been doing it ever since.”

RCS offers a range of consulting services for both individual businesses and corporate entities. The services are tailored to suit individual particular requirements.

RCS starts by working on the farm family or staff. It is almost invariably the farm manager or owner’s spouse that will initiate the consultancy, but all personnel can benefit because people, says Terry, are the biggest problem (or opportunity). He works on productivity, both in grazing and cropping contexts, and also on ecology. “We were the first people in Australia really to start teaching farmers ecology. Then we based our production systems on an ecosystem for sustainability. That was a radical step 20 years ago.”

He says it is often surprising that farmers’ knowledge of their own business is poor. “It’s sometimes amazing how poor the knowledge is of business and how few people can read a profit or loss or a balance sheet. It’s amazing how few people plan their business effectively and analyse it to find out what the strengths or weaknesses are.”

Farmers’ ability is better when they get on their ‘specialist subject’, so to speak. Arable farmers know their job in terms of how to grow crops, while “in the grazing industry it depends what part of Australia they come from.” Grazing tends to be more efficient in the southern part of Australia and worse in the north, he believes, in terms of understanding the technology of animal production. Partly this is because there is an unevenness in the farmers’ ability to put what they know into practice. That goes with the size of the property and its related ability to make small adjustments. “So if you are on a very large property with 5,000 or 20,000 head, the opportunity to implement [any particular efficiency programme] is much more limited than it is if you have got 200 or 500. You can do more on time if you have a small herd or property.”

Terry points out that some of today’s ‘high-intensity’ farming is actually not very efficient at all, even compared with just letting things get on with themselves. As an example he cites the average weaning rate for cattle right across Australia, which is 65 per cent. However, if you let the herd go feral and let it do what it wants to do for 100 years the weaning rate actually rises to 80 per cent (and that is proven in places like NT). “That means that basically with all the fiddling we do, we have actually made things worse than what nature can do by itself.”

RCS has experts who go and visit the farms, with up to 18 or 19 staff distributed throughout Queensland and New South Wales. “We fly into Victoria and West Australia and the Northern Territory and visit, but we don’t have permanent staff there. We used to have staff in every state but the overheads just got too big so we cut back from over 40 staff to just under 20 but we are growing again now so we need more and more staff on all the time.”

The company’s system uses both permanent staff and contractors, and the contractors are farmers. “They have been through our processes and they may end up being teachers and consultants while still running their farm. They make very good teachers and consultants because they have actually implemented everything they have been teaching. They have great credibility and usually have grey hair as well, which is an advantage in dealing with older landholders.”

These converts to the RCS system of greater efficiency have seen themselves create some spare time with their efficiency, and they want to use that extra capacity to put something back into the industry, says Terry. “That’s probably the major motivation and the second motivation is the mental stimulation in continuing to learn, because the more you teach the more you learn. They continue to learn and grow personally. The third thing is the cash flow they get out of it.”

Perhaps surprisingly, RCS helps and has worked with some of the biggest farm operators as well as small individually owned operations. “We have worked with probably every corporate group in Australia – certainly every group in association with the grazing industry.”

Terry believes the corporate sector is finding out it needs to empower its managers. For them, what RCS does is “essentially to open people’s minds to the possibility of how things can be done differently or better into the future. Staff and managers who attend his course, says Terry, come home filled with not only new ideas and techniques but also a fresh enthusiasm. “A lot of that excitement comes from understanding how the ecosystem works, because they now understand the basis of what they are doing.”

There was a perception that ecological farming costs money, but that is changing now; “certainly in the grazing industry it makes you money. And that is basically what we teach, that if you just look after the resource you will actually do better from it. I have had people come in as cattle men for example (or sheep) and leave as grass producers. Some of them over time realise that what they really are is soil managers and everything else is a by-product. As people develop a deeper understanding of what they are actually working with they actually change their perception of what they are managing.”

Graziers and farmers, says Terry, get three out of four of their raw materials for nothing and they must put a much higher value on what is free. Rainfall, sunlight and biodiversity are free and help provide ecosystem services, which are also free. The soil is the costly resource and it must be managed into a healthy state. The best way to do that, he emphasises, is to focus on building soil carbon but that is a whole other story…

At present, RCS is reconnecting with other areas of farming, such as sugar and horticulture. The basics are the same, says Terry. “Our philosophy is to teach people how to fish, rather than to give them a fish.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

August 19, 2018, 7:48 AM AEST