growing the premium produce sector - shire of …...this business case summarises the key operating...

[Type text]

Business Case for the Hub for Premium Produce

September 2018

Growing the Premium Produce Sector

Confidential

Hepburn Shire Hub for Premium Produce Business Case Version 1.3 final 2

Hepburn Shire Council (“Council”) has auspiced the production of this Business Case for the Hub for Premium Produce on behalf of the Central Highlands Regional Partnership. The production of the Business Case has been funded by the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) and Hepburn Shire Council. The Business Case has been prepared in response to the Central Highlands Regional Partnerships having identified the priority challenge of:

“The liveability and economic sustainability of our gourmet niche is at risk because we are failing to maximise our full economic potential.”

The Business Case has been developed by Advisian Consulting and guided by the Central Highlands Regional Partnerships Agriculture Working Group with significant input from the Technical Working Group.

The Project Control Group wish to acknowledge the work of the following people in the preparation of this Business Case: Technical Working Group members: Doug May- Captains Creek Organic Wines Tammi Jonas- Jonai Farms Adam Bremner- Wombat Forest Organics Edward Benedict- Adsum Farmhouse Fiona Briers- Vue de Vulcan Paul Righetti- Honest Eggs Danny Kinnear- Danny’s Farm Dick Koops- Country Cuisine Disclaimer This report has been prepared on behalf of and for the exclusive use of the Central Highlands Regional Partnership and Hepburn Shire Council, and is subject to and issued in accordance with the agreement between Hepburn Shire Council and Advisian. Advisian accepts no liability or responsibility whatsoever for it in respect of any use of or reliance upon this report by any third party. Copying this report without the permission of Hepburn Shire Council and Advisian is not permitted. Claimed on behalf of Advisian by Nadia Jaworski, Principal, Social Infrastructure ([email protected])

Cover: Sharon Flynn The Fermentary, Daylesford, Hepburn Shire

Real, live probiotic naturally fermented products

We are bacteria farmers. Makers of delicious wild fermented food and drink that’s good in your mouth and even better for your gut. We don’t use starter cultures- we do it the authentic and traditional way, which is why it still tastes home made. A slow and an exacting mix of ingredients resulting in a beautiful finish- sour, sweet, salty, sometimes spicy, often fizzy or crunchy but always health giving and memorable.

mailto:[email protected]

Confidential


Table of Contents

Executive summary .......................................................................................... 5

Part 1 PPEs in the Hepburn Shire ..................................................................... 7

1.1 Broader contextual influences....................................................................................7 1.1.1 Social and environmental characteristics ..................................................... 8 1.1.2 Characteristics of agricultural and food processing businesses ...................... 9 1.1.3 Characteristics of the agricultural and food processing workforce ............... 12 1.1.4 Government and Private-sector Initiatives ................................................. 15 1.1.5 Lessons from other locations .................................................................... 17 1.1.6 Key points of relevance to understanding the PPE sector............................ 18

1.2 Characteristics of PPEs in the Hepburn Shire ............................................................. 18 1.2.1 Data collection ......................................................................................... 20 1.2.2 Approach to analysis ................................................................................ 21 1.2.3 Stages of business development ............................................................... 22 1.2.4 Diversity of products and pathways to market ........................................... 23 1.2.5 Perceived barriers for PPEs & Conventional Agricultural businesses ............ 25 1.2.6 Difference in perceived barriers between livestock and horticulture .......... 27 1.2.7 Support accessed by PPEs ......................................................................... 28

1.3 Summary of PPE findings ......................................................................................... 29 1.4 Key challenges facing the PPE Sector ........................................................................ 30

Part 2 Problem ............................................................................................... 33

2.1 Definition of the problem ........................................................................................ 33 2.2 Evidence of the problem.......................................................................................... 35 2.3 Timing considerations ............................................................................................. 38 2.4 Consideration of the broader context ....................................................................... 39

Part 3 Benefits ............................................................................................... 40

3.1 Benefits to be delivered........................................................................................... 40 3.2 Importance of the benefits to Government............................................................... 43 3.3 Evidence of benefit delivery ..................................................................................... 44 3.4 Interdependencies .................................................................................................. 47

Part 4 Strategic response............................................................................... 48

4.1 Method and criteria ................................................................................................ 48 4.1.1 Overview ................................................................................................. 48 4.1.2 Lessons from other programs ................................................................... 48

4.2 Strategic options analysis......................................................................................... 49 4.2.1 Strategic interventions ............................................................................. 49 4.2.2 Strategic responses .................................................................................. 50 4.2.3 Assessment of strategic responses and interventions ................................. 51 4.2.4 Ranking of strategic options...................................................................... 53

4.2.5 Recommended strategic option ............................................................................... 54

Confidential


Part 5 Solution................................................................................................ 55

5.1 Solution options considered..................................................................................... 55 5.2 Details of the recommended solution ....................................................................... 57 5.3 Cost estimates ........................................................................................................ 58

5.3.1 Resources ................................................................................................ 59 5.3.2 Funding options ....................................................................................... 59

5.4 Program implementation strategy............................................................................ 60 5.5 Stakeholders ........................................................................................................... 60 5.6 Risk management.................................................................................................... 61 5.7 Governance structure .............................................................................................. 62 5.8 Program development and delivery.......................................................................... 63

5.8.1 Timelines ................................................................................................. 64 5.8.2 Next steps ............................................................................................... 64

Appendix A – Methodology and timeframe.................................................... 65

Methodology Overview ........................................................................................ 65 Engagement Strategy overview ............................................................................ 65

Appendix B - Lessons from other locations..................................................... 68

Food clusters ....................................................................................................... 68 Food hubs ........................................................................................................... 68 Specific programs or support mechanisms ............................................................ 69 Government enabling programs ........................................................................... 70

Appendix C - Background consultation from Central Highlands Regional Partnership.......................................................................................... 72

Appendix D: Investment logic map and concept brief .................................... 75

Appendix E – PPE Networks, Associations and Accreditations ........................ 78

Hazard Analysis & Critical Control Points (HACCP) Accreditation: ............................ 79 Meat & Livestock Australia (MLA) Livestock Production Assurance (LPA): ................ 80

Appendix F - References ................................................................................. 82

Appendix G – Online Survey questions ........................................................... 84

Appendix H – Collated Survey findings ........................................................... 93

Confidential


Executive summary

Hepburn Shire and the broader Central Highlands region of Victoria comprise one of Victoria’s important food-bowls. Within this region, there are an increasing number of food producers and processors that operate at a smaller scale, using lower impact farming methods and/or processing food using artisan techniques. The farmers and processers who operate in this manner are referred to in this business case as Premium Produce Enterprises (PPEs).

The Hepburn PPEs make an important contribution to the regional economy and add significantly to the social richness of the Shire. They also tend to play an important role in providing resilience to Victoria’s food industry, including mitigating the environmental effects of more conventional farming techniques, an approach which will become increasingly important to the sustainability of farming.

Despite this, a range of barriers are preventing the PPE sector from meeting its full potential. Competing land use pressures, complex regulatory frameworks, and challenges accessing finance, value adding infrastructure and appropriate business services are limiting opportunities for PPEs to focus on their business strategy growth. This, in turn, is constraining their capacity to expand as a sector.

A range of options were assessed to address these issues, including (but not limited to) a commercial financial focus to connect private funding to PPEs, and an industry-led collaboration focus targeted at empowering existing networks to implement an action plan to sector resilience.

From this analysis, a preferred solution has been developed:

A localised program focused on connecting and actively working with the PPEs in Hepburn Shire to navigate processes, unlock opportunities, and build the ongoing capacity and skills of the PPE sector to collectively grow and thrive.

This program will provide a clear point of contact between industry, government, and private sector interests. Management arrangements may include industry body, local government, state government, or others as agreed with the funding source. The program itself will be developed and delivered in collaboration with the local industry. It will require resources for the employment of one EFT position, in addition to an operating budget.

The specific details of the proposed program will be developed with the input of a PPE Industry reference group, to be formed following confirmation of successful establishment funding. The program is anticipated to run for a three-year period. This program will seek to achieve the following:

• Mitigate the existing problems and barriers impacting the Hepburn PPE sector

• Improve coordination both within the PPE sector and between the PPE sector and local government

• Increase resilience for the agricultural food sector more broadly

• Improve the strength of Hepburn Shire and the Central Highland’s Region

• Ability to test a greater level of innovation within the PPE sector.

Confidential


The program will comprise a range of components to directly assist the industry, including:

• Navigating through regulatory processes

• Collecting, collating and disseminating information

• Analysing data, information, and reaching agreed solutions

• Facilitating industry networking opportunities

• Advocating on behalf of industry to government.

The projected costs involved for the delivery of this proposed project total $710,000 over a three-year period. This involves an initial set-up cost of $35,000, the annual salary of $111,000 (including on-costs)for the officer, and an operational budget of $114,000 per annum. The preferred solution proposes establishment funding for a PPE sector support officer in Hepburn Shire for three years. For details, please refer to Part Five of this Business Case.

FoodPrint Melbourne has identified the increasing pressures on food supply and the decreasing availability of land for agricultural purposes due to urban expansion. Given Hepburn Shire’s location on Melbourne’s periphery and its attractiveness as a destination for those seeking a lifestyle change, swift action to ensure the continued viability of the local conventional agriculture and PPE sectors is vital. Government intervention via funding is required within the next six months in order to most effectively deliver the benefits and address the problems identified in this Business Case.

A governance structure for this project will need to be established and implemented. This will consist of a suitably authorised registered body to provide oversight and have responsibility for employment, funding and reporting requirements. The development of the more detailed work plan will be guided by a program development committee, proposed to include representatives from Hepburn PPEs, relevant government and regulatory bodies and community members.

The solution proposed within this business case has been developed through the discipline of preparing an Investment Logic Map and Benefit Management Plan in conjunction with PPE industry representatives, Hepburn Shire representatives and with the oversight of the Central Highlands Regional Partnership working group. It draws on referenced research and primary data regarding the Hepburn Premium Produce Enterprises (reference material contained in the Appendices).

Confidential


Part 1 PPEs in the Hepburn Shire

1.1 Broader contextual influences

This business case summarises the key operating environment for the PPE sector in terms of environmental and social considerations, the broader industry sectors of which the PPEs form a part, current government initiatives and support measures, and lessons that can be learnt from other locations.

This contextual review was undertaken to better understand some of the external factors influencing the characteristics, aspirations and barriers of the Hepburn Shire PPE sector. This review showed:

The overall importance of agriculture and processing within the Shire and Central Highlands region, both economically and socially, as an attribute that brings focus and community cohesion.

The increasingly important role that PPEs play within the agriculture, food and fibre processing sectors in the region by providing greater resilience to the agriculture, food and fibre sectors through diversification.

The support and priority that can be provided by all levels of government to better support this sector to grow and thrive.

Examples from food sector projects and approaches throughout Australia and internationally provide potential approaches which can be applied within the Hepburn Shire, and ultimately, the broader region.

These considerations show the economic and social importance of supporting the industry development of the PPEs as a sector.

Premium Produce Enterprises (PPEs) form a sub-sector of the broader agricultural and food processing sectors in the Shire. It is noted that although the dominant food system in western countries is industrial (emphasising mechanized production, capital intensive rather than labour intensive production, processing and distribution methods)1, other food production systems also exist and are becoming highly valued.

A specialist sub-set of producers, processors, distributors and consumers are increasingly focusing on non-industrialised processes. They are making and seeking food that is grown or produced in a way that includes at least some the following attributes:

Products are grown, processed and/or prepared locally, with their providence clearly identified.

Use traditional processes or ‘authentic’ techniques for on-farm production and processing.

Focus on delivering positive environmental and/or social outcomes.

Use more localised distribution approaches than other types of agriculture, often with fewer intermediaries between the producers, processors and the end consumer.

Generally, operate at a smaller scale, both in terms of acreage and business size.

1 La Trobe University, Bendigo, 2010

Confidential


There are several terms which may be used to describe this approach to food production and processing. Some terms include ‘artisanal production’, ‘localised food sources’, or ‘premium produce’. For the purpose of this report, when referring to Premium Produce Enterprises, the elements listed above form part of the consideration.

This chapter addresses some of the key contextual considerations, to enable better understanding of the research and findings for PPEs in the Hepburn Shire.

1.1.1 Social and environmental characteristics

The Central Highlands region comprises six municipalities within Central West Victoria: Ararat Rural City, City of Ballarat, Golden Plains Shire, Hepburn Shire, Moorabool Shire, and Pyrenees Shire. The region is anchored by the regional city of Ballarat as the major urban centre and the location where most of the larger scale manufacturing occurs.2

Hepburn Shire, as well as the broader region, is well suited to agricultural production, and food processing. Research undertaken by Deakin University found the Central Highlands region had the potential to increase its agricultural production due to a biophysical environment (climate, soil and topography) being highly suited to sustaining a productive agricultural sector even in the face of a changing climate3. Given these attributes, the existing agricultural sector has the potential to play an increasing role as part of the national food bowl, especially considering growing pressures on Victoria’s agricultural sector from peri-urban expansion into other agricultural areas closer to Melbourne and Geelong4.

Hepburn Shire is characterised by a mixture of rural land, forest, and small townships. It is about 90 minutes by road from Melbourne and has good connecting roads to major regional towns that can service tourism and movement of produce and processed product. The Shire is well known as a ‘wellness’ destination, according to research undertaken on behalf of the Daylesford Macedon Regional Tourism board, and there is a growing awareness of the quality of produce from this region. 5 The Shire also has strong, established and diverse culinary industries that contribute to its reputation as a destination for good health.

Around 15,330 people live within Hepburn Shire, and 186,500 people live in the Central Highlands region6. The people living in the Central Highlands region are more likely to have attained a tertiary level of education than in other parts of Victoria. The State Government predicts that the Shire’s population will grow by around 1,500 people over the next 15 years.

