Episode 3: Finding Funding & Building Networks

Does big change have to cost big money? It doesn’t have to.  

In this episode we look at funding on-farm innovation and building a network which will lead you to new opportunities.  We look at all types of financing from debt-financing (ie. asking the bank manager!), to vendor financing, government grants, crowd sourcing, investors and even venture capital.

How do you know which option is best for you? And how do you explore potential opportunities with  government or University-based projects which are looking for farmers or technologists to trial their research? 
 

Guests: 

Adam Coffey, Coffey Cattle Co.
Adam Coffey owns and operates a 2500ha beef breeding and trading operation on the central coast of Queensland with his wife Jacynta and two boys, Will and Sam.  

They are very focused on production efficiency, whilst ensuring they continuously improve the condition of land under their stewardship. 

Christine Pitt, Farmers 2 Founders
Christine is a globally recognised thought leader, investor and entrepreneur in the ag+food tech ecosystem. She has a particular interest in building globally networked agrifood ecosystems and creating new business models for raising funds to invest in disruptive innovation across the agrifood value chain. Her passion is to make a positive impact in the areas of sustainability, human health & wellbeing, food waste, food security, and creating transparent and ethical agrifood businesses and value chains. 
Christine holds a Bachelor of Science, a Masters of Health Administration, and a Doctor of Business Administration in Innovation & Entrepreneurship.   

Fiona Best,  Birchip Cropping Group
In her position as CEO, Fiona works to bring relevant agricultural research and extension opportunities to farming communities by attracting investments to improve the prosperity of broadacre farming locally, regionally and nationally.

After growing up on her mixed enterprise family farm, cropping and producing sheep, Fiona studied a Bachelor of Agricultural Science (Honours) and Bachelor of Commerce at the University of Melbourne.  Fiona is the regional director of the Victoria Drought Resilience Adoption and Innovation Hub.

Emma Ayliffe, Yacker App
Emma is a farmer, researcher and consultant based at Tullibigeal, NSW. After moving from South Australia to New South Wales working as a cotton agronomist, Emma moved to Tullibigeal with her partner where they bought her first 1700 acre farm with the support of Craig’s family.  

In 2020-2021, Emma was Australian Young Farmer of the Year. Emma prides herself on being an innovator pushing the boundaries and coming up solutions with farmers problems. 

This podcast has been created by the Victoria Drought Resilience Innovation and Adoption Hub and is funded through the Australian Government’s Future Drought Fund.

Transcript

Kirsten Diprose:

We acknowledge the traditional owners of country throughout Victoria and recognise their continuing connection to land, waters and culture. We pay our respects to the elders past, present and emerging.

Adam Coffey:

If you're prepared to challenge the norm, I suppose then there always seem to be plenty of people knocking on your door to help you.

Christine Pitt:

We get a little bit distracted by some of the high-flying Silicon Valley top examples who go straight to venture capital. They've actually got no revenue, no customers, no validation and obviously a lot of overly exuberant investors.

Kirsten Diprose:

Hello. Welcome to Innovation AG, brought to you by the Victoria Drought and Innovation Hub. I'm Kirsten Diprose. This episode is all about the money.

Most of us feel all icky talking about money. But as I discovered in this episode, not me so much. In fact, at one point I was asked, "Why am I so obsessed about money?" It's a fair point. But I'm on a mission here. Because when you have a big idea, you generally need to fund it somehow. I'm not afraid. I'm asking the tough, totally politically incorrect questions about where to find the money.

There's a few options out there from: probably the most common one, asking the bank for a loan; to vendor finance; crowdsourcing; government grants; investors; or even venture capital. It all depends on what you're trying to achieve. In this episode, you'll hear stories about funding innovations, whether that's buying land, launching a startup or trialling a new product or system on the farm. Of course, a bit of a disclaimer, we are not giving financial advice in this podcast. There are plenty of independent and accredited people out there who do that, so tap into that.

The first person who was generous enough to let me ask them about their finances is Adam Coffey. He and his wife, Jacynta, are the directors of Coffey Cattle, a beef farm in Central Queensland. Because I'm not completely rude, I asked Adam to tell me a bit about himself first, before I asked about the money.

Oh, no music this time.

Here's Adam who started out with big farming dreams, but no farm.

Adam Coffey:

I guess we're called first generation farmers, I suppose, if you want to put a label on things, not that I like labels. But my wife, Jacynta and I, we both grew up in Tassie. We lived and worked in a lot of different parts of the country. Actually, she did a commerce degree. I didn't even finish school and I was working in hospitality. Then ended up jackerooing through New South Wales and Queensland for a few years. Yeah, found my way into farm work by accident.

