Farmer interest in joint venture structures in the Australian broadacre grains sector

Abstract

There is a growing productivity gap between leading and average grain farms in Australia, driven by a combination of constraints that limit the adoption of innovations. Such constraints may be overcome by the adoption of organizational innovations, including collaborative structures such as joint venture (JV) arrangements. Given the predominance of the owner‐operator family farm model in the Australian grains sector, organizational innovations have largely been overlooked by the research and extension community. This paper examines business alliance formation in agriculture and farmer perceptions of, interest in, and barriers to participation in JV structures. A telephone survey of 573 Australian grain growers revealed that 3% of farmers had adopted a JV structure and that such farms were significantly more likely to have a larger crop area and be less diversified compared to nonadopters. Another 21% of farmers expressed an interest in adopting a JV structure in the future, particularly to reduce costs and improve productivity. A multinomial logit model showed that such farmers were significantly different for a number of sociodemographic variables including age and education, when compared to farmers not interested in adopting JV structures. To build on this basis of interest and motivation for innovative farm business structures, further understanding of perceived trade‐offs and preferences is needed to identify the most attractive JV designs. [EconLit Citation: Q13].