Notably, the average age of people living in the Shire is 50 (37 years for Victoria) with almost 25% aged over 65. The proportion of Hepburn Shire residents over 65 years of age is projected to further increase significantly over the next 10 – 15 years, as shown in Figure 1. The current employment

2 REMPLAN, 2018 3 Centre for Regional and Rural Futures, Deakin University, 2016

4 City of Greater Geelong, 2018

5 Colmar Brunton, 2015 6 Australian Bureau of Statistics, 2016

Research undertaken by Deakin University found the Central Highlands region had the potential to increase its agricultural production due to a biophysical environment (climate, soil and topography) being highly suited to sustaining a productive agricultural sector even in the face of a changing climate.

Confidential


participation rate of 58.5% is notably lower than the state average (64.8%). However, unemployment rates are not significantly different than the state average7. This combination appears to align with the age profile, and is likely to be due, in part, to the increased numbers of people moving to the Shire for lifestyle reasons.

Figure 1: Population by broad age groups, 2011 and 2031

Source: Victoria in Future 2016

These environmental and social characteristics are relevant to the PPE sector for the following reasons:

The highly productive soil and climatic conditions lend the region to being well resourced to grow high value produce.

Close proximity to Melbourne, and the presence of good road network to Melbourne and the Melbourne Airport means the region is well positioned to attract visitors for agri-tourism, and transport produce and processed products to major markets and transport hubs.

Potentially, the shift and growth of the lifestyle cohort could lead to an increased the local market for products (which currently accounts for a large proportion of local expenditure, so this would continue and enhance an existing trend).

Increasing population in the Shire may contribute to increasing land prices, particularly if the land is allowed to be used for non-agricultural purposes.

Changing demographics to an older population could affect the availability of labour, however the higher educational attainment indicates that residents are open to learning.

1.1.2 Characteristics of agricultural and food processing businesses

Agriculture and food processing plays a major role in the economy of the region – ranked fourth for Gross Regional Product and as an employer. The region is dominated by mixed farming enterprises,

7 DELWP, 2017

Confidential


which include broadacre grain production (wheat, barley, oats, canola) predominantly rotated with pastures grown for beef, and/or sheep and wool production.

Regionally, agricultural production has an estimated value of $1 Billion annually, and food processing is estimated to be worth $1.5 Billion annually. The three largest commodity groups for agricultural production are chicken meat, sheep/wool, and grains. However, they only account for 68% of total agricultural production in the region, The remaining 32% is comprised of a diverse range of produce including milk, fruit and vegetables, specialist meats, and other specialised produce such as turf (Figure 2)8. The diversity of produce is complemented by a growing occurrence of food processing, and growth in agri-tourism9.

Most farms that participated in the 2015/2016 census in the region operate within business models that would be described as ‘conventional farming’. That is, mixed cropping – livestock enterprises, using various input to produce bulk commodities destined for export or domestic markets outside the region as a raw product.

Whilst it is reasonably straightforward to isolate high value or specialist produce such as goat meat, fruits, turf, or certified seed from the census data, it is impossible to determine which produce could be considered premium based on production method. That is, the census does not collate those farms using non-conventional farming practices that command a premium in the market such as organic, biodynamic, free range or hormone-free. Small businesses (under $40,000 income) are also not captured in this data, or business that include primary production but do not identify as primary producers. These types of small specialist businesses known to be in the Shire include produce such as truffle and honey. The income limit also results in emerging producers being excluded.

Figure 2: Diversity of agricultural produce in Central Highlands region (2015/2016)

The outcome of these limitations is that the amount of produce that should be captured as part of the premium produce sector in the census is highly likely to be underestimated. Given available data and analysis by Agriculture Victoria, it is estimated that premium producers account for at least 16% ($156M) of agricultural production in the Central Highlands region and up to (25%) $251M,

8 Agriculture Victoria, 2018

9 McKinna et al , 2016

Confidential


depending on farming practices. The real value is likely to be higher as smaller businesses are not captured in the census data. Also the additional value to premium produce through food processing or agritourism, or the secondary benefits to the local economy is not factored in.

Agriculture is one of the strongest sectors within Hepburn Shire. It generates approximately 12.2% of Gross Revenue Product, which is equivalent to $138M annually (Figure 3). These industries also provide local expenditure within the region valued at $42.5M annually (Figure 4).10

Direct value-adding through food manufacturing was worth around 25% of agricultural production in the Hepburn Shire in 2009/2010 (Figure 5). This would translate into food and beverage manufacturing in the Hepburn Shire being worth about $35M in 2015/2016, with added potential for produce from the Hepburn Shire to be processed in the City of Ballarat where there are already large and medium scale food processing businesses with national and international markets.

The 2015/16 Agricultural Census collated advice from 243 Hepburn Shire businesses on the performance of their agricultural businesses. The majority of businesses operate within businesses most likely to be described as ‘conventional farming’ (sheep, lamb, hay, cattle and broad hectare crops).

Figure 3: Agricultural Sectors by Output – Hepburn Shire (source: REMPLAN)

Based on advice from Agriculture Victoria, the following industry subsectors are most likely to be operated as PPEs:

Vegetables for human consumption

Livestock slaughtered (pigs, goats and other less conventional meat products)

Fruits and nuts

Nurseries

Wine production

Specialised broadacre crops (eg pulses, maize and sorghum grain).

Due to data limitations, further analysis regarding the characteristics and scale of each industry subsector (for instance, number of businesses relating to each industry subsector, average turnover per business type, and so on) cannot be analysed.

10 REMPLAN, 2018

01020304050607080

Sheep,Grains, Beef

& DairyCattle

OtherAgriculture

Poultry &Other

Livestock

Agriculture,Forestry &

FishingSupport

Forestry &Logging

Fishing,Hunting &Trapping

Aquaculture

$M

Confidential


Figure 4: Agricultural Sectors by Local Expenditure – Hepburn Shire (source: REMPLAN)

This data points to growth opportunities, for instance, potential use of ‘seconds’ quality primary food, supplementary processing, and use of skills in processing that are emerging. It is also consistent with the challenges of accessing value add infrastructure and labour, as identified by the Hepburn PPEs in workshops and within the responses to the on-line survey.

Figure 5: Value of primary production, food & beverage manufacturing in the Central Highlands (09/10)11

1.1.3 Characteristics of the agricultural and food processing workforce

Previous research by REMPLAN found that of the 4,825 people employed in Hepburn Shire, 490 were employed within the ‘Agriculture, Forestry and Fishing’ sector12. This represents 10.16% of the total

11 McKinna et al, 2016

0

5

10

15

20

25

30

Sheep,Grains, Beef

& DairyCattle

OtherAgriculture

Poultry &Other

Livestock

Agriculture,Forestry &

FishingSupport

Forestry &Logging

Fishing,Hunting &Trapping

Aquaculture

$M

Confidential


working population within the Shire. In addition, there are about 772 jobs in ‘Accommodation and Food Services’13. This is of relevance given the region is well known for its paddock to plate culinary services.

An analysis of ABS data indicates that 145 people are employed in food processing enterprises within Hepburn Shire14. According to a 2010 study commissioned by VicHealth that assessed local food production in several Victorian municipalities, including Hepburn Shire, there is a clear link between food processing and agricultural employment in this Shire that sets it apart from other areas15.

Around 27.5% of agricultural and food processing workers are aged between 65-74 years in Hepburn Shire. This is not uncommon for agriculture as the sector typically has an older workforce than other sectors throughout Victoria. This is a significantly higher proportion of older workers than employed across the broader Hepburn economy (with around 6.5% falling in this age bracket). It is assumed that this is due to fewer people employed in agriculture retiring, relatively low numbers of young people entering the sector, as well as a natural age progression of the workforce16.

Figure 6: Employment by sector in Hepburn Shire

(Based on ABS data, 2016)

However, there has been an increase in the number of people between 15-24 years of age working within the agricultural sector, albeit from a low base. The proportions within the middle bracket are relatively low, compared with the state average, however the overall numbers are increasing.

Anecdotally, from comments made in the project’s Technical Working Group sessions, a contributing factor is the interest from people in pursuing new career pathways into artisanal agriculture in order

12 REMPLAN, 2018

13 REMPLAN, 2018

14 Australian Bureau of Statistics, 2016

15 La Trobe University, Bendigo, 2010 16 REMPLAN, 2018

Confidential


to achieve more tangible outcomes from this sector than from the work they may have originally trained in or performed.

Anecdotal evidence from the Project Control Group also points to the average age of participants at events for artisan agriculture, such as those attending workshops for Agriculture Victoria’s Artisan Agriculture and Premium Food Program, being younger than the average age of farmers attending events aimed at conventional agriculture. There also seems to be a gender difference with events for conventional farmers being dominated by men whereas events for artisanal producers have greater gender balance.

Figures 7 and 8 contain data relating to the turnover of farm businesses within Hepburn Shire and other municipalities assessed. The findings in 2006 were that over 50 percent of Hepburn Shire farm businesses had an annual turnover of less than $75,000. Between 1996 and 2006, the number of farm businesses had increased from around 275 to slightly less than 350, and the proportion of businesses within this lower turnover bracket had also increased. This information suggests the businesses are operating at a smaller scale, and the operators may either require supplementary incomes or do not operate with the motivation of being a sole source of income.

Figure 7: Farm Businesses by Estimated Value of Agricultural Output (Turnover), 2006 (source: La Trobe University, Bendigo, 2010)

There seems to be a gender difference with events for conventional farmers being dominated by men whereas events for artisanal producers have greater gender balance.

Confidential


Figure 8: Farm Businesses by Estimated Value of Agricultural Output (Turnover), 1996 -2006 (source: La Trobe University, Bendigo, 2010)

1.1.4 Government and Private-sector Initiatives

The strength of a diverse agriculture sector is being recognised in all levels of government through current programs, initiative and investments that directly benefit the Central Highlands region.

Most relevant is the Artisanal Agriculture and Premium Food project announced through the 2018 May budget. The $2M program will include an Industry Development Plan for the artisanal agriculture and premium food sector in Victoria, a grants program to support business growth and investment in the sector and biosecurity and industry support services tailored to the needs of the sector17.

In parallel with this business case, a feasibility study for an Institute of Gastronomy & Good Food was completed in August 2018. The Institute would be located within the Hepburn Shire. The Institute of Gastronomy/ Good Food will establish a knowledge hub and network of premium and artisans producers, and deliver a world-class program to create a highly skilled and specialist culinary workforce, attract and grow investment in the good food industry, and in the Hepburn Shire. . It will deliver this through first-class culinary training via world-renowned training provider, William Angliss Institute as the registered training provider to enhance collaboration and drive an immersive approach to training highly skilled professionals.

There is also a commitment from the six Central Highland’s councils, in partnership with Regional Development Victoria and Regional Development Australia, to grow and strengthen the agriculture industry. This include recognising and strengthening its diverse sectors with different municipalities playing complementary roles, including Golden Plains Shire’s 4,000-hectare food production precinct, and Ballarat West Employment Zone in City of Ballarat.


Confidential


Key strategies that underpin these specific programs include:

The Agriculture Victoria Strategy, which includes priorities around capability and innovation development, seeking to make the sector stronger and more creative, in order to address its full potential, including its importance to Victorian economy and rural and regional prosperity.18,

The Regional Jobs and Infrastructure Fund (RJIF) is a $500 million-dollar commitment intended to grow jobs, build infrastructure and strengthen communities throughout regional Victoria.19 The fund comprises three priority programs (The Regional Infrastructure Fund, The Regional Jobs Fund and The Stronger Regional Communities Plan) all of which have elements of relevance to this business case:

Strategic investment in the Good Food Industry through the Food Source Victoria program and private investment aligns with several goals identified in the 2015 Victorian Food and Fibre Sector Strategy including encouraging innovation and building investment readiness, equipping industry businesses with the tools and means to innovate, and capturing market opportunities to maximise the potential for growth20

The Victorian Visitor Economy Strategy 2016 is focused on further developing the attributes that make Victoria attractive to visitors, including visitors to rural Victoria. It recognizes that people visit not only for ‘traditional sightseeing, but also for conferences and major events, arts and culture, business and study. Further measures are needed to build on the potential of rural Victoria, including attracting more private sector investment, the need to build on the unique visitor experience to rural Victoria through new forms of educational tourism that could be provided within rural and regional areas, and the importance of a skilled and capable sector to meet tourist needs.

Several recent Commonwealth and Victorian Government programs support innovation and diversity in agriculture but may be challenging for PPEs to access due eligibility criteria. Other programs show approaches which government could use if targeted towards the PPEs. These programs include:

The Commonwealth Government funded ‘Farming Together’ (Farm Co-operatives and Collaboration Pilot Program) funding program designed to encourage collaboration between farming groups with the aim of providing farmers, fishers and foresters with knowledge, skills and materials on collaborative ideas, co-operative structures and collective strategies. The $15M pilot program finished in May, but the Federal Government indicates they will build on this process.

The recent ‘Food voucher’ program as part of the Victorian Food Innovation Network, providing for up to $50,000 to ‘prepare for and attract investment’, up to $10,000 for early stage feasibility and testing, and up to $50,000 for process innovation, product development and research and development, to access facilities, services, advice or expertise from Registered Service Providers such as universities and other research & development organisations.

The Cooperative Research Centre for Food Agility, an innovation hub with connections to Federation University Australia in Ballarat that’s aim is to bring research organisations, government, private business and innovators together to create new digital technologies that benefit the Australian agrifood industry.

The Victorian Government announcement of a Community Sports Infrastructure Loans Scheme (providing access to government guaranteed loans between $500,000 and $10 million at


19 Department of Economic Development, Jobs, Transport and Resources, 2017

20 Department of Economic Development, Jobs, Transport and Resources, 2016

Confidential


significantly reduced interest rates) – potentially a similar approach could be considered for PPE industry support.

1.1.5 Lessons from other locations

There are other regions in Australia and overseas that are also known for producing high quality food products and exemplary culinary experiences. Similarly, to the objective of this piece of work, some of these regions have recognised that they needed to support their food-based businesses that are not adequately supported by commodity-based programs, agencies or farmer groups.

Different regions have taken different approaches. Some have focused on targeting specific issues where measurable improvements could be made, others have been based on building partnerships and creating enabling environments where solutions could be mutually identified. Some have taken a directive, leadership approach, often through a government agency or with a leading industry partner, while others have developed through a ground-up approach.

The common feature with these types of programs or groups is that they focus on the businesses common attributes and / or problems. There are several models that the Hepburn Shire can draw learnings from, which are listed below.