But I decided I needed a piece of paper, so I went to Marcus Oldham College in Geelong, where I did a farm business management course for three years. Then Jacynta, she was doing an auditing job in Hobart. She needed a change. We headed it off around Australia. We didn't get too far. We went to Western Australia and got a job managing a sheep and cropping place there. Long story short, ended up in the Kimberley for three, four years at the same company and across the Longreach briefly and then management positions there and back in the NT. Yeah, a long and windy road to property ownership here on the central coast of Queensland.

Kirsten Diprose:

Why did you want to own your own land?

Adam Coffey:

Oh look, I guess it's the ultimate dream, isn't it? We didn't ever really think that it was a possibility. I guess we didn't really have a lot of capital behind us. Although we loved agriculture and we loved I guess the sector that we ultimately fell into, which was that extensive northern beef area. Managing is one thing. Managing other people's properties, but it really is dream to run your own show.

We've always taken opportunities as they came along. Jac always accuses me of annoying people to the point of always knocking on doors I guess. Look, we've been up a lot of dead end streets and a lot of dry gullies, but we've also had some very fruitful relationships with people. The corporate ag side of things nowadays, there's so many different areas you can go into it. I suppose there's lots of opportunities available there in terms of what you want to do, but it also pays pretty well these days.

Certainly, yeah, that was a big part of how we saved up for our own land was corporate salaries. When you're out in the bush, you don't have a lot of things to spend on. You basically supplied food, a vehicle, fuel and a good salary to boot. It's a good way to save money. We also bought and sold a couple of residential houses in Tassie. I don't know if there was much strategy behind that. Ultimately the money out of those properties allowed us to put a deposit on a place where we are now.

As I touched on some beneficial arrangements that we had with some different people, most notably it was a family up near Katherine that had moved to Brisbane. They'd been in the cattle industry all their lives up that way. They had one property left. I think it went to the market a couple of weeks after live export ban actually. It was sort of things were down and out and they didn't need to give it away. We came along at the right time and ended up there for three or four years and effectively split everything down the middle with them.

When I reflect on that, they were wonderful people to let us do that, but they had a need and we had a need. I do believe that those opportunities are always out there if you're prepared to annoy enough people.

Kirsten Diprose:

I suppose that really is building your network as well. Relationships as well as some of the financial stuff, it was relationships as well.

Adam Coffey:

Yeah, a 100%. Ag's not that big. It's not a big world. It always fascinates me that I can meet somebody, make a connection and think that I'll probably never see or hear from them again. There've been instances where people that I've randomly stumbled across have actually been pretty crucial to success going forward. You never know who you talk to and whatever relationship you develop. You never really know where that's going to lead.

Kirsten Diprose:

When you want to approach someone with a business proposal, do you approach them more with what you've got in mind or perhaps with knowledge of what they might be interested in?

Adam Coffey:

I think you have to look at it first and foremost from their side of the equation. You're not going to get very far if you're pushing a one way street out of what you want. Particularly nowadays, when we got into the property here where we are now, that's nearly seven years ago this year. I dare say it was a little easier. We were on the bottom of the property price boom and inputs, fuel, steel and all these things are a little cheaper, relatively speaking. It was probably a bit easier to get in.

But I think when I look at any of the relationships that we've had, it's got to be mutual benefit there or it's not going to last long. Each party will go away with a bad taste in their mouth. As I said, agriculture's a small world so you can't afford to burn too many bridges.

Kirsten Diprose:

Adam was also really clever in where he chose his farming property. At the time it was more of a renovator's delight than premium farm land.

Adam Coffey:

Oh, it was pretty ugly. We'd looked all over for a place. We actually had a deal on a place about a 100k West of Longreach, which we put a lot of effort into. It fell over at the last minute, which was pretty gut-wrenching. We were a bit down and out I guess at that time. I remember a lot of people saying, "One thing ends, another thing begins. Everything happens for a reason." I was ready to throttle the next person that said that to me. But it's true.

I went on a lap of Northern Australia, Queensland and this place just jumped out at us. I guess being constrained by capital, we couldn't really afford to buy somebody else's improvements, so that was a big plus. This was a failed timber plantation that was owned and operated by a managed investment scheme. We essentially bought from receivers. They I guess in a lot of ways allowed us to buy what was essentially a very good block of dirt but not much. As I say essentially a good block in a high rainfall area, sort of 1100 mil.

Funny, we do a bit on our visions and goals. It's just sometimes a bit of a struggle. But we always had this vision of maybe retiring to a property near the coast because we loved the ocean. We grew up in Tassie doing a bit of sailing and whatnot. We thought that was a lifetime goal. Maybe somehow, we reached out a little bit earlier than we thought.

