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Labour costs and availability are key challenges to modifying farming systems

CSIRO's Dr Julius Kotir has found that labour is the main challenge growers face when adopting new farming systems.
Photo: GRDC

Research finds labour is a key constraint to expanding innovations to a whole-farm level.

Labour - and its availability and cost - is the number-one challenge growers face when adopting modified farming systems, postdoctoral research by CSIRO's Dr Julius Kotir has found.

Dr Kotir's research analysed the economic consequences of adopting paddock-scale innovations, designed to improve productivity and profitability, at the whole-farm level.

What would happen to efficiency, profitability and risk if, for example, innovations in cropping intensity (the number of crops grown in a sequence) were adopted across the farm?

Dr Kotir's first step was to undertake bio-economic modelling and identify critical whole-farm factors that could limit farms' efficiency and profitability.

This involved speaking to 26 growers and their advisers in the northern region and modelling eight rotations, selected because of their differences in cropping intensity (in other words, proportion of time in crop) and diversity (range of crops grown).

The results showed that the principal obstacles included:

  • labour availability and cost;
  • risks associated with price;
  • market variability and the climate;
  • capital input costs;
  • consumables input costs; and
  • the shortage of relevant skills and human capital.

Results also showed that diversified crop rotations greatly influence labour and machinery requirements.

Labour challenge

Labour was identified as the number-one challenge and Dr Kotir found most growers struggled to find enough farm workers, especially during critical periods.

"This means that they are unable to complete most farm operations in a timely manner," he says,

"But the biggest issue growers identified was the high cost of hiring and retaining farm workers every season - and this is placing significant stress on their businesses."

The second-most-important factor was price and market variability, collectively relating to risk.

"Production variability was a critical issue, as it underpinned farm business success," Dr Kotir says.

"As such, growers are active in seeking ways to manage risk, including diversification, and innovative production strategies to reduce their exposure to climate variability."

The third constraint was the high cost of capital inputs, such as machinery and equipment.

"Respondents generally think that machinery costs, including ownership, operating costs and financing costs, had increased over time - yet profit margins had not changed and remain highly variable," Dr Kotir says.

Rising cost of machinery

Dr Kotir says this means that to maintain production, many growers rely on old machinery systems, which regularly break down, affecting the timeliness of farming operations.

"When we compared this finding with available information, we found that over the past five years, the cost of agricultural machinery in Australia has increased by 13.4 per cent," he says.

The fourth recurring constraint related to the cost of consumable inputs, including fertilisers, seeds and other agrochemicals.

"The growers we spoke to mentioned that the cost of these inputs has been rising over time," Dr Kotir says.

"Indeed, available evidence from the agricultural industry suggests that between 2013 and 2018, the cost of consumable inputs, such as fertiliser, has increased by 5.7 per cent."

We found that over the past five years, the cost of agricultural machinery in Australia has increased by 13.4 per cent. - CSIRO's Dr Julius Kotir

The fifth challenge overwhelmingly identified was the shortage of relevant skills and human capital to maintain profitable operations in a changing environment.

"This specifically refers to the difficulty of finding trusted advisers with the technical and operational expertise to advise on how to minimise costs and maximise returns," Dr Kotir says.

"Many of the respondents reported that they are holding off expansion plans because of concerns about 'getting the right people' to help them implement on-farm innovations."

Dr Kotir says identifying these barriers and being aware of them helps researchers and others in their practical understanding of what is involved in modifying farm systems.

He says it also leads into another question: "How would adoption of diverse crop rotations as suggested by small plot-scale research impact whole-farm factors?"

To answer this, his subsequent analysis has focused solely on the challenges of machinery and labour requirements, with interesting results in regard to the implications of diverse crop rotations.

Labour calculations

Dr Kotir found crop sequences have a direct influence on labour requirements, with some systems requiring a much higher labour input per hectare than others.

For example (see Figure 1), at a trial site at Pampas, near Toowoomba in Queensland, a diverse rotation of sorghum/chickpeas/fallow/wheat/mungbeans/fallow had a higher labour requirement per hectare (at 0.7 hours/hectare/year) compared to other rotations.

Indeed, growing chickpeas had a higher demand for labour than other crops.

For all sequences modelled, chickpeas required about 0.13 hours/ha/year, compared to wheat and sorghum at 0.07 hours/ha/year and 0.06 hours/ha/year respectively.

"This could be explained by seed inoculation and continuous crop care, for example, up to six sprays in a season, compared to sorghum and wheat, which require two and three sprays respectively," Dr Kotir says.

"This means that a crop rotation or sequence involving chickpeas can have a significant impact on labour and machinery use per hectare."

In general, Dr Kotir says the results suggest that total labour requirements are highest for sequences with a greater crop diversity and a higher intensity.

Overall, he says the analysis has so far revealed in some cases how more diverse rotations can create higher labour demand and peak periods that might in some cases limit adoption in some businesses.

"This means labour requirements may be a critical factor influencing the uptake of diverse crop rotations, even when there are clear agronomic benefits at the paddock scale," he says.

The modelling confirmed that:

  • spraying requires the most labour in all cropping systems;
  • as farm size increases, labour required for more intensive systems may limit productivity unless growers invest in larger machinery; and
  • different farming systems alter peak labour demands across the year (particularly during sowing and harvest), but mixtures of summer and winter crops can mitigate these peak labour demand periods.

Where to from here

Dr Kotir's ongoing research is now considering the synergies and trade-offs between whole-farm profitability, risk, labour and water-use efficiencies associated with adopting different farming system technologies.

Working with CSIRO's Dr Lindsay Bell and Dr John Kirkegaard, the aim is to extend the research undertaken as part of the Northern Farming Systems Project and identify where whole-farm issues may limit innovation adoption.

"Many of the drivers for increased productivity and profitability researched in that project - such as cropping intensity, cropping diversity, nutrient supply and quality - have been done at a paddock scale," Dr Kotir says.

"We want to explore the economic implications of taking them to a whole-farm level."

GRDC Research Code: 9175454

More information: Dr Julius Kotir, 0404 650 811,,

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