Food hubs – this model provides locations and networks where producers, processors, wholesalers, consumers can meet and collaborate. Food Hubs focus on efficiencies and cost saving through collaborative distribution, and wholesaling / marketing approaches. One hub operates in Victoria (Casey). Hubs are also being considered in Wangaratta and Bendigo.

Food clusters – this model is geographically-based and driven by industry through established and larger scale businesses. Some groups focus on a particular type of niche product (e.g. fermented foods). They tend to address a range of issues and opportunities that are challenging the businesses through taking a collaborative approach and using high-level networks.

Food Innovation Australia Limited (FIAL) provided support for a number of food clusters in mid-2018. It defines food clusters as:

‘A group of businesses, government agencies, research and associated organisations in a defined geographic area that are interconnected and share a common purpose or interest where each contribute to enhance the innovation, growth and competitiveness of both the region and businesses’

Creating an enabling environment – this can be undertaken at a state or local government level, through establishing a framework in which local parties can contribute and help shape the agenda. This model is being practiced by Mornington Peninsula and Whittlesea Councils. The model relies on links with local producers to achieve growth in the on-farm agribusiness sector by addressing a diverse range of challenges to local businesses.

Alternatively, it could be led by industry or other interested parties such as research institutes. One example is the Michigan Good Food Initiative drive by three organizations – Michigan State University Center [sic] for Regional Food Systems, the Food Bank Council of Michigan, and Michigan Food Policy Council. These organisations came together to map out a framework, involve key parties, and reach commitment to achieve agreed goals through following common principles and actions.

Issue based approaches - This approach aims to address issues that are particularly challenging for a group of businesses.

Issues can be addressed at a broad scale, for example the state-wide approach take in Western Australia which focuses largely on the marketing and distribution challenges for premium foods businesses, particularly those targeting overseas markets. They can be more localised, based on

Confidential


the size of the issues. Programs which focus on regulatory reforms, or access to finance, are other examples

Further details of these models are provided in Appendix B.

1.1.6 Key points of relevance to understanding the PPE sector

The context detailed above enables a better understanding the external factors that are influencing the growth and development of PPEs in the Hepburn Shire, as well as providing basic current information about the size, composition, diversity and economic value of PPEs within the Shire. The key points identified are:

Hepburn Shire and the Central Highlands region more generally has a sound environment and infrastructure basis for pursuing growth in the PPE sector. The region has a wealth of natural resources, is well connected to markets in Melbourne, and is an established centre for high value produce and agri-tourism.

Socially the region has the advantage of having a highly educated and growing population. However, there are challenges in Hepburn Shire with an older demographic and people moving to the Shire to pursue rural living rather than farming.

Agriculture and food processing are an established, diverse and economically important part of the region and the Shire. The PPE sector is ill-defined and poorly captured in census data but is a sizable part of Shire’s economy and landscape.

The PPEs have the potential to play an increasingly important role within the agriculture and food processing sectors. The characteristics of PPEs, in particularly their diversity and their ability to operate at a smaller scale, lend themselves to a changing physical environment and help support an agricultural sector that is more resilient to economic structural changes.

Recent and current advent of several programs at all levels of government show there is recognition of the PPE sector and an appetite to provide supportive policies, programs, and services.

Both government and private support for sectors that are similar to the PPEs in Hepburn Shire is evident in other regions and countries. These models can serve as a guide of the type of supportive structure that may help the growth and develop of these PPEs.

A number of factors back up the value in supporting the development of the PPE sector. To do so, more detailed knowledge was needed to better understand the PPEs’ specific characteristics, business profiles and needs. The survey analysed in the followed chapter was undertaken to garner that local knowledge.

1.2 Characteristics of PPEs in the Hepburn Shire

The characteristics of the PPEs in Victoria are not well understood, as they do not form an industry group that is measured by ABS, ABARE or any other formal means of census. They represent a diverse group that is linked by factors other than the traditional groupings that are based on commodities, products, production methods, or approaches to distribution of product.

Reporting on the size, composition and economic value of this sector has therefore require data to be drawn from several sources, extracted from traditional groupings with consideration given to the local prevalence of bulk commodities. Given the data limitations, there is estimated to be at least

Confidential


630 farm businesses in the Central Highlands Region, representing between 16% and 25%, of the region’s $1 Billon of agricultural production.

These businesses’ estimated value to the local economy is conservative as it does not include value added to produce through food processing or agritourism, or secondary benefits to the local economy. When based on commodity groups these businesses have tended to go unnoticed, however, when grouped based on their other commonalities, they form a significant part of the agricultural landscape.

PPEs may not be recognised as a distinct group in census data however they can be grouped through sharing many other attributes that were identified for this report through local consultation including a survey, workshops, and interviews. Those commonalities include:

Products are grown, processed and/or prepared locally, with their providence clearly identified.

PPEs use traditional processes or ‘authentic’ techniques for on-farm production and processing.

There is a greater focus on delivering positive environmental and/or social outcomes.

They use more localised distribution approaches than other types of agriculture businesses, often with fewer intermediaries between the producers, processors and the end consumer.

Generally, PPEs operate at a smaller scale, both in terms of acreage and business size, than other forms of agricultural or food processing businesses.

Local consultation with self-identified PPEs has resulted in a clearer understanding of the unique aspects of the PPE sector in the Hepburn Shire including:

PPEs commonly produce more than one produce, and their businesses are multifaceted covering production, processing and marketing of the final product.

Over 46% of the PPE segment identified themselves as being engaged in some form of value adding process, a significantly higher percentage than those operating in more conventional practices. In addition, they tend to operate collaboratively with counterparts either locally or across Victoria to create value-added products utilising premium produce. This direct, informal engagement was seen as a way for PPEs to potentially generate revenue, grow their brand and provide the local market with high quality, high value products.

The tendency for PPEs to be virtually integrated (i.e. produce, processing, sales of final product) leads to them having to satisfy multiple regulatory bodies and standards.

The diversity of produce and processing approaches within the sector creates different needs. There are common features relating to how well established the businesses are, their distribution models, and aspirations.

PPEs display a diversity of aspirations; from growing turnover, size of operation, and the scale of their market, to focusing on diversifying, expanding the options availability, becoming more environmentally sustainable, and using some time to give back to the community.

PPEs are ambitious and they are likely to have more than a single aim for their business. This means that the approaches to support them need to recognise the different priorities under which they operate.

Aspirations of PPEs are broader than financial profit. The PPEs stated in their survey responses several aspirations such as a focus on improved food quality, restoring land conditions, building connections within the local community, and the overall health benefits which are created through these aspirations.

Confidential


As a general overview, the PPE business owners work long hours with relatively low incomes and limited access to external finance. They do not have a lot of disposable income to invest, however they display innovative approaches to use the capital they have and to raise new capital to develop their businesses. PPEs are willing to engage in local networks. This also applies in the form of support identified, with localised measures preferred.

Many food produce and processing businesses have operated within the Hepburn Shire over a number of years. There are, however, an increasing number of businesses operating in a way that differs from a more commodity based, market driven system of agriculture with smaller scale, lower impact farming methods and / or processing food using artisan techniques has become increasingly noticeable.

Within the Shire, and the broader Central Highlands Region, this growth in artisan processing is creating an informal hub of activity – described at the 2018 Central Highlands Regional Assembly as ‘a majority of minorities’.

As noted in Part Two of this report, PPEs have not previously been recognised as a distinct agricultural sector. Therefore a better understanding of the characteristics of these producers and their specific needs is required to design effectively support the PPE businesses. The following information was used to fill this gap:

Consultations undertaken by the Central Highlands Regional Partnership (see Appendix C)

Workshops and interviews with the Technical Working Group (see Appendix D)

A customised online survey designed to better understand the sector (see Appendices G and H)

Secondary research.

1.2.1 Data collection

The information regarding the PPE business profiles and needs has been derived primarily from the responses to the online survey, supplemented by the information gathered from the previous consultation and the information collected from the PPEs in the development of the business case.

The survey was designed to narrow the knowledge gap, by posing questions relating to the characteristics of each business, the challenges faced by each business, the options for supporting the different businesses, and the drivers for their businesses. The survey’s design allowed cross referencing between characteristics and responses. It contained a mix of closed and open questions to allow patterns to be identified, collect richer data, and point to elements which may warrant further investigation. It covered the breadth of business in terms of:

Basic business profile (acreage, incomes, employees)

Products and services

Production systems

Stage of business growth

Distribution and sales methods

Information sources

Business constraints

Support needs

Motivations and aspirations.

Confidential


The online survey was distributed through existing networks of the Shire and members of the Technical Working Group. The survey questions are contained in Appendix G and a collated set of results is contained in Appendix H.

1.2.2 Approach to analysis

A total of 46 responses were received by the closing date, representing nearly 20 percent of businesses in Hepburn Shire that were identified through the Australian Business Register, and identified as likely to be PPE’s based on guidance from Agriculture Victoria. Figure 9 identifies the range of business practices identified with the survey responses.

Given the focus for this survey is the PPEs, PPEs and “Conventional” agricultural enterprises were segregated using the results of Survey Question 2. This question required the respondents to self-identify their production methods. Respondents that nominated their approach as solely “Traditional farming measures” and/or “Conventional farming practices” were pooled into the “Conventional” data segment. Those business owners that identified with any of the alternative production options were pooled into the PPE data segment for analysis. Based on this assessment, responses were received on behalf of 28 PPE businesses and 18 conventional / traditional businesses.

Figure 9: Production methods

It’s notable that there was diversity of non-conventional farming practices. This exemplifies the diversity within the PPE sector, as can be seen from Figure 9. Some businesses had achieved formal accreditation for these non-conventional farming practices whilst others had no accreditation, were working towards accreditation, or considered they were ‘certified by the community’.

Segregating the respondents into the two groups enabled differences between the two sectors to be clearly identified. This approach allows the sector-specific needs of PPEs to be differentiated and helps ensure any support measures are effectively targeted.

In addition to the analysis regarding aspirations, methods, barriers and opportunities that comprises the balance of this chapter, it is worth drawing attention to two findings relating to PPEs and

Confidential


conventional / traditional farming businesses. Coupled with the following analysis, these responses add to our understanding of Hepburn Shire’s farming and food processing businesses.

Size and tenure - The majority of respondents provided advice regarding the size and tenure of their land holdings. Businesses classified as traditional / conventional practices operated on land holdings which were, with two exceptions, 20 hectares or above. The average land size identified was around 320 hectares with a mean, or midpoint, area of 90 hectares. While these may not be large holdings compared with other agricultural businesses across Australia, they were notably larger than the average stated for the PPEs.

The average land holding for PPEs was 53ha, and a sizeable number operated on less than 10ha. The mean, or midpoint, for land operations was 20 hectares. In addition, a number of PPE owners noted that they leased their land, rather than owned freehold title. This was not the case with the businesses categorized as conventional / traditional businesses, with the exception of larger properties who had leased some additional grazing land.

Employee numbers – From the survey responses, there was not a discernible difference in terms of employee numbers between the PPE businesses and the traditional / conventional production businesses. Most respondents said that they had 6 or less workers on-farm (including themselves).

1.2.3 Stages of business development

Most respondents were in the early or growth stages of their business: new entrant, developing or growth, as shown in Figure 10. Those who self-assessed as ‘established’ were generally planning to grow. This shows that there is a willingness within the Shire to invest in agriculture.

Figure 10: Stages of business development for respondents

Most respondents advised that their household had off farm income. Dependence on off-farm income (70% of respondents) is far higher than established conventional farmers such as mixed farming enterprises surveyed by Grains Research and Development Corporation (GRDC) where only

Confidential


20% of respondents said they had an off-farm income21. Supplementing on-farm income is to be expected given the average income for people working in the agriculture sector within the Hepburn Shire is around $45,500 (and $35,700 in the food and beverage sector) whilst average ordinary time earnings of all Australians is around $82,000. Further, people working in the Hepburn Shire in the development of an agri-business are working long hours22 averaging 38 hours in agricultural; sector, and 31 hours in the food and beverage sector.

There is clearly a focus on business development, for a range of reasons, identified within the set of aspirations within the survey. Those surveyed were asked where they saw themselves and their business in 5 years’ time. The majority of respondents identified a range of different goals, from growth in size – in terms of turn over, size of operation, the scale of their market – and others who were more focused on diversifying, expanding the options availability, freeing up more time for becoming more environmentally sustainable, giving back to the community and so on. In the vast majority of cases, they had clear aspirations that they were working towards.

1.2.4 Diversity of products and pathways to market

Figure 11: Products of PPEs and Conventional Enterprises

Figure 11 shows both the great diversity of products provided by agribusinesses in Hepburn Shire and the notable differences in the pathways to market of the PPE and “Conventional” respondents. Far more PPEs said they value adding to their produce or were engaged in direct sales to the public such as through restaurants, farmers markets or sales to local retailers.

21 Grains Research Development Corporation, 2017


Confidential


More than 60% of the “Conventional” segment engaged in some form of livestock production for consumption as meat, as opposed to less than 40% of the PPE segment. This concentration of “Conventional” on livestock production could also help explain why nearly 40% of “Conventional” enterprises engage in some form of hay and/or silage production while only 11.5% of PPEs engaged in the production of these products. Furthermore, 50% of the PPE segment was engaged in some form of horticulture, including the production of fruits, while less than 30% of the “Conventional” segment identified their business as producing horticultural foodstuffs.

Regarding value addition, over 46% of the PPE segment cohort identified themselves as being engaged in some form of value adding process. In stark contrast, only 5.6% of the “Conventional” segment identified themselves as being engaged in some form of value addition.

This is consistent with anecdotal input Advisian received from PPEs through stakeholder consultation. Several PPEs shared their experience of collaborating with a counterpart either locally or across Victoria to create value-added products utilising premium produce. This direct, informal engagement was seen as a way for PPEs to potentially generate revenue, grow their brand and provide the local market with high quality, high value products.

Almost 20% of those classified as the PPE segment identified as operating some form of restaurant, compared with only 5.6% of the “Conventional” segment.