Kirsten Diprose:

It was a timber plantation. What did that mean for the soils when you came in? Was there a lot of work for you to make it right for pasture?

Adam Coffey:

One of the main reasons we decided to buy the place was that despite, I guess everything that the timber plantation company had done to establish trees, there were still some really good improved perennial pastures underneath the trees. It's probably a traditional sort of grazing area. Certainly a lot of people run on native pastures. Again, being cash constrained, we figured if we could just remove the trees then we've got some pretty good pasture there to run with. As everybody knows, pasture renovation is a bit of an expensive exercise.

We'd actually hoped that the trees might be some form of asset. We didn't really have the money to deal with them to start with. We had a about 400 hectares of what was a Eucalyptus gunnii. It was bred to be chipped and pulped. It was rubbish to be honest. It didn't really have any economic or environmental value. Even people who have tried to keep some of these trees for shade value, they just died and fell over when they were thinned out. We did decide to tackle that sooner rather than later.

I did a Nuffield scholarship a few years back actually just after we moved here. I spent a bit of time in similar high rainfall areas in Brazil. Despite Brazil and all its government failures, I certainly have had a very good agricultural arm - so developed a lot of hybridised grasses and a lot of improved species. I saw over there... My takeaway was to improve what you've got rather than try and get bigger and buy the neighbour out. That was really the crux of what my Nuffield study was all about.

Kirsten Diprose:

Is it regenerative agriculture, would you call it that?

Adam Coffey:

Is it regenerative agriculture? Again, I'm not a big one for labels. I think you do whatever works for you. I think we all need to remember that first and foremost, it's got to be profitable. Because if you're not around to undertake these practises or you you're going broke, it's not a good outcome for anyone. The traditional pasture renovation method around here, I suppose would be to plough it, spread your seed on, spread your fert on if you want to go that way. We just saw that as too much of a risk in an area where we can get large amounts of rainfall in a pretty short period of time. I don't want to watch our topsoil go down the gully.

We invested in a disc drill. This seemed like a bit of a no-brainer. We basically spray out a paddock and to take a step back, we run grazing charts so we know what yields we're pulling from our paddock. So that then enables us to target the low performing paddocks and put some multi-species pastures in there to basically boost the yield. We're not disturbing the soil so we're not disturbing our soil structure. There's not really any risk of erosion.

Kirsten Diprose:

How's it working out for you so far with the multi-species pastures? They've probably been in for quite a few years now. What's your reflections on it?

Adam Coffey:

Yeah, we're doing a bit every year. We're providing it off as we can afford it. As I say, one part was full perennial renovation. Then the other thing we're mucking around with this drilling in cool season variety, so temperate species that grow down your way in the spring and summer. Moisture can be a bit of a limiting factor up here in winter, but we haven't had that over the last couple of years, so it's looking good.

Kirsten Diprose:

You haven't been affected by any of the floods the last couple of years?

Adam Coffey:

No. We're sort of up in the foothills I guess. We border onto a mountain range to our west, so our form of flooding is usually a lot of water down creeks and takes out a few fences, but that we won't, touch wood, ever really get inundated here. I think it was 2017, not long after we moved here, we had like 602 mil in two days in an October rainfall event. Followed by probably the three driest years in living memory around here. Yeah, it's been a bit challenging.

But it is what it is. You roll with the punches. I think I reflect on those dry years as being a positive for us in that we were doing a lot of stick raking of this plantation timber, a lot of property development where you really can impact your production. But when your production's probably not cranking that much from a seasonal perspective, there wasn't really a great deal of opportunity cost in that. That was a positive spin on it.

Kirsten Diprose:

Are there any future-proofing measures you think about when it comes to either droughts or floods? If so, how do you think about funding them?

Adam Coffey:

The number one focus for us is moisture infiltration. We don't want a drop of water to go down the gully. We want it to go in, recognising that some runoff at times will be inevitable. In terms of funding, I think that funders, banks, are very much on board with this concept. Now we have a very good relationship with our bank. We have actually been able to capitalise on some opportunities that have come from them around remote sensing of natural capital assets, I guess you'd call it. I guess from their side of things, they're trying to determine how sustainable our business is. It's very early days there, but I'm an optimist, I do believe that they want to work with us because that's what their business model depends on. I think there are some really good synergies there for landholders if you're willing to be proactive about it.

Kirsten Diprose:

Measuring natural capital from a financial perspective is a relatively new concept. But there's quite a bit of interest in it. Natural capital is soil, water, grasses, plants, native animals, basically anything in the natural environment. The Australian government's currently working with financial institutions like banks to develop tools to measure natural capital.