Figure 12: Sales Methods of PPEs and Conventional Enterprises

Figure 12 contains a comparison of the sales methods of the two different segments of the data. It demonstrates that PPEs use a more diverse array of methods to sell their products than ‘conventional enterprises’. Furthermore, sales methods such as “Farmers markets”, “Internet”, “Farm gate” and “Local retailers” bypass conventional foodstuffs supply chains. This could be indicative of an emergent PPE business model. By selling products directly to consumers, PPEs are potentially able

Confidential


to consolidate value within their own enterprises by decreasing their involvement in supply chains. Furthermore, it is possible that these direct sales methods allow PPEs to better promote and leverage the perceived value of their products as ‘artisanal’, ‘gourmet’, ‘organic’, or locally produced.

A smaller percentage of PPEs utilised “Stock agents” and “Local saleyards”, however this could be due to the lack of PPE involvement in the trade of livestock for meat. It may indicate that PPE meat producers are also more likely to engage in their own processing than the “conventional” livestock farms.

Through responses to the survey, input within the workshops, or as noted within the websites of the PPEs themselves, it became clear that PPEs tend to be part of multiple networks. The following types of networks were identified:

Food Co-operatives and Collectives

Memberships – for representation, for training, for creating a bigger voice

Farmers’ markets, festivals and events, awards events

Direct supply arrangements to processors or restaurants (and vice versa – seconds / left overs can be used for a range of primary agricultural purposes)

Contribution to training – workshops and classes, from food production, processing to meal preparation, utilising local produce

Formalised collaborations, such as Daylesford Macedon Produce (DMP), a cross sector collaboration seeking to achieve a range of outcomes across the food industry

Associations established to support sustainable agribusiness development

Specialist food / processing networks (can be local, state, national or international)

These networks have been developed and expanded over time, in part due to the strength of a number of prominent, insightful and influential local business owners, industry representatives and key leaders within government and semi-government organisations. In addition, there are a number of informal networks, where a smaller or larger group of business owners and workers collaboratively operate through the sharing of equipment, assistance with deliveries, mutually beneficial arrangements to use second quality or unused produce, and so on.

These networks have been developed and expanded over time, in part due to the strength of a number of prominent, insightful and influential local business owners, industry representatives and key leaders within government and semi-government organisations. In addition, there are a number of informal networks, where a smaller or larger group of business owners and workers collaboratively operate through the sharing of equipment, assistance with deliveries, mutually beneficial arrangements to use second quality or unused produce, and so on.

A list of known networks within the Shire is contained within Appendix E.

1.2.5 Perceived barriers for PPEs & Conventional Agricultural businesses

For both the “PPE” and “Conventional” segments of the data “Capital costs required to expand” was identified as one of their top 3 concerns. However, the second most identified concern of the PPE segment is “Local, State and/or Commonwealth regulations”, in contrast to “Rising price of agricultural land” for the “Conventional” segment. Hypothetically, the concerns of the “PPE” and “Conventional” segments reflect differences in the operating models being utilised by these two groups.

Confidential


Figure 13 indicates that the barriers most concerning to the “Conventional” segment reflect pressures upon the development of economies of scale. Within conventional agricultural enterprises the standard method for improving profitability is to expand. The rising price of land and consequently the rising capital costs required to expand negatively affect the implementation of such a strategy. Therefore, the concerns of the “Conventional” segment reflect the concerns of those attempting to grow their businesses through typical market driven commercial practice.

Figure 13: Top 3 Perceived Barriers for PPEs and Conventional Enterprises

Potentially, PPEs perceive “Capital costs required to expand” as a barrier not because they intend to expand the scale of their agricultural holdings but instead because they wish to invest in value additive processes. This would then explain why “Capital costs required to expand” remains the most selected perceived barrier whereas only just over 15% of PPEs selected “Rising price of agricultural land” as one of their top 3 concerns.

The second and third most listed concerns of the PPE sector, “Local, State and/or Commonwealth regulations” and “Difficulty accessing food processing services such as commercial kitchens, abattoirs, etc.” respectively, are arguably the result of an emergent business model. The PPEs within the Technical Working Group have stated that they have encountered difficulty navigating regulatory requirements as the regulatory frameworks have been developed with large-scale convention

Confidential


production methods in mind. Furthermore, it is possible that the PPE sector have differing infrastructure requirements due to their operating models.

1.2.6 Difference in perceived barriers between raising livestock and the horticulture sectors

To better understand the perceived barriers of the PPE sector, we segmented the PPE sector according to their participation in either the raising of livestock for meat or horticulture. PPEs that were not involved in either or were involved in both enterprises were excluded from these two data subsets. It is important to note that the top 3 perceived barriers of these two data subsets differed significantly.

Figure 14 demonstrates that access to infrastructure, while undoubtedly important, is not a concern that is universally shared across the sector. The substantial diversity among PPEs regarding production methods, produce represented, and size of land plots, for example, understandably translates into a significant diversity in the problems they identify as constraining their business.

Figure 14: Top 3 Perceived Barriers for Livestock (meat) PPEs and Horticultural PPEs

Confidential


More than 50% of PPEs involved in the raising of livestock for meat listed “Capital costs required to expand”, “Local, State and/or Commonwealth regulations” and “Difficulty accessing food processing services such as commercial kitchens, abattoirs, etc.” in the top thee perceived barriers they faced.

Although a higher percentage of PPEs (roughly 63%) listed “Capital costs required to expand” as one of their top 3 concerns, only 27.3% and 9.1% of horticultural PPEs listed “Local, State and/or Commonwealth regulations” and “Difficulty accessing food processing services such as commercial kitchens, abattoirs, etc.” as one of their top 3 perceived barriers, respectively.

Instead, the horticultural PPEs identified ‘water availability’ as their second highest concern. While regulations ranked high, they did not rank it as highly as the PPEs raising livestock, instead identifying it as equally concerning as ‘difficulty improving productivity’.

It may be that on top of divergent infrastructure requirements, these differences in perception are based upon the differing business models of PPEs involved in the raising of livestock for meat and horticulture.

1.2.7 Support accessed by PPEs

Figure 15: Assistance Accessed in Previous 12 Months by PPEs and Conventional Enterprises

Confidential


Local, person-based assistance is an important element of the assistance accessed by both PPEs and “Conventional” agricultural enterprises, as shown in Figure 15. Approximately 73% of PPEs and 61% of “Conventional” enterprises stated they had received assistance from “Trusted individuals (neighbours, trusted expert, experienced farmer, etc.)” in the last 12 months.

However, beyond the most listed form of assistance there was a divergence in the assistance accessed by PPEs versus “Conventional” enterprises. Figure 16 breaks down the differences in terms of assistance accessed.

More than 50% of “Conventional” enterprises had accessed assistance from “Agricultural industry organisation(s) (VFF, Cultivate, Landcare, etc.) whereas only 43% of PPEs stated they had received assistance from these sources. There was even greater divergence regarding access to “State government services”, “Local community organisation(s) (Daylesford Macedon Tourism or similar.)”, “Local forums and workshops” and “Interstate or overseas experts”.

This suggests that PPEs are more likely than their conventional counterparts to tap into informal networks to receive assistance. While this could be in part due to an emerging PPE business model, stakeholder feedback and previous community engagement conducted by the Central Highlands Partnership suggests that a perceived lack of established avenues in which PPEs can pursue is a more significant factor.

Figure 16: Key Contrasts of Assistance Accessed in Previous 12 Months by PPEs and Conventional Enterprises

PPE “Conventional” enterprise

“State government services”

19.2% 50%

“Local community organisation(s) (DMT, etc.)”

26.9% 5.6%

“Local forums and workshops”

69.2% 33.3%

“Interstate or overseas experts”

42.3% 11.1%

This is backed up by the information regarding the number of networks that PPEs are part of, listed in Appendix E.

1.3 Summary of PPE findings The diversity of produce and processing approaches creates different needs. At one level, those

in the meat sector versus horticulture show different needs, however there are more subtle differences relating to how well-established the businesses are, their distribution models, and aspirations.

Confidential


The challenges PPEs face are notably different to conventional farming practices. Access to finance is an important component, some of this comes down to the scale of operation, the security of tenure (many do not own the properties on which they operate, for instance, and therefore have limited collateral to use). A different approach to accessing capital is needed. Some PPEs have innovated, using approaches such as CSAs and co-operatives, however these do not fully address the capital requirements needed.

PPEs display a diversity of aspirations, from growing turn over, size of operation, and the scale of their market, to a focus on diversifying, expanding the options availability, freeing up more time for becoming more environmentally sustainable, and giving back to the community.

PPEs are ambitious, and they are likely to have more than a single aim for their business. Their diversity means that the approaches to support them need to recognise the different priorities and agendas under which they operate.

As a general overview, the PPE business owners work long hours with relatively low incomes and limited access to external finance. They do not have a lot of disposable income to invest, however they display innovative approaches to use what they have to progress.

The importance of local networks was clearly apparent. This also applies in the form of support identified, with localised measures preferred.

The regulatory and support systems that do exist are not well suited for PPEs. Some examples include

• unsuitable business support (costly and non-aligned business support approaches)

• marketing approaches that are not well integrated to make the most of the collective impact of numerous small businesses),

• the lack of suitable subsidies and inappropriately scaled regulatory systems for small growers

• subsequent bureaucracy and paperwork such as the need for multiple food-selling permits across local government boundaries; and

• Seasonality of produce resulting in supply/demand issues.

1.4 Key challenges facing the PPE Sector

The business models and operating environments identified through engagement with PPEs for this report show that the challenges PPEs face are notably different to conventional farm businesses working to produce bulk commodities using conventional farming practices. Some of the challenges are experienced across the PPE sector whilst others are specific to PPEs specialising in particular products. Diversity of challenges both across and within businesses indicates that a holistic approach will be needed to overcome them.

The challenges raised include:

Competing land use pressures brought about through rising land prices, incompatible land uses and controls, and resource costs applying to agricultural land.

The direct costs and indirect costs (i.e. time) of meeting the demands of authorities for regulatory approvals and ongoing compliance.

A need for clear land use planning regimes to minimise conflict and to facilitate adaption to a more intensive farming approach instead of conventional broadacre farming.

Confidential


Identifying and sourcing assistance from all levels of government, including the challenge that financial assistance on offer does not fit the PPE’s business model or business scale.

Accessing all forms of finance though mainstream approaches due to small-scale or perceived risk.

A lack of support services from the private or public sector that can assist small-scale producers of specialist products with their diverse needs in areas such as logistics, compliance, business planning and financial management.

The risks and limited opportunities to value-add to the farmed produce. This includes the need for affordable and accessible supply chain infrastructure that will enable producers to value-add to their produce. This is exemplified by the current lack of slaughtering services within the Shire and in Victoria generally for small-scale livestock producers.

Lack of confidence amongst agribusinesses related to “collective marketing” and its benefits to the sector and to individual PPEs. This is hampering opportunities for effective regional branding and marketing strategies of agricultural products from the Shire and the Central Highlands region.

Through the collection of this information, a number of issues emerged relating to the challenges that face the PPE sector. In summary, these are:

Land use pressures - Family farm fundamentals no longer stack up, rising land prices, and incompatible controls, and resource costs, applying to agricultural land

The need to focus on high value products and consider opportunities to value add – and the need for affordable, accessible infrastructure to enable value adding to occur (including a lack of small scale animal slaughtering services within the Shire and in Victoria generally)

The potential opportunity for more effective marketing of agricultural products from the Shire and the Central Highlands region. Furthermore, it was noted that there is a lack confidence amongst agribusinesses related to “collective marketing” and its benefits to the sector and to individual PPEs

The costs and time consumed in regulatory approvals and ongoing compliance, and the need for clear land use planning regimes to minimise conflict and to facilitate adaption to a more intensive farming approach

Identifying opportunities that exist for government assistance, including the problem that the assistance often doesn’t meet the PPE’s business model or business scale

The challenges of accessing finance

The aspirations of PPEs which are broader than financial profit, and the challenges in aligning these

The diversity of operations, with often more than a single crop, or function, performed on the premises, creates challenges within a government-led system which seeks neat classifications in order to tailor support packages

A lack of business services available to small-scale agricultural operations. As was noted from different sources, logistics, business planning and financial management are areas where PPEs require support

Given Hepburn Shire’s location on Melbourne’s periphery and its attractiveness as a destination for those seeking a lifestyle change, swift action to ensure the continued viability of the local conventional agriculture and PPE sectors is vital.

Confidential


These issues provide a solid basis for understanding the challenges, or problems, to be addressed and the benefits which will derive from addressing them. The information regarding the approaches the PPEs currently use and the models in use within other locations are proving helpful in the preparation of a business case for the development of a model to deliver support services to assist the premium food industry.

This business case defines the sector and articulates the challenges to this sector solidifying and expanding for the benefit of the whole region. Understanding the characteristics, economic value, ambitions and challenges faced by this unique segment of agriculture in the region provides the platform for the business case.

The business case articulates the sector-specific problems and effective solutions, along with the benefits to the sector and the region, as follows.

Confidential


2. Part 2 Problem

2.1 Definition of the problem

One of the defining characteristics of Hepburn Shire is its diverse agricultural sector. A small but growing number of food, produce and processing businesses operate in a way that differs from the more conventional, commodity based, market driven systems of agriculture. These businesses tend to be smaller scale, using lower impact farming methods, less mechanised and/or processing food using artisanal techniques. They have become increasingly recognised as an important part of the agricultural sector. The farmers and processers who operate in this manner are referred to in this business case as Premium Produce Enterprises (PPEs).

Within Hepburn Shire, as in the broader Central Highlands Region of western Victoria, this approach to farming and processing is creating an informal hub of activity, described at the 2018 Central Highlands Regional Assembly as ‘a majority of minorities’. Given the identification of PPEs as a discrete sector has emerged only recently, background research was undertaken to better understanding the characteristics of the PPE sector, the hurdles and challenges they face and the most effective approaches to overcome them. This business case draws on research that is detailed in the accompanying Understanding the Premium Produce sector in Hepburn Shire report.

The prominence of PPEs in Central Highlands is higher than in other agricultural regions due to an ideal mix of resources, namely a diverse economy, resilient and rich natural resources, an agricultural workforce with higher than average levels of education, established connectivity with Melbourne and Geelong, and access to infrastructure and transport hubs. The number of PPEs is estimated to be at least 630 farm businesses in the Central Highlands Region, representing between 16% and 25% of the region’s $1 Billion of agricultural production.

Given the broader agricultural sector accounts for the biggest single sector of employment and income in the Hepburn Shire area23, supporting the diversity of the agricultural sector is critically important. PPE businesses are also embedded and active within their local communities. The produce that is generated by PPEs and the diverse experiences offered by many businesses, from farm visits, workshops, or farm to plate culinary experiences, add to the diversity of experience for visitors to Hepburn. PPEs also provide a richer community and cultural environment for those living within the Shire. In addition, they contribute to the broader economy of the region due to their value-adding activities in hospitality, education, and agri-tourism.

However, PPEs experience a range of challenges which differ from conventional farming practices. The issue of support requirements has been identified by the Central Highland Regional Partnership over a number of years, as well as by the individual Councils. Some of the issues relate to land use pressures, the costs and time consumed in regulatory approvals, ongoing compliance and access to finance. These issues are particularly acute for smaller operators. In addition, business services available to small-scale agricultural operations are limited, and inappropriately targeted ‘collective marketing and distribution’ marginalise the efficiencies of the sector. Due to the size of individual businesses and their diversity in terms of product range, approach, and business development stage, they do not tend to be well represented by existing agriculture or food industry groups such as Victorian Farmers Federation or Southern Farming Systems.

23 Australian Bureau of Statistics (2016) 2016 Census

Confidential


If this sector is to grow and thrive, there is a need to overcome the major problems and barriers that currently exist. Growth in this sector will create a range of benefits that flow, not only to the PPEs themselves, but to the region and the broader Victorian economy.

This Business Case has been prepared because of a need to address three key problems:

1. Increasing costs of agricultural land and labour and competing land uses are raising the barriers for existing and new Premium Produce Enterprises

Land that has been used, and zoned, for agricultural purposes is being increasingly valued for non-traditional uses. This includes people moving into the area motivated primarily by a desire for a rural lifestyle rather than to engage in commercial farming. This shift, combined with the increasing demand for agricultural land in light of peri-urban expansion, is causing the price of agricultural land to increase. In addition, the rising cost of agricultural labour is affecting the capabilities and capacities of agricultural enterprises24. These issues affect agricultural enterprises in different ways. The broader hectare farming practices are becoming less viable closer to larger urban regions or areas where land uses are changing. It is therefore important to ensure diversity across the agricultural sector and to maintain resilience within the sector. However, PPEs face more specific pressures. Their business scale or tenure means they have limited collateral to use. Many PPE farmers, for example, do not own the properties on which they operate. These pressures reduce the capacity of PPEs to operate effectively and bring uncertainty and risk into their business operations.

2. Scale inappropriate regulatory requirements and financial risk perceptions are threatening the

viability of Premium Produce Enterprises The range and number of regulations PPEs are required to comply with is extensive, due to the diversity of the sector. The breadth of produce, production and distribution approaches has contributed to a costly, time consuming and confusing regulatory framework PPEs need to navigate. There is a widespread perception among local PPEs that these regulations have been designed with larger, more conventional agricultural enterprises in mind and are consequently poorly suited to the realities and needs of the much smaller producers. The sector is also perceived as more financially risky and as such conventional lending approaches, and insurance, are not accessible. Funding sources, such as government grants, tend to be targeted to larger, more established business models, often with a requirement for international exports or other obligations which do not fit the PPE target markets. The business models of PPEs do not fit conventional agricultural business models.

In addition, the business support options available to PPEs are often costly for small scale enterprises and not well aligned to the specific business needs.

3. Limited access for Premium Produce Enterprises to infrastructure and markets is hampering the economic and social potential of the Hepburn region.

This problem incorporates issues such as access to value chain infrastructure, business support services, difficulties in distribution (including scalability, resource requirements, vulnerability to

24 Carey et al., 2018

Confidential


external forces such as weather conditions for farmers markets and predictability of produce sales), and linkages to regional brands.

The PPE community has clearly stated that there is a lack of infrastructure suitable to the production methods of their sector. The cost of specialised food processing equipment can be prohibitive for small producers25, and is exacerbated due to the highly centralised food system within Victoria. In addition, PPEs have consistently reported difficulties in effectively presenting and distributing their products to the market.

The inability to utilise infrastructure or efficiently sell products have significant effects on the business performance of PPEs. It is possible that these issues are not only inhibiting the growth of the sector but also threatening the economic sustainability of many individual PPEs.

2.2 Evidence of the problem Problem 1 - Increasing costs of agricultural land and labour and competing land uses are raising the barriers for Premium Produce Enterprises

The recently released FoodPrint Melbourne report provided an in-depth analysis of the rise of agricultural land prices in areas of Melbourne’s peri-urban areas, including several municipalities adjacent to Hepburn Shire. The proportion of Melbourne’s food supply able to be produced locally is anticipated to decline from 41% currently to 18% over the next thirty years. At the same time, food consumption is expected to increase by approximately 60%26. The issues facing Melbourne have the potential to significantly affect Hepburn Shire, unless adequate support is provided to the local food sector. This point has been emphasised in a report focused on the future of agribusinesses within the Central Highland region27 which identified not only the rise in agricultural land prices but also the increasing agricultural labour constraints.

The surveys of Hepburn Shire PPEs, underpinning this business case, confirmed that both these issues are directly relevant to PPEs in the Hepburn Shire. The survey identified a set of potential barriers (see Appendix G for the survey questions and the consolidated responses in Appendix H).

Around 15% of those surveyed identified ‘Rising price of agricultural land’ as one of their main concerns. This is largely because, for many, their business model is not directly related to large land holdings. However, the implication of changing land uses which has contributed to the price rises is seen in the regulatory challenges they experience. The higher perceived conflicts that are emerging (discussed under Problem 2 below) are referred to by FoodPrint Melbourne as ‘Right to Farm’ conflicts. In addition, ‘Capital costs to expand’ was overwhelmingly identified as a primary concern of the PPEs because they wish to invest in value add processes, but do not have the access to equity to do so. As noted by StartupAus, few financial institutions are set up to assist smaller scale primary industries28.

Over 70% of respondents advised that their household had an off-farm income. This is considerably higher than large-scale farmers surveyed by GRDC in Victoria, South Australia, and Southern NSW in 2015/2016. Only 19% of those farmers stated they derived income from off farm including off-farm

25 Surf Coast Local Food Policy Discussion Paper, 2018


27 McKinna et al., 2014

28 StartUpAUS, 2017

Confidential


investments. The amount of income derived from off-farm sources (or the desire for a second income for other reasons) appears consistent with the ABS findings relating to sector characteristics. On average, the income for people working in the agriculture sector within the Hepburn Shire was just above $45,500 and approximately $35,700 for those working in the food and beverage sector. Those working in the Hepburn Shire in the development of an agri-business are also working long hours, on average working 38 hours within agriculture and 31 hours within the food and beverage sector per week. In summary, PPE business owners work long hours with relatively low incomes and as such they do not have a lot of disposable income to invest back into their business.

Problem 2 Scale inappropriate regulatory requirements and financial risk perceptions are threatening the viability of Premium Produce Enterprises

This problem incorporates issues such as the number and complexity of regulations, ongoing compliance issues, and poorly suited requirements for the diversity and complexity of PPEs (and the difficult in fitting them neatly into simple classifications). It also includes perceptions of financial risk and impact to funds/finances, as well as restrictions on distribution approaches such as farm gate sales.

In undertaking similar research, Surf Coast Shire noted ‘Registration and compliance with food safety standards can create administrative burdens on small business operators29. Melbourne NORTH, a coalition of local government councils, industry groups and research institutions, prepared its Food and Beverage Strategy in 2015, covering primary food production through to food and beverage manufacturing. The strategy identified one of the major problems as the compliance cost burden for food companies, noting:

‘Food companies must comply with myriad government requirements relating to food safety, labelling, occupational health and safety, export accreditation and transportation regulations. The complicating factor is that these compliance requirements are managed by a number of jurisdictions with considerable overlap and duplication and a lack of harmonisation for the same accreditation standard or transport regulation. Australia’s performance globally in a ranking of government compliance burdens now rates 128th in the world out of 148 countries’.30

Potential financiers associate PPEs with higher risk due to the diversity of business models within the sector and a lack of understanding within the financial sector. The lack of perceived commonality within the PPE sector has also led to an inability to find effective avenues of advocacy for assistive regulatory, financial, and policy settings. Furthermore, as well-resourced industry groups generally represent bulk commodity-based farm businesses such as grain farmers or wool producers and do not represent the interests of PPEs. Through the recent Banking Royal Commission, the mismatch between the approach of financial institutions and farming requirements was further exposed31 , One aspect identified was the focus of lending institutions toward land consolidation and large scale expansion, as well as substantial investments in the latest equipment and technologies. Borrowing for these purposes does not meet the needs of smaller scale agricultural and food processing businesses, even if they had the capacity to service large scale loans.

29 Surf Coast Local Food Policy Discussion Paper, 2018


31 Weller and Argent, 2018

Confidential


The land use, business and food standard regulations are not well suited for PPEs. In addition, the government and business support systems that do exist are not well suited for PPEs. Some examples cited within survey results include:

• Unsuitable business support (due to costly and unaligned business support approaches)

• Registration and compliance with food safety standards creating excessive administrative burdens on small business owners (such as the need for multiple food-selling permits across local government boundaries)

• Marketing approaches that are not well integrated to make the most of the collective impact of numerous small businesses

• The lack of suitable subsidies, as the subsidy requirements are greater than the PPEs can often achieve and the size of subsidies is often greater than required

• A lack of consistency linked to both produce availability and consumer purchasing habits

FoodPrint Melbourne noted that although there are many policies that influence farm viability (both positively and negatively), ‘there are almost no state policies that aim specifically to improve the viability of farming in Melbourne’s food bowl’. Furthermore, it notes ‘the Agricultural Victoria Strategy has limited focus on horticulture and no specific focus on challenges facing peri-urban farmers’32. These conclusions have direct relevance on Hepburn Shire and the long-term viability of its PPE sector. The Victorian government has acknowledged the extent of this issue through its Artisanal Agriculture and Premium Food program. However, this is in the early stages of development so the full impact of this program has not yet been delivered.

Problem 3 Limited access for Premium Produce Enterprises to infrastructure & markets is hampering the economic and social potential of the Hepburn region. PPEs in the Hepburn Shire do not typically have the market size to use supply chain infrastructure options that are suited to larger scale businesses. It is often not viable for small-scale processors and producers to access specialised food processing equipment such as abattoirs or butchery services. Access to commercial operations is challenging due to cost and distance, with a highly centralised food system ‘centred on metropolitan areas’33. Presently, opportunities in the sector are constrained by the lack of scale aggregation, distribution, retail options and insufficient market access for small producers. However, it is not financially feasible, nor necessarily desirable, for individual businesses to finance their own equipment and thereby replicate equipment in the region for seasonal or limited use by the individual.

The Victorian Local Government Association released a report last year, identifying many of the challenges that come from the ‘changing dynamic of food production’ within the state. In particular, it noted the challenges to local food supply from the ‘limited control of the supply chain, evidenced by the closure of community abattoirs’ and ‘insufficient markets for small scale producers34’. Hepburn Shire stands as a particularly poignant example, having witnessed the closure of the Daylesford Abattoir in 2004.

This limited access to value chain infrastructure forced PPEs to use alternative methods to get their products to market. This is particularly evident in the distribution approaches PPEs use compared to


33 VLGA, “Food Systems and the role of local government’, 2017

34 VLGA, 2017

Confidential


those of conventional agricultural enterprises, as shown in Figure 17. While some of the most popular sales methods provide positive community benefits on their own, they provide a degree of vulnerability as well as challenges to accessing capital for expansion. In the survey responses PPEs identified getting products to market as one of the top three key challenges for their businesses.

Figure 17: Differences in distribution models, Hepburn PPEs and Hepburn Conventional food producers (source: Hepburn Shire survey, 2018)

As such, PPEs are more reliant on innovative approaches such as Community Supported Agriculture (CSAs), where consumers ‘buy a share’ of the business. While effective for stable income, they require particular business skills to develop and manage, and, more significantly for this problem, do not readily provide for financial boosts for short-term peaks and troughs. Given the fluctuating nature of the agricultural industry due to external variabilities such as weather, this is a critical point of risk for small business.

2.3 Timing considerations

FoodPrint Melbourne has identified the increasing pressures on food supply and the decreasing availability of land for agricultural purposes due to urban expansion. Given Hepburn Shire’s location on Melbourne’s periphery and its attractiveness as a destination for those seeking a lifestyle change, swift action to ensure the continued viability of the local conventional agriculture and PPE sectors is vital.

It is therefore imperative that measures to address the problems and deliver the benefits identified in this Preliminary Business Case commence within the next six months.

Hepburn Shire is already experiencing the early stages of this pressure, with the growth of ‘lifestyle’ farms on agriculturally zoned land. These ‘lifestyle’ farms frequently do not seek the same productivity output as commercial enterprises, and tend to have greater purchasing power and higher amenity expectations, increasing land and compliance costs for commercial enterprises. If insufficient support is provided for this smaller, specialised industry, there is a real risk that the future opportunities for smaller scale producers will also be greatly reduced. This impacts not only

Confidential


the immediate sector, but also secondary businesses, and the broader community who draw on the social and economic benefits of a thriving food and fibre sector.

Melbourne’s recent experience points to the importance of securing a range of food future options for Victoria’s major urban centre. It points to the opportunity for the Shire, given its close proximity. It also shows the risks to the Shire of losing an important resource for the region and the broader Victorian economy if adequate support is not provided to the PPE Sector. It is important that leadership, collaboration and innovation from local and State government is provided to the sector.

2.4 Consideration of the broader context

There is an increasing recognition that, while the industrialised process which now dominates western food production has produced benefits, Victoria needs to retain and increase the diversity of our food production and processing techniques. By doing so, we lessen our vulnerability to climate change while also improve food security within local areas and major urban centres. This is being recognised across the country and internationally, with food policies under development or being implemented in Canada, the United States and throughout Europe35.