There's actually a study right now by Latrobe University that's due to finish this year. It's all about on-farm natural capital accounting. Watch this space.

But another new area of funding that's really burst onto the scene in ag over the past few years comes from the world of startups. Of course there's always been investors around to back good business ideas. But now there are quite a few organisations and companies who are running bootcamps and accelerators to commercialise farming innovations and value add to farming businesses. One of those groups is Farmers2Founders.

Christine Pitt:

We have a strong belief that farmers need to be totally embedded in the innovation process. They're typically the problem owners, but they can also become the problem solvers.

Kirsten Diprose:

That's Christine Pitt. She's the Founder and Managing Director of Farmers2Founders. Sure, they can help you find funding, but Christine says the focus is really about funding growth.

Christine Pitt:

You know you can go onto Google and find a million different ways in which startups around the world, in food and agriculture speaking specifically, are trying to raise capital. Because it is a really important part of a growth mindset and a growth strategy is how do you fund that growth? Because it's really hard to do it purely organically just through revenue. Although we do tend to in the early stage, really encourage the startups that we work with to think about how do they get that customer acquisition, how do they validate their real opportunity space by actually getting revenue from customers who are willing to pay for their product or their service.

I think we get a little bit distracted by some of the high-flying Silicon Valley type examples who go straight to venture capital. They've actually got no revenue, no customers, no validation and obviously a lot of overly exuberant investors who are willing to put money in. Then it all comes down and crashes around them.

We like our startups to have a bit more of a solid base before they get too excited about raising external funds. But venture capital's probably a bit out of the reach of early startups. Certainly in Australia, our venture capital market is really just starting to evolve. Whilst we've had some good VCs who've done work in other sectors, they're really only now starting to get attracted into the agriculture and food space.

There's a lot of other options that early startups can look at and could be for their very earliest raise. We like non-diluting funds that can come in even through government grants or industry support. In our own harvest accelerator programme, we actually do make typically a $10,000 grant into those businesses, which is not a lot of money, but for early stage businesses it can just help them get over an initial hurdle or do something around their prototype or whatever they need to do, their marketing strategy, whatever it might be. We don't take equity for that investment.

We really encourage them firstly to look at revenue as a way of building their business, looking for non-dilutive funding, whether it be from industry and government sources typically, or we run some corporate accelerators where corporate will put money to the startups and not ask for any equity position just to get them started.

Then they can start to really get themselves seriously looking at external funds, which would typically require them to give up some equity in their business, which is not a bad thing, but that might be through, there's a lot of high net worths now who want to invest in impact areas. Agriculture is definitely a target or a growing interest to them. There's angel investors who are also really interested.

Then the equity crowdfunding. That's only probably really kicked off in Australia about the last three years. You've been able to do crowdfunding for a long time, but equity crowdfunding is some kind of sophisticated version of crowdfunding. We think it's a really strong viable option for early stage startups. Probably looking at that, what we would call that pre-seed or seed raise with about 500,000 maybe up to 1.5 million.

Those are probably more likely the sources of funds. They can look at debt financing as well, which most farmers are pretty familiar with, given that they are on first name basis with their bank and bankers. Yes, there's lots of options in that early stage. You really only become attractive to a venture capital when you're much further down the track.

Kirsten Diprose:

Okay. So if you're looking to take your innovation down the startup route, you might not head straight to the VC side of things. It's probably worth thinking about whether you actually want to go down the grow big, grow fast route altogether.

Christine Pitt:

We come in because we can both help the business understand what their value proposition is, how they're more likely to be able to attract customers. Because fundamentally what startups bring to their investors, regardless of whether it's a bank, a VC, an angel or whatever, is that promise of a future growth strategy. We are definitely working with startups to first of all assess whether they've even got a growth mindset, whether they actually are looking at growing their business in some way that's different to an SME.

When businesses start, it's not always clear what direction they're going to go in. Sometimes the founders themselves, some have a very clear view that they're on a fast growth trajectory. That's what we would describe as a startup journey versus others are really just looking for a nice small business that will bring a little bit of extra income, create opportunities for their children or help them serve a defined local community.

We try and really understand what the goal of that founder is. Our business is mainly directed towards the first group, the startup group. But we're quite happy to work with what will eventually become a small to medium-sized enterprise. An SME who's probably not going to grow fast and probably at best will only be able to approach a debt financing model once they've got something that's obvious to hold up for the risk that finance is being acquired for.