In addition, the PPE sector is able to tap into the growing demand for specialised products and non-industrially processed food. Consumers are seeking food that is grown, processed and/or prepared locally using traditional or ‘authentic’ techniques, with providence clearly identified, and often with fewer intermediaries between the producers/processors and the end consumer.

Providing support to the PPE sector supports regional development, business innovation, environmental sustainability, food security and resilient job creation. Importantly, it also provides a point of difference and a greater resilience to this sector of the economy.

Across Australia and internationally a number of regions are seeking to build on their strengths, or, by contrast, seek to overcome their existing food supply challenges. Due to the different attributes of the various locations, a range of approaches are being applied.

The PPE sector is also uniquely positioned to supply high-quality and nutritious produce, such as high quality horticultural goods include fresh fruits and vegetables. Supporting and enabling the PPE sector strengths a source of highly nutritious but perishable foodstuffs in close proximity to major metropolitan areas. This offers the potential to simultaneously achieve food supply and health outcomes. Studies have indicated the importance of transport costs and variability in terms of business security36. In addition, ensuring resilient local and regional local food supply is important to ensure long term flexibility in meeting future needs37

35 VLGA report, 2017


37 Resilient Melbourne, 2016

Confidential


3. Part 3 Benefits

A model to support the Hepburn Premium Produce Enterprises will enable these PPE businesses to form a cohesive and thriving sector, creating significant benefits for the individual businesses and the region as a whole.

Enabling businesses to develop and strengthening their resilience, across the range of objectives they have for their business, will provide a variety of direct and indirect benefits to the broader Hepburn Shire community.

The benefits for Hepburn Shire are significant in terms of local economic growth and community resilience. Benefits could also extend beyond the Shire boundary, both in terms of the operations of the producers and the markets they serve, and also as they will provide a model which, if suitable, could be applied to a number of other Shires within the Central Highlands region.

The potential benefits that will accrue from addressing the problems identified in Chapter 2 include:

1. A thriving PPE businesses and community 2. A stronger wider regional economy

These benefits are described in more detail below, and are shown in the Investment Logic Map and provided in Appendix D.

3.1 Benefits to be delivered

Benefit 1 - Thriving PPE businesses and community

This benefit is focused on enabling Hepburn PPEs to operate with more confidence by reducing financial and regulatory barriers and ensuring premium producers have access to support services to help grow their business. It also addresses issues facing the entire PPE community, incorporating both existing and new entrants into the industry. Overcoming the problems listed above will address many of the barriers to the growth within the Hepburn PPE communities. A more stable and viable sector will in turn generate more confidence for others seeking to undertake similar operations or to work within regional Victoria.

The Rural Research and Development Corporations (RDCs) developed an approach to evaluate the economic, environmental and social returns derived through government investment in funding and forming partnerships between industry and government. Their approach, reviewed by economic agencies of the Australian Government including the Treasury, Department of Finance and Deregulation, Department of Agriculture Fisheries and Forestry, Productivity Commission, Australian Bureau of Agricultural and Resource Economics, found a suite of economic, environmental, social and public benefits38. At an individual and sector level, well targeted investment can generate a range of benefits including the following:

• Economic benefits such as reduction in production costs, improved supply chain and markets, increased royalties, increased demand for primary products, increased yield, improved efficiency, increased industry and value add

38 Rural R&D Corporations, 2008

Confidential


• Environmental benefits relating to improved biodiversity and increased carbon sequestration, reduced soil erosion and improved water quality

• Social benefits such as improved food safety and security, strengthening rural communities –improved human health, improved training and development

The value of government investment in the food industry, including primary produce businesses and processing companies, has been well established. In February this year, industry, education and government partnership organisation NORTH Link announced funding to establish Melbourne’s North Food Group, creating more than 50 local jobs. It identified that by providing the right support to the existing food sector, it could double output to $5 billion and add 7,000 jobs over the coming decade.

While the Hepburn PPE sector is not the same size as the Melbourne North food cluster, in many ways, there is potential for a higher return on investment. The Victorian Eco Innovation Lab (VEIL) research into the economic benefits of ‘vibrant sectors of small to medium sized food enterprises’ found that, while the economic research in Australia is currently limited, the evidence from overseas indicated high value in government investment into these smaller enterprises, particularly in terms of farm viability, job creation and efficiency.

Figure 18, based on the Hepburn Survey results, indicates that PPEs within Hepburn Shire are significantly more likely to be involved in value add activities than conventional agricultural enterprises.

Figure 18: Product range within Hepburn Shire (source: Hepburn Shire survey, 2018)

With a more deeply connected and enduring PPE sector in place there is the potential for greater collaboration within the sector. Intra-sector collaboration will form a key instrument for increasing

Confidential


innovation within the PPE sector. There is evidence of emergent business models within the PPE sector39. Greater collaboration could not only strengthen these innovative approaches to business but also lead to even further innovation in the produce of the PPE sector. Collaboration could lead to new processes and products emerging, which in turn would strengthen individual PPEs and the sector as a whole.

The KPI modelling sets an aim for a 10% growth in investment across the sector, reflecting both an increase in confidence, collaboration and collective growth in the sector.

Benefit 2 - Stronger wider regional economy

This benefit recognises the regional economic and social benefits from a strong and thriving PPE sector both in terms of employment opportunities and boosted economic activity attracted by the growth of this niche industry. It recognises, as the VLGA states, that ‘to support a thriving local food system is fundamental to supporting a thriving community’40.

The agricultural sector is the biggest single sector generating employment in Hepburn Shire41. ABS data from 2015/2016 identified approximately 450 people working in the Hepburn Shire in the agricultural sector, with a further 145 people working in the food and beverage processing. In total, employment across the agricultural and food processing sectors accounted for 10% of the 5,853-people estimated to be employed within Hepburn Shire42. According to a 2010 study commissioned by VicHealth that assessed local food production in several Victorian municipalities, including Hepburn Shire, there is a clear link between food processing and agricultural employment in this Shire that sets it apart from other Shires43.

VEIL research into the economic benefits of ‘vibrant sectors of small to medium sized food enterprises’ found that “farms under 100 acres provide five times more jobs per acre than those over 500 acres”44.

Supporting the small-scale farming enterprises that characterises the PPE sector therefore has the potential to provide greater employment benefits than supporting the operations of large-scale agricultural enterprises. These higher levels of employment could also facilitate trade revenues being retained within the local community, compounding the positive impact of the PPE sector.

This would enable skilled workers within the sector to not only enhance and best utilise their knowledge, but also cultivate enduring networks across the industry. These connections would enable even greater innovation and leadership to emerge from within the PPE sector, effectively multiplying sector resilience and further improving the sustainability of individual businesses.

Strengthening the PPE sector has the potential to improve not only the resilience of agricultural earnings within the Hepburn Shire but also provide a significant boost to value added processes

39 Survey responses, Hepburn Shire PPEs, 2018

40 VLGA, 2017



43 La Trobe University, 2010

44 Norberg-Hodge, 2002

VEIL research has found that “farms under 100 acres provide five times more jobs per acre than those over 500 acres”

Confidential


within the area. Agriculture is one of the strongest sectors within Hepburn Shire, generating approximately 12.2% of gross revenue, with a high percentage of this being circulated within the local economy45.

Enabling the PPE sector to reach its full potential also offers dividends and synergies with tourism to the Hepburn Shire area. The products of PPEs communicate an experience with consumers, offering consumers with the opportunity to partake in the experience of ‘artisanal’, ‘sustainable’ or ‘healthy’ foods. This makes the produce of PPEs uniquely suited to the tourism industry, as experiences are the essential product of tourism. A thriving PPE sector within the Hepburn Shire area offers a significant point of distinction in the area’s value-offering to tourists.

The PPE sector also provides social and economic benefits to communities. Sustainable and ethically conscious farming practices as well as business models that embrace collaboration and value meaningful local engagement over growth help to foster a greater sense of interconnectedness between industry and community. These represent some of PPEs strongest assets as a sector. In addition, ‘food growing, preparation and sharing … offer ways to build social cohesion and community resilience’ and can be particularly relevant within aging communities, as they provide opportunities for ongoing physical activity, access to healthy food, social interaction and contribution.’46

The benefits are particularly relevant for the Hepburn Shire, given the existing natural and human assets of the area. There is already a strong network of PPEs with diverse outputs and business models. The Hepburn Shire also benefits from well suited environmental conditions for ongoing agricultural uses47, an agricultural workforce with higher than average levels of education, established connectivity with Melbourne and Ballarat, and access to infrastructure and transport hubs.

Meeting growing consumer demand for quality food and produce, and leveraging the sector’s strengths to ensure it remains resilient and continues to drive positive economic, social and environmental outcomes, will provide long term benefits for the wider economy and the community as a whole.

3.2 Importance of the benefits to Government

With the population of Melbourne and Victoria predicted to grow significantly in the coming decades48, the PPE sector has the potential to meet some of the region’s growing food demand. Furthermore, increasing the supply of affordable and nutritious food to the local area has the potential to improve the health and food security of the local community.

45 REMPLAN, 2018

46 VLGA, 2017

47 Deakin report, 2016


Unlocking growth in the PPE sector also has the potential to significantly progress State and Commonwealth goals for regional development.

Confidential


Unlocking growth in the PPE sector also has the potential to significantly progress State and Commonwealth goals for regional development. The agriculture sector brings revenues into regional areas and captures it through the necessity of ancillary services in agricultural enterprises. The PPE sector is also well suited to further develop regional economies, due to the high percentage of PPEs that engage in value-additive processes. Supporting the PPE sector therefore has the potential to significantly increase the value-added processes occurring in regional areas. These processes have the capacity to provide regional areas with high-quality and ongoing job opportunities. These processes also bring revenue into regional areas and circulate it into the regional economy through the wages paid to employees.

All levels of government have recognised the importance of supporting a changing agricultural sector, the role the regions play in contributing to economic growth, and the delivery of key products, services and experiences that all Australians are able to enjoy. This business case is consistent with a range of strategies, initiatives and funding streams operating from all levels of government.

3.3 Evidence of benefit delivery

This Preliminary Business Case provides the following six KPIs to measure the effective delivery and implementation of the Hub for Premium Produce. These KPIs have been developed through a rigorous ILM workshopping process with relevant local stakeholders in conjunction with considerable contextual research into the sector and the region.

Benefit 1 - Thriving PPE businesses and community

Evidence that Benefit 1 will be delivered will be demonstrated through the following KPIs

KPI 1: growth in industry confidence and satisfaction KPI 2: increased investment by PPEs KPI 3: increased usage of infrastructure & resources

KPI1 Industry confidence/satisfaction

Baseline Measures of existing confidence in their business future, and satisfaction in support services (specific measures to be agreed with funding body, with input from proposed reference group – see part 4 of the business case)

Source Survey of Hepburn PPEs (details collected through research for this project)

Interim target A 10% increase on baseline numbers within three years

Reporting forum Annual ‘pulse checks’, reported in annual program report to be provided to funding body

Start date Within three months of response solution being funded

Frequency Annual

End date Five years from funding commencing (subject to three-year review)

Responsibility Program owner (to be determined – see section 4 of this report)

KPI Increased investment by PPEs

Confidential


KPI Increased investment by PPEs

Baseline Current level of financial investments, on average, and collectively, within the Hepburn Shire

Source Analysis of ABARE and ABS data to relate to PPEs As comparison / sense check, broad qualitative information to be gathered through survey of Hepburn PPEs (details collected through research for this project)

Interim target Growth in investment of 10% (scale of growth to be agreed with funding body, with input from proposed reference group – see part 4 of the business case).

Reporting forum Annual ‘pulse checks’, reported in annual program report, to be provided to funding body


Frequency Annual pulse checks, qualitative data in alignment with ABARE /. ABS data releases



KPI Increased usage of infrastructure and resources

Baseline Stocktake of existing agricultural infrastructure and resources within the Hepburn Shire and the Central Highlands Region.

Source Agriculture Victoria, Australian Business Register, Advice from Hepburn Shire, Cultivate (Ballarat), Daylesford Macedon Produce and Daylesford Macedon Tourism Board

Interim target Growth in investment (scale of growth to be agreed with funding body, with input from proposed reference group – see part 4 of the business case).

Reporting forum Annual ‘pulse checks’, reported in annual program report, to be provided to funding body





Benefit 2 – Stronger wider regional economy

Evidence that Benefit 2 will be delivered will be demonstrated through the following KPIs

KPI 1: number of PPE employees

KPI 2: Increased investment in region

KPI 3: greater value-add products

KPI 1 Number of PPE employees

Confidential


KPI 1 Number of PPE employees

Baseline To be established. Build on existing Hepburn Shire survey information (note – this provides an incomplete picture)

Source ABS data definitions, as analysed by Agriculture Victoria (baseline: 2016 census), and more targeted review

Interim target To test: 10-20% increase in EFT positions

Reporting forum Annual progress reports, reported in annual program report, to be provided to funding body





KPI 2 Increased investment in region

Baseline Measures to be set and agreed on with funding body

Source To be determined (agreed financial / regional investment source – State or Federal government agency or well-regarded private financial institution)

Interim target Anticipated 10% increase

Reporting forum Based on source,

Start date Based on availability of date – aim within 6 months of funding receipt

Frequency Annual report (if available)

End date End of program

Responsibility Program owner (see part 4 of report)

KPI 3 Greater value add products

Baseline Existing assessment - $61 million

Source (see REMPLAN auditing)

Interim target Growth of 20% within 5 years – progressive targets to be established

Reporting forum Annual program report, to be provided to funding body

Start date Based on availability of date – aim within 6 months of funding receipt

Frequency Annually

End date End of program

Responsibility Program owner (see part 4 of report)

Confidential


3.4 Interdependencies

The achievement of the benefits identified requires the support of the Hepburn PPE sector, the local council and regional representatives of state government authorities. This support would be shown in terms of allocation of time, focus, and commitment to achieving the benefits. The approach proposed is cognisant of these requirements, the existing alignment with their priorities, and the seeking of funding sources to provide the resource support required to enable these groups to maintain the commitment required.

In addition, the benefits will be achieved with the assistance of government policy and delivery units, access to relevant data sources, participation in industry forums and access to information regarding opportunities. Given the commitment of government to developing the Victorian Government’s Artisanal Agricultural Program, this support is anticipated to be readily accessible.

Finally, the support of existing smaller networks across Hepburn Shire and within the PPE networks distributed more broadly will be important to generate commitment. Sharing and two-way support across local governments who are tackling similar issues will be an important consideration.

Confidential


4. Part 4 Strategic response

4.1 Method and criteria

4.1.1 Overview

During the concept development stage of this project, a facilitated Investment Logic Map (ILM) workshop was conducted to identify possible interventions and broad strategic options were identified to address the problems and realise the intended benefits. These were further refined in shorter sessions with the same participants.

The Investment Logic Mapping Workshops were run with the participation of a Technical Working Group established for this project. The Technical Working Group comprises local industry representatives as well as representatives of the client (Hepburn Shire Council) and relevant government input (Agriculture Victoria).

The development of the strategic options and responses was informed by the following considerations:

• Priorities identified through the research underpinning the problems and benefits assessment

• Consideration of other programs under development, as discussed below

• Stage of industry readiness – consideration of capacity building

• The progressive scaling up of effectiveness, in order to address the immediate needs while setting a platform for further stages.

• The evolving definition and refinement of the PPE sector, and the broader understanding that is underway through the Agricultural Victoria’s Artisanal Agriculture and Premium Food program.

• The need for a localised solution that addressed needs specific to the Hepburn Shire sector

• Operating models and impact on the focus and drive to address the Problems.

The process to identify a preferred strategic response was iterative, with potential interventions identified and refined in the light of proposed strategic options. This iterative process enabled the benefits to be well explored, and a holistic response proposed.

The steps followed were:

• Assessment of the potential strategic responses against identified Key Performance Indicators and then the risk, delivery cost and timing implications.

• Identification of potential interventions and assessment of each intervention against each strategic response.

As a result, a preferred solution was developed.

4.1.2 Lessons from other programs

Different approaches to supporting the local food producers and processors across Australia and internationally have been identified through background research behind this Business Case development. These approaches included:

• The establishment of identified food clusters, run in order to identify and address specific locational issues

Confidential


• Development of food hubs primarily for aggregation and distribution purposes

• Specific programs or support mechanisms targeting specific improvements to aspects of the food supply chain process (business planning, technical assistance, supply chain efficiencies, and so on)

• ‘Point of contact’ government assistance programs, providing a one-stop shop

These different approaches are, variously, established by industry or research groups, national or regional bodies, or through collaboration between a range of parties.

These different approaches also have different funding models. These include establishment funding from government grants programs or, in some cases, ongoing funded from similar programs to deliver a core government outcome; membership subscriptions (often with different fees for different categories of members); or fee-for-service on most products, activities events offered.

The lessons from these programs have informed the proposed solution developed.

4.2 Strategic options analysis

4.2.1 Strategic interventions

The six interventions identified were:

1. Improve the regulatory approvals approach 2. Improve access to funding for PPEs 3. Improve opportunities for industry collaboration 4. Reduce costs of production and processing 5. Improve access to markets 6. Raise profile of the Hepburn PPEs

The explanations of the different interventions are provided below.

Strategic Interventions

Improve regulatory approvals processes

A combination of interventions to (1) streamline the approval process by providing clear communication to PPEs to improve understanding of requirements, reduce time & cost of compliance, and; (2) seek to influence regulatory change to reduce the burden on PPEs.

Improve access to funding for PPEs

Series of interventions targeted at providing PPEs with more accessible means of finance including government grants, private financiers or other targeted means of investment.

Improve opportunities for industry collaboration

Intervention to further develop industry networks to secure more effective outcomes from collaborative efforts, thereby enhancing growth and resilience in the sector. This includes a full range of options, ranging from online platforms for virtual collaboration to a full physical hub to facilitate connectivity.

Confidential


Strategic Interventions

Reduce costs of production and processing

Specifically focused on the cost burdens carried by PPEs in production and processing (excluding regulatory approvals and compliance). These include the operating and capital costs to effectively and efficiently operate the businesses/enterprises. These could include measures for cost sharing (sharing services, smoothing, if possible, labour peaks and troughs), and access and cost of using value chain infrastructure.

Improve access to market

Series of interventions aimed at better connecting producers' products with customers. Can also include leveraging existing distribution methods, from local farmers' markets, food industry networks and other approaches, to more effectively connect customers and PPEs.

Raise profile of Hepburn PPEs

Engage in a targeted marketing and/or advocacy campaign to promote greater awareness of the Hepburn region as a hub for PPEs and attract greater demand for their produce.

These processes are set out in sections 4.2.2 and 4.2.3.

4.2.2 Strategic responses

Through the workshops, five strategic options were identified. These covered a spectrum from limited involvement, bringing in external experts to advise but not direct, to more collaborative, hands on approaches which covered a broader range of outcomes.

The five strategic options are as follows:

Strategic Options

Business as usual / Do nothing

Do nothing

Commercial Finance Focus

Mechanisms to connect private finance to PPEs in the Hepburn region, including exploring changing risk perception with private / public financiers. Requires funding assistance for specialist advice to unlock opportunities and navigate the various potential options to overcome local PPE barriers.

Industry-led collaboration

Support for the PPE industry to lead the development and implementation of a sector strategy, action plan and road map to sector resilience. Requires funding for administrative / technical assistance to project manage, and specialist assistance, as identified by industry.

Government Facilitated Partnerships

Point of reference for industry to unlock opportunities, navigate regulatory pathways, enable better connections, advocate, explore avenues for government funding for PPEs and build local PPE industry capacity and leadership. Funding for staff resources (potentially for start-up period) and to develop and maintain an online platform.

Confidential


Strategic Options

Integrated Hepburn Hub Focus

Provision of a physical space to sell, aggregate and process their produce, engage in networking, and access relevant regulatory, financial and/or industry resources and services. Requires a level of industry capability to be self-governed and, ultimately, self-sustaining.

4.2.3 Assessment of strategic responses and interventions In order to assess the effectiveness of these interventions, there was an assessment made about how they performed against a range of strategic responses, which, in turn were tested against the KPIs, to determine the benefits to be derived. This is set out in the Table on the following page, and enables a more refined identification of the role and functions of the potential strategic options.

As set out in the table comprising Table 1 on the following page, the Government Facilitated Partnerships and the Integrated Hepburn Hub Focus have the potential to address the interventions.

Confidential


Table 1: Assessment of strategic responses and interventions

Response options Option 1 Option 2 Option 3 Option 4 Option 5 Type Interventions Business as

usual / Do nothing

Commercial Finance Focus

Industry-led collaboration

Government Facilitated

Partnerships

Integrated Hepburn

Hub Focus None 100%

Improve regulatory approvals processes 30% 20%

Improve access to funding for PPEs 60% 30%

Improve opportunities for industry collaboration 30% 20% 20%

Reduce costs of production and processing 20% 5% 20%

Improve access to market 20% 20% 5% 20%

Raise profile of Hepburn PPEs 20% 30% 10% 20%

Total 100% 100% 100% 100% 100% NOTES 1 The range of interventions that could respond to the identified problem and deliver the KPIs for the expected benefits are

listed in the left-hand column.

2 Against the listed interventions a spread of response options are structured to provide genuine alternative approaches to the problem.

3 Response options should be titled to reflect the underlying strategy. 4 The shaded boxes indicate which interventions are used in each response and the percentage (%) indicates the relative

importance of each specific intervention within the response. The total should be 100%.

5 This is a balance of two factors: the importance of the intervention in delivering the response option, and the likely effort/cost involved.

Confidential


4.2.4 Ranking of strategic options

The strategic options were then assessed against the KPIs to determine the extent to which they would achieve the intended key performance indicators and benefits, rated from 1 (no impact) to 5 (fully addressing the benefits).

As identified within the table below, the Integrated Hepburn Hub Focus ranked highest when evaluating the strategic response options’ direct contribution to the achievement of the key performance indicators and benefits, followed by ‘Government Facilitated Partnerships’.

However, when the options were also assessed against the deliverability, in terms of risk, delivery time and relative costs, the preferred option changed, as shown in the table below:

Table 2: Evaluation of strategic options

Confidential


4.2.5 Recommended strategic option The recommended strategic option is Option 4 – Government Facilitated Partnerships. This option brings together government and industry. This strategic option captures three interventions as the key focus areas, namely:

• Improve the regulatory approvals approach

• Improve access to funding for PPEs

• Improve opportunities for industry collaboration

The preferred strategic response is locally focused, with a priority on connecting and actively working with the PPEs in Hepburn Shire to navigate processes, unlock opportunities, and build the ongoing capacity and skills of the PPE sector to collectively grow and thrive.

This response focuses on connecting the industry’s knowledge with government experience and connections. Specifically, it seeks to draw on the sector’s existing expertise in what is needed, and what will work, to enable PPE industry development. It also recognises that government assistance is helpful for providing guidance and experience of working within government, and private – public sector connections are also fundamental for this process to operate well.

While the three interventions listed above will be priorities, this strategic option will also assist in raising the profile of the Hepburn PPEs, albeit with a lighter touch and more through consequences of the first three interventions.

This response will also include the following outcomes:

• Greater clarity and identify for the sector: Through creating a single point of contact and an overarching body to oversee the delivery of this response.

• A more unified direction for the PPE sector: by the setting of a clearer agenda and work program

• Industry capability and resilience: through building business capability skills to develop and implement initiatives which feed the supply and demand equation.

• Regional strength for the Hepburn Shire and Central Highlands Region: Through the effectiveness of the program elements , development of a clearer identity and business initiatives

• Innovation: As the response enables the Hepburn PPEs to expand their approaches, and grow their identity as leaders in effective processes in quality, artisanal food production and processing.

The combination of these responses and interventions will enable the ongoing development of the PPE sector in Hepburn Shire to deliver on all of the benefits.

Confidential


5. Part 5 Solution

5.1 Solution options considered As stated earlier, the preferred strategic response is locally focused, with a priority on connecting and actively working with the PPEs in Hepburn Shire to navigate processes, unlock opportunities, and build the ongoing capacity and skills of the PPE sector to collectively grow and thrive.

As noted above, the response looked at a three-way connection:

• Industry knowledge, commitment and networks

• Government oversight and integration within bureaucratic networks

• Resources to enable outcomes to be delivered

This response focuses on connecting the industry’s knowledge with government experience and connections. Specifically, it seeks to draw on the sector’s existing expertise in what is needed, and what will work, to enable the PPE sector to grow and thrive. It also recognises that government assistance is helpful for providing guidance and experience of working within government, and private – public sector connections are also fundamental for this process to operate well.

In order to deliver on a strategic response, consideration was given to different solutions. These included:

• Seeking an existing group in Central Highlands to take carriage of the proposal.

• Providing additional support for Council (or similar government organisation) to develop and run the program, potentially periodically checking in with industry for project advice.

• Including the ideas set out within this business case as part of the existing council program or networks, and letting specific projects evolve organically.

• Creating an organisational and governance structure which allows for industry to drive the development of priorities, while ensuring it is administered, authorised and implemented through an understanding of the alignment with government priorities.

These options were considered in Table 3 on the following page:

Confidential


Table 3: Evaluation of delivery options

Options Pros Cons

Outsourcing approach Existing structures in place, community and industry recognition.

Challenges for an organisation with a large remit to focus on the needs of a specific group. Without a specific focus, it may not achieve outcomes.

Use of existing services Limited / no additional resources (recognising others are already stretched)

Already stretched – unlikely to deliver outcomes. Need for industry input (ownership, commitment, understanding)

Additional support from government

A degree of awareness of running projects and programs, able to dedicate time and resources

Without industry’s active commitment, potential for wasted effort (incorrect priorities, limited support). Funds required.

Targeted program led by auspicing organisation, guided by industry input (recommended)

Development of a program, aligned with other programs, needs and prioritisation. Resources considered in order to deliver outcomes.

Funds required to develop and deliver outcomes.

A targeted program approach provides the strongest opportunity to deliver beneficial outcomes for the sector and the community as a whole. While funds will be required, the cost benefit outcomes are positive. It also provides the most effective approach to addressing the highest rated strategic interventions:

• Improve the regulatory approvals approach

• Improve access to funding for PPEs

• Improve opportunities for industry collaboration.

Confidential


5.2 Details of the recommended solution

The recommended solution is summarised as follows:

The development and delivery of a localised program focused on connecting and actively working with the PPEs in Hepburn Shire to navigate processes, unlock opportunities, and build the ongoing capacity and skills of the PPE sector to collectively grow and thrive.

This program will provide a clear point of contact between industry, government, and private sector interests. The program will be developed and delivered in a collaborative way between Government and the Hepburn PPE sector. It will address a range of functions, from:

• direct procedural and regulatory assistance

• facilitate better connection to relevant regulatory, financial and/or industry resources and services

• advocacy to government, authorities and regulators

• exploring avenues for government assistance for the PPEs, including the preparation of funding proposals

• building the local PPE industry capacity and leadership to take the next step in their long-term viability and growth.

Program specifications need to be developed, in terms of the scope and breadth of the program, interface with other organisations including surrounding municipalities, and which options to prioritise. These will be undertaken as the program implementation is further developed.

The establishment of the project comprises three key components:

• Establishing and running the agreed governance structure

• Program development and delivery

• Resource: staff and operating budget in order to deliver elements of the program.

The end goal is a more independent, less constrained, and a more collaborative Hepburn PPE sector, with an invigorated level of production, turnover and profitability. The unified Hepburn PPE sector will be more resilient and cohesive, speaking with a collective voice and continuing to work towards ongoing sector growth and enhancing the identity, brand and value of ‘Hepburn Shire’ food products. Through this program, there will be opportunities to assess and evaluate opportunities for project sequencing and expansion in coming years; building on the successes of this initial investment whilst developing more sophisticated ways to assist the burgeoning Hepburn PPE sector.

This may include the option of a Hepburn Shire, or Central Highlands, integrated ‘Hub’, with functions such as aggregation and distribution, and potentially, processing facilities and / or business development facilities. If this is an approach that is assessed as having merit, the sector will be more advanced and better equipped to undertake the development and delivery of such a program.