I think debt financing typically from banks in agriculture is very much required those really obvious assets that could be liquidated if everything goes turns to custard. Banks, this is not in their wheelhouse generally or hasn't been, looking at financing startups. Because that's on a promise, that's on a dream rather than a clear hardcore physical asset that they can see and think about, "Okay, if this doesn't go well, I'm managing my risk here."

Whereas investors in startups have a very different perspective on what they're looking for. They're definitely looking for much greater returns than a debt finance interest rate would require. But they also understand that only a very small percentage of the investments that they make are going to deliver that very high return. That will take account of all the risk of the ones that don't go anywhere that go the other way, go down the gurgler as it were. It's a very different investment model.

Kirsten Diprose:

Yeah, absolutely. If I'm a producer wanting to do something quite different with my produce, whether that be wheat, milk or anything else, where's a good place to start? You've got this great idea. You're really passionate about it. How do you know where to go for funding for that next step?

Christine Pitt:

Funding's probably not the first thing you need. Particularly if you're talking about a product. Because if you're a farmer and you're looking at adding value to your existing agricultural off tank, you don't need a lot of money to get started. What you need is to understand what's your customer segment? What's your market? Does anyone care about what you care about? That's the thing when we have producers come into our programmes that are around that kind of innovation, which is a product innovation. That's the first thing that we work on.

We actually have an early stage programme we call our Hatch Programme where they're trying to hatch their idea. But what we are really trying to get them to do is to validate their idea and to work out who cares about this. Typically, anyone who comes as an entrepreneur is already passionate about their idea because they're trying to solve their own personal problem usually. Either they're somebody who's got dietary issues or they've got a kid who's a fussy eater. Or in the case of some producers, they've got some ugly produce that they're trying to get rid of at a price that's not going to send them broke.

They're trying to solve their own problem first, which is fantastic because they understand that. What we then get them to do or what we would encourage anyone who's thinking about, "Should I do this as a business idea?" Does anyone else have this problem? Can you actually find someone or explore a customer segment or a consumer segment that shares the same passion or need as you?

Once again, if all they want to do is solve their own problem, that's fantastic. There are things they can do. But if they really want to turn this into a business, it's the same thing. First of all, validate that this problem is real for someone else other than yourself. Get out there and do customer interviews. Get to trade shows. Go to demo sites, whatever. Just start talking to the people who might be your future customers to make sure that the problem exists.

Kirsten Diprose:

Say you've done your customer validation, you're confident that it is not just you falling in love with your own idea essentially. Where do you go then to actually get the money to make it happen?

Christine Pitt:

You're focused on the money here, Kirsten.

Kirsten Diprose:

That's what people want to know, right? You'll probably make a point that maybe it's not just about the money. How do you know that, "Okay, I've got a really good idea?" How do I then make it happen without betting the farm on it or-

Christine Pitt:

Exactly.

Kirsten Diprose:

... really putting yourself significantly behind?

Christine Pitt:

Yeah. The last thing we would want anyone to do is bet the farm, the house, the kids' education, the trust fund or whatever of their startup too early. There's so much you can do and you should do before you start looking at the big dollars that you either going to find yourself or you're going to have to go out to the investment community. The problem lies when people have access to money that family, friends and fools as we talk about it or their own money or they do make a huge risky decision and they do it too early before, they've got some reason to believe that this is a viable option.

I'm going to keep resisting your question just for a bit. Then I'm going to come back to it. We certainly use what we call the lean startup methodology when we are working with startups. What lean startup is, is to fail fast frugally. To go as far as you can go with as little money as possible, is really what underpins the lean startup methodology. It's a well proven methodology. It's used by startups all around the world. In the end, it's the thing that probably is going to make the biggest difference to future success or otherwise.

It certainly helps startup founders avoid that early stage exuberance if they happen to have access to funds and then they just might as well dig a hole, buy a boat, I always say, rather than put it into this startup. We try and get the startup to go as far as they can using that methodology before. Now that's not always practical. And one example where it's probably not practical to build, say you build prototypes and we say build a prototype for no more than $50. Most people can get $50 together.

In that very early stage, we're asking them to build prototypes that they can put in front of customers and then there's a whole range of experiments that they can do to prove to themselves and future investors that customers are likely to care about their solution. There's lots of things you can do with very small amounts of money. Now 50 is probably a bit extreme, but certainly a $1,000 or even the $10,000 that we provide for some of our startup programmes, that's enough to really start you off on the journey.

Then it really depends on what kind of product and how much it costs you to build that prototype. Ones where this probably doesn't work is hardware, a big machinery type solution. That's really where you need to get serious money like a 100,000 or more to build even that very first stage prototype.

Typically, as I said before, we're looking for that non-diluted funding at that stage. Whether it's government grants, industry support, maybe marshalling your own family and friends at that level would be what you would need to do. Whereas a food product, a SaaS product or an app, a software product, you can develop that without seeking very much external funding at all. It's only really when you're getting to that scale up stage that you really need to go out to the investment community, that first scale up.

You're trying to get some level of market traction. Investors won't invest in you unless you've got some evidence of customer attraction. That's what you got to put your effort into with as little money as possible.

Kirsten Diprose:

Now you might remember Emma Ayliffe from Episode 2 on decision making. Her ag innovation, Yacker, which is an app that connects farmers across the country, actually came up through the Farmers2Founders programme. Of course, I also asked Emma about how she and her partner, Heath, found the funding to build the platform.

Emma Ayliffe:

We took our idea to a number of agricultural businesses. Companies such as Bayer and Elders and pitched our idea. They thought it was a great concept. They all gave us some money to help bankroll, getting it built. At the moment, it is basically just self-funded with the support of these agricultural businesses. I think we have 15 now on board backing the project. The goal will be to have it make money eventually, but right now we're just trying to get it right.

Kirsten Diprose:

Was it easy to get funding? The way you explained it sounds like, "Oh yeah, you just went up to Bayer and Elders, got some money, brilliant. But what was it like?

Emma Ayliffe:

It was a challenge. It's a completely different skillset being able to pitch an idea and to create that kind of, I guess, concept plan and a business plan to be able to take to these guys. It was a fair bit of back and forth. Year one, Heath and I would've put, I don't know, probably 24 to 48 hours a week into refining pitches and going to meetings. There definitely have been companies that are still not interested at this stage because we don't have the user base on it. But it was just a matter of us understanding what the need of agriculture was and then refining our pitch and our platform to match what they were trying to get out of it.

Kirsten Diprose:

Government grants can also be a good option to help kickstart or boost a project. Here's Christine on where to find them.

Christine Pitt:

Definitely there are a number of different grant alert services that you should get yourself onto. There's GrantConnect, there's the Community Grants Hub, there's a directory of government grants for federal government grants. You can go onto business.gov. You can do keyword searches or you can scroll through all of the open grants just to see what might be available.

If you've got a specific industry solution, you might also look at the R&D corporation. As probably your listeners know that all of the agricultural commodity sectors in Australia have an R&D corporation that looks after them. I would definitely be looking at both. That's a good place to also find events to go to. I'd go onto their websites to have a look there.

You need to look more broadly than just agriculture. Any government department that's in agriculture, food, industry development, regional and economic development would probably have some form of grant programme open at any point in time.

Kirsten Diprose:

If the idea of searching around on Google and setting up alerts doesn't appeal to you, one way to keep your ear to the ground is to join your local farming systems group.

Fiona Best:

Attachment to a farming systems group is always helpful because farming systems groups are often the first to know about these opportunities that are available for farmers directly to apply for. Many farming systems groups will circulate that to their membership groups.

Kirsten Diprose:

Meet Fiona Best, the CEO of the Birchip Cropping Group or BCG, a farming systems group based in Western Victoria. Fiona also grew up on a farm just over the border in Tooleybuc.

Fiona Best:

I've got three siblings, so an older brother and two younger sisters. We were always actively involved in what was going on on the farm, whether it was at shearing time or at sowing, just sitting on the tractor with my dad or my grandfather.

I do remember though driving down our driveway, which was 5 kilometres long and the school bus would come in. I do remember if it was dry times and driving through the crops to get through the driveway, I do have a memory of thinking, "Gee, I really hope it rains. That crop really needs rain."

While my experience was very, very positive and then I obviously went on to study agricultural science at university thinking that I would want to have a career in agriculture, my memory is snippets of taking on those farm pressures of, "Are we going to get enough rain to finish this crop?"

Kirsten Diprose:

While Fiona didn't grow up in the Wimmera, she certainly understands the sentiment of farming in one of Australia's best cropping districts. One of this region's keys to success is it's not-for-profit research and extension group, BCG, which I should add is part of the Victoria Drought and Innovation Hub. While groups like BCG might let you know about the money ...

Oh cool, my music's back. As I was saying, BCG will let you know about funding opportunities, but it's really the networking, collaboration and research trials that's the bigger benefit. BCG is a really interesting case in point.

The town of Birchip is tiny. It's famous for the Mallee bull, which is a big, red bull sculpture on the main street. You should really check it out. But in terms of population, only about 700 people actually live there. Yet the Birchip Cropping Group has a national and even international reach. Here's Fiona again.

Fiona Best:

The story of the Birchip Cropping Group is a pretty magic one. It started out with a group of young farmers who were meeting regularly through a discussion group, looking at their farm finances and sharing ideas and successes and failures around what was working. It was a programme at the time called Farm Management 500.