Confidential


5.3 Cost estimates

The costs involved within this solution provide for the costs of a full-time employee, for a period of three years, as well as operating costs. The proposed costs are broken down in the Table 4, and would be assisted by provision of in-kind support from auspicing body (Hepburn Shire or other):

Table 4: Cost estimates

Program cost categories Components Cost

Establishment costs IT budget, Office furniture Phone purchase, Website design

$35,000

Annual Salary One full time officer

$111,000 (including all oncosts)

Operating Costs (excluding salary)

Sector development (Training and mentoring budget, field trips, and workshops), administration (secretariat, website maintenance and hosting, venue hire and associated costs), marketing and publicity (publication design, exhibitions, marketing, website maintenance and hosting, memberships, printing), skills and advocacy assistance for staff (officer training and travel costs).

$114, 000

Table 5 below sets out the proposed costs per annum:

Table 5: Proposed costs per annum

Annual costs 2018-2019 2019-2020 2020-2021

Salary $111,000 $111,000 $111,000

Operating costs $114, 000 $114, 000 $114, 000

Establishment costs

$35,000

Total $260,000 $225,000 $225,000

Confidential


5.3.1 Resources

The table above sets out the resources required for the preferred solution. It is proposed that funding is sourced for a PPE sector support officer and on-costs. The funding would be required for three years as establishment funding.

5.3.2 Funding options The following options for establishment funding have been considered:

• Private sector financing: There are two approaches this could take. The first approach would require investment by philanthropic organisations, businesses within the sector or affiliated (such finance or agribusiness support organisations) as or individuals who see the value in investing or directly supporting the program’s objectives. A second approach would be to offset some or all of the costs through either membership or fee for services.

• Federal or State government funding: At a state level, a funding bid could be put to the Department of Treasury and Finance. Alternatively, at a Federal or State level, sourcing and applying for grant funding may enable the project to commence. Another potential source of Government funding is bidding for ad-hoc grants and programs that emerge over time. This includes programs such as the Federal Government’s ‘Farming Together’ (Farm Co-operatives and Collaboration Pilot Program) or the Victorian Government’s Food Voucher program. However, these sources and others like them are frequently intermittent and if any are utilized, a search for future funding will have to take place.

• Local government resourcing: Undertaken by local government, through existing funds or reallocation. As this program may be rolled out to others within the Central Highland network, it may be possible for the project to be collectively funded by a number of local councils.

• A collaborative approach, through collaboration between industry, DTF, philanthropic, and council

While private sector funding has been successful overseas, there are limited examples of this operating in Australia. Organisations that support these programs would be seeking a more developed program with a longer history of operation. Alternatively, from a business perspective, they tend to include larger scale manufacturing businesses (as seen within the food cluster examples cited in the ‘Understanding the Premium Produce Sector in Hepburn Shire’ report). In addition, for these clusters to advance, they have required the funding of government to move beyond their initial stages. Collaboration has worked in some instances, such as the Melbourne North Food Project, however it has taken many years to develop and, again, has required the assistance of government to advance.

There are very few local governments who have been able to fund the provision of an officer, let alone the support services provided by the program. Local government’s capacity to find additional resources is constrained, particularly within regional municipalities with low rate bases. This is not a viable option within this short term, but may prove up to be a bona fide option past the initial establishment phase (three years).

As a result, establishment funding through state or federal grants, or via DTF, is considered the most beneficial. Given the benefits it could provide regionally and in meeting state objectives, this is considered the most appropriate approach.

Confidential


5.4 Program implementation strategy Key to the implementation approach is the establishment of a representative agency with ownership and responsibility for the strategic interventions detailed in this report, to ensure the program undertaken remains within the approved scope, budget and timeframe, together with benefits management and industry development frameworks.

A clear governance framework is key to framing the program mandate, aligning strategic interventions and setting the scene for industry engagement and collaboration. This governance framework will consist of an auspicing body to provide oversight and have responsibility for employment, funding obligations and reporting requirements. It will also set in place the broad program objectives, ensuring alignment with strategic interventions, government objectives and funding obligations.

A Stakeholder Engagement and Communications Plan will be developed early in the delivery of the Program to ensure important industry collaboration. The components of the Stakeholder Plan will be:

1. Identifying stakeholder requirements and considering them within the scope and timeframes of the Project; (Section 5.8.1)

2. Increasing stakeholders’ awareness of the project strategy, its benefits and how to access pathways, particularly within the regional and wider jurisdictions as required; and

3. Aligning key stakeholders for delivery of the program, including developing the draft work plan, for approval by the authorised registered body.

Further details on the governance framework are contained in Section 5.7 of this report.

5.5 Stakeholders

Table 6: List of key stakeholders

Stakeholder Interest and approach

Hepburn Shire Council

Hepburn Shire Council is project managing the development of this project. The option proposed aligned with its current economic development strategy.

Regional Partnership

Central Highlands Regional Partnership has identified this project as a priority, and has provided the direction in developing the preliminary concept and commenting on the progress of the preferred option.

Regional Development Victoria

Seed grant to develop the business case for the proposal, with a key interest in employment and activity in the regions. They form part of the Central Highlands Regional Partnership working group. They are supportive of the approach proposed, to develop the sector.

Hepburn Shire Premium Produce Enterprises

The input from the PPE community has been an important element of the development of this project. There will be strong interest in its delivery and detail. PPE representatives are proposed to form part of the program control group, helping to shape the work plan. Other engagement approaches will be developed as part of the stakeholder management plan.

Confidential


Stakeholder Interest and approach

Agriculture Victoria

Key interest in the development of the sector and alignment with government priorities. Involvement in the development of the business case and should continue to play an active alignment role, through membership of the program advisory board.

Local community Consideration of the benefits and disbenefits. These are unlikely to be an issue for the hospitality, tourism providers, residents and business operators, but may be of concern for other members of the community, such as those living close to PPE businesses. The stakeholder management plan will need to identify and address any issues arising from identified projects, at the early stage.

Neighbouring municipalities

The opportunity for mutual benefits and alignment is strong, and there are good relationships in place, consolidated through the regional partnerships. The overlap, and combined opportunities with discrete projects, as well as the opportunities for this program to form a model for other municipalities, will be addressed through the stakeholder program.

Traditional sector

There will be interest from traditional agricultural businesses, and there will need to be sensitivity in showing the benefits across the traditional and agricultural sector. With this in place, there is likely to be strong support.

Good food leaders

Anticipated to be strong support given the alignment with local food industry leaders’ objectives. Potential opportunities for cross over projects.

Daylesford Macedon Produce

Its focus is to enhance the local food and agricultural sector, and therefore they will be supportive of the outcome being achieved.

Daylesford Macedon Ranges Tourism Board

Aligns with current Tourism Management Plan, recognising the importance of the industry to the region.

Financiers Seeking input and interest from a wide range of financial institutions and private lending organisations, as well as innovative finding process.

Consumers Assists in delivering the needs for consumers, both locally based and for a growing consumer sector further afield.

Minister Strong support by the local member in developing an evolving agricultural sector. In addition, this program aligns well with the Government’s objectives.

5.6 Risk management

The table below sets out potential project risks and proposed approaches to addressing these.

Table 7: Key risks to the success of this investment

Risk Description

Lack of dedicated focus compromises achieving objectives

Addressed through the establishment of a dedicated governance structure to ensure ongoing assessment and focus on achieving objectives.

Inability to secure funding leads to delay in initiation

Opportunities for funding sources explored by the program’s auspicing body, exploring funding from Commonwealth RGF and State options.

Overreach Development of the overarching objectives and outcomes, prior to recruitment, to ensure alignment with identified needs.

Confidential


Risk Description

Industry representatives (PPE growers and producers) do not volunteer time

The active participation of the PPE sector is a core element of the preferred approach, as their knowledge, networks, and understanding of needs and challenges is central. They are the group to benefit from the program, so it is anticipated that they will be active contributors. Their involvement in the business case suggests that lack of interest by this group is a low risk that can be mitigated by foundational involvement in the Program Control Group.

Change of government

There is strong overall support from both sides of government for measures that support development and sustenance of regionally-based agricultural communities.

5.7 Governance structure

The proposed governance structure is shown in Figure 4 below.

• The Auspicing Body will have responsibility for oversight, project alignment, and delivery. They will also be responsible for reporting the outcomes back to government, proposed to occur on an annual basis.

• The Program Control Group is proposed to consist of representatives from relevant government agencies, and representatives from the PPE sector, and provide direction to Program Facilitator through the Auspicing Body.

Confidential


In addition, a proposed operating structure is indicated.

The proposed terms of reference for the authorised body will include at a minimum:

• Capacity and capability of the governing body membership to provide relevant and informed advice

• Industry collaboration structure and advisory role

• Provision of strategic and operational direction and control mechanisms

• Stakeholder engagement and communication planning

• Articulation of program benefits across the program timeline

• Risk management identification and mitigation (Section 5.6)

• Reporting and Monitoring of progress

• Approval of a work-plan across the program lifecycle

5.8 Program development and delivery

In order to achieve the program outcomes a work plan will need to be developed which to deliver on the key objectives for the program, as identified within the benefits plan. This workplan will be based on the broad program objectives established by the Auspicing Body. It is anticipated to include the following overarching objectives:

• Increase industry knowledge and establish coordinated direction

• Build business skills within key areas

• Address and reduce regulatory and procedural barriers, and implement measures to mitigate the land and infrastructure costs impacting PPEs

• To develop to a self-sustaining model

• Bridging to next stage

A number of projects could be delivered under this project, such as:

• Developing a road map (interactive or paper based) for navigating the regulatory processes, for different PPE categories

• Workshops / training sessions arranged on topics identified as relevant

• Dissemination of information – two ways – via public platform, and in other forums as agreed

• Identification of funding opportunities, preparation of bids (if collective) or assistance in preparation of individual proposed

• Representation on consultative boards with government, regulators, or financial institutions

• Identifying key advocacy opportunities, generating the justification / support and comprising the material in order to persuade for desired outcome

• Create connections and alignment across government and industry bodies (for instance, to overcome silos in policy development and implementation)

Confidential


5.8.1 Timelines

Figure 5: Proposed timeline

The timeline identified about shows the focus on establishing the Program. The development of specific project outcomes will be further developed once the governance structure is established, with the input of the key parties.

5.8.2 Next steps

To progress the preferred solution further, the following steps should be taken:

• Establish the governance framework

• High level work plan, including alignment with strategic interventions

• Identify funding sources as available

• Map funding obligations

• Formalise governance arrangement

• Commence recruitment and other resource steps

• Develop detailed work plan in collaboration with key stakeholders.

• Commence, deliver and monitor

Confidential


Appendix A – Methodology and timeframe

Methodology Overview

The methodology relies on the input and feedback from those within the PPE sector and the State and Local Government representatives.

The purpose of the method is to ensure that this report and the subsequent business case were based on a solid understanding of the needs of the PPE sector, what solutions will best meet their needs, and ensuring that the proposed solution represents an approach that can feasibly be provided by government.

The approach taken is to draw on the existing support and knowledge of the sector and build on work already undertaken. The elements of the methodology are:

• Focused research to identify and define the gaps in what has already been collected, • Targeted consultation to drill deeper into identifying the needs of the PPEs and what

services and resources could assist in meeting these needs, • A structured approach with the Project Working Group to reach a clearly articulated

agreed position on the key problems and benefits to be addressed by the business case, and the most effective delivery model to support the PPEs that will assist in business growth and development.

As such, it included the active oversight and input of a Project Control Group comprising State and Local Government representatives, and local industry representative, and input at key times from a Technical Working Group, comprising eight leading PPE owners in the region. These leaders were selected based on their diversity of background, for instance, in terms of product ranges, business approaches, business development stage and collaboration within the sector.

The key elements of the consultation methodology were:

• Gaining a strong overview through discussion and information exchange at the inception meeting on 28 May 2018.

• Weekly updates and discussions with the project manager. • Provision of draft material for review and feedback to Hepburn Shire Council and the

Project Control Group. • Distribution of a survey through Hepburn Shire Council, designed with the input of the

Project Control Group and the Technical Working Group, to gather clearer information about on the industry.

• Workshops (3) with members of the Technical Working Group and representatives of the Project Control Group for development of the Investment Logic Map (ILM). The ILM provides the rationale for the business case and is based on strong evidence and knowledge of those involved in the sector.

Engagement Strategy overview Key elements of the engagement strategy are:

Confidential


28 May 2018– Inception meeting, providing a strong overview through discussion and information exchange

Commencing 28 May 2018 - Secondary research and preliminary issues identification

15 June 2018 – On-line survey distributed

19 June 2018 – ILM workshop

24 June 2018 – Survey closed

28 June 2018 - Draft report for Phase 1 Understanding premium produce enterprises in the Hepburn Shire submitted

9 July 2018 – Presentation of draft ILM to Technical Working Group

11 July 2018 – Workshop with Project Control Group to further develop ILM

17 July 2018 – Submission of updated report for Phase 1 Understanding premium produce enterprises in the Hepburn Shire

Interviews / phone calls

• Sarah Saxton, Agribusiness Support Officer, Mornington Peninsula Shire Council

• Follow up phone calls with selected PPE representatives • Alexandra Lobb, Axil Allen consultants (one of two firms engaged by the Department of

Economic Development, Jobs, Transport and Resources to advise on the first stage of delivering the Victorian Artisanal Agriculture and Premium Food program).

Confidential


Prep Prep Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13

14-May 21-May 28-May 4-Jun 11-Jun 18-Jun 25-Jun 2-Jul 9-Jul 16-Jul 23-Jul 30-Jul 6-Aug 13-Aug 20-Aug

DeliverableSurvey 1

sentSurvey 1 received

Draft Phase One report del ivered (28 June)

Survey 2 sent (4

July)

Survey 2 received (11 July)

Fina l Phase One report and Draft Bus iness Case (17

July)

Final Business

Case by 26 July

CHRP by 10 August

Meetings 28 May Inception

Select PPEs 14 June Reg Assembly

19 June ILM

(3 July - cl ient bri fing PCG on Phase 1 report)

9 July - present to tech

working group to fina l i se the ILM

Mon 23