Look, this group of young farmers as part of that discussion group went on a bus trip to the Hart Field Day group, which is in South Australia, where they were running research and development trials. They had a field day and lots of discussion happening. It was actually on the bus home from that trip that the group of farmers involved in the Birchip discussion group said, "Why couldn't we do something like that right here in The Mallee of Victoria?"

From there, it grew. We became more organised. From that little group of farmers, there was a whole succession of activities and things that have gone along the way to make it the group that it is today. That's an amazing success story that has huge influence across the region. Now Australia and internationally, BCG have been asked by the Chilean government to come and talk to their agricultural extension officers about how to communicate agricultural research outcomes to farmers.

Kirsten Diprose:

For people who are listening and are thinking about their own practise change or new innovation, that could be farmers or there could be someone else involved in the ag industry, what benefits can you get from farming groups like BCG?

Fiona Best:

I think the exchange of ideas is absolutely one and possibly the most important. I think being exposed to the new thinking and new ideas, new research, whether that's in AgTech or whether that's in new germ-plasm becoming available in various crop types or whether it's a new approach to agronomy. Part of that, Kirsten, though is doing it in an organised way. We've got the ability to run the research, to run the extension activities that complement the research, that bring people together.

I think one of the values of having a farming systems group is that you've got people paid to do that work for the benefit of farmers. The challenge for farming as we know is it's busy. It's already busy. No one's necessarily got the time to run their own research trials or post their own field day. To have a group that can do that on behalf of the farmers across a region is really, really beneficial.

Kirsten Diprose:

A great demonstration of this group innovation is with no-till cropping. It's a normal practise now. But 15 years ago, there was a battle amongst farmers over whose practise was best, a kind of friendly war of innovation waged in the Wimmera.

Fiona Best:

Yeah. The move to no-till farming systems across the Northwest part of Victoria started to occur in the 90's, then really ramped up in the early 2000's. Now it's I would say 99% adopted practise. Look, it came again through information exchange, through trialling, through sharing ideas about what we were trying to achieve. We had farming systems where we're operating in a low rainfall environment, so it became very apparent that we needed to maintain ground cover, make sure our soils were protected from wind erosion. One way of doing that is to make sure that we retain stubbles.

That was really the start of no-till. I was involved in what we called a farming systems trial. BCG had four farming systems and they were championed by a local farmer. One was what we called a fuel burner that was cultivations. We had the hungry sheep system, probably not politically correct now, but that was based around high stocking rates where sheep were involved in the rotation.

We had zero till system, which was a disc system. Then compared to a best bet system. There was four farming systems being championed by local farmers all operating at slightly different system. We replicated that on a large scale and I think that trial ran for about 13 years. We would come together every year, compare the different systems.

I think it was a key part of the transition for many into getting confidence into the no-till system. But also it highlighted that a lot of farming systems work well if the attention to detail is undertaken, the summer weeds controlled, all of these sorts of things came into play. But we had some great debates around different practises and different farming systems.

The four farmer champions who were involved in that project were so generous with their time. They were prepared to have to defend their system and their way of operating. Incidentally, all the different farmers over time ended up on their own farm farming similarly. The fuel burner farmer, he now runs a no-till farming system. The hungry sheep system probably lowered their stocking rates slightly, also adopting a no-till farming system. The best bet system. Yeah. It was interesting over that journey that all of those four farming systems while quite different at the outset, all ended up merging to adopting a system that was probably the compromise of all of them or the best bet of all of them.

Kirsten Diprose:

While the no-till debate is largely over, BCG is currently tackling one of the biggest issues in cropping today. That's the management of nitrogen.

Fiona Best:

We know second to water, nitrogen is the biggest limiting factor for yield production. Outside of getting enough rainfall, nitrogen is a key driver of production and yield. As the farming community, are we managing our nitrogen cost effectively and effectively to achieve the best outcome? A piece of research that has been done over the last few years is looking at different nitrogen management strategies.

One of those strategies is to look at N banking, which is irrespective of the season, putting on a set amount of nitrogen based on average yield potential for a particular region.

Kirsten Diprose:

N banking, as in the letter N, is looking promising according to a BCG Latrobe Uni study for places like the Wimmera where soils are free draining and don't leach the nitrogen if you put too much fertiliser on. This research has the potential to drastically increase yields in some regions of Australia, but its early days.

Fiona Best:

One of the key things that BCG has tried to do is de-risk some of the decision making by trialling it first and researching it first. Look, I think nitrogen management as an example is one that's still going to be hotly debated for a few more years, I would say. Because as I mentioned, it's a key input second to water that drives yield. We want to try and finesse it to get it right.

Kirsten Diprose:

Getting back to the money side of things ... Wait, hold on. No mysterious music here. It's too soon. I'm actually about to make a point about sharing and working together, collaboration. Well, Fiona is.

Fiona Best:

One of the key reasons BCG exists is to bring research and development activity in improved farming practise to the Wimmera, Mallee and beyond. An essential part of being able to do that is to attract and find dollars from various funding sources ourselves. While we encourage great collaborations amongst our farmers and exchanging ideas, BCG has also had to do that as well to ensure that those research dollars have found their way to the region.

We've developed great relationships with the Grains Research and Development Corporation, Meat & Livestock Australia, AgriFutures, federal and state government. I think that's been one of the key important success factors of BCG, is having those collaborative relationships with all of those different funding sources.

Kirsten Diprose:

I'm glad you raised that point. Because I think we often hear how Australia's got great research and development, but that our commercialisation of these ideas is not as strong. But I wanted to make it clear that there is a strong link between the research and development that happens here in Australia and industry level. There is a strong link to commercial outcomes when it comes to what's happening on farms. It goes through a process. Once it gets to the farm level, then there is that commercial outcomes.

Fiona Best:

Yeah, for sure. We're seeing evidence of commercialisation every day happening on farm. It is commercialising the research is by taking that new germ-plasm, sourcing the seed and sowing it in a paddock for a particular crop type. That in itself is a form of commercialisation. It's going through that research phase right through to adoption. Farmers are commercialising all of that all the time.

Kirsten Diprose:

There are lots of opportunities to get involved in projects and trials all over the country, which might lead you into the very forefront of innovation or at the very least could just learn something along the way. Here's Adam Coffey again.

Adam Coffey:

For me, the crucial part of building networks is putting yourself out there, to be willing to do things that other people aren't doing I suppose. I guess if I could use an example, we've got a project going on at the moment with, I think it's a partnership with MLA and DAFF, where we're doing two parts.

Essentially, it's measuring grass versus timber growth. One part is a 5-hectare alley planting trial plot. That's really interesting. It's run by a guy from Argentina and that sort of agroforestry, or I think they call it silvopasture over there. It's pretty big. 22 rows of trees spaced 20 metres apart, and we're going to measure the grass timber growth, carbon biodiversity over the next five years.

Then the other part of the project is a thinning project. We have an area of regrowth out in one of our more native paddocks that we were able to clear essentially. It's only a small area in a fairly large rim paddock. But instead of doing that, we had the guys from DAFF came along and identified the genetically superior trees. Tagged them all. We'd gone around and thinned it. Put in PROOF pasture underneath. Then we'd left a controlled area of regrowth as well.

Again, they'll measure basically what would've happened if we left it alone versus what happened when we intervened again in terms of growth of timber pasture, carbon biodiversity, whatever other metrics they can slap at it. There's always something interesting going on. I think if you're prepared to challenge the norm, I suppose then there always seem to be plenty of people knocking on your door to help you.

Kirsten Diprose:

What's the benefits for you as a farmer of participating in these trials and partnering with organisations like Meat & Livestock Australia and DAFF, which is the Department of Agriculture, Fisheries and Forestry? What's in it for you?

Adam Coffey:

Oh gosh. I don't know. I think it's a nice way to live, to be honest. Who's not curious about what goes on around them? I think most landholders, that's what gets us out of bed is because we observe things every day, all day, every day. We see things out in nature on our places that intrigue us. It's challenging to try new things.

As I say, there's always support out there to help you do that. I don't know that it's any more than that. For us, it's a good way to live, be curious, to find out what's next.

Kirsten Diprose:

That's it for another episode of Innovation Ag. A big thank you to our guests, Adam Coffey from Coffey Cattle Co. Fiona Best, the CEO of Birchip Cropping Group. Emma Ayliffe, creator of Yacker and Christine Pitt, the founder and managing director of Farmers2Founders.

We'll bring you the extended interview with Christine in an upcoming feature episode where we dive deep into the world of startups and grants, particularly for AgTech ideas.

Our next episode is all about value adding. It's been criticised by some as a pipe dream, while others say it can open new opportunities for farming in Australia.

You can find the episode transcript on our website, vicdroughthub.org.au. Thank you for listening. This episode is written and hosted by me, Kirsten Diprose. Produced by Rachael Thompson. We have editorial input from scientists, academics and farming groups involved in the Victoria Drought and Innovation Hub.

This podcast is funded by the Australian Government's Future Drought Fund. I'll catch you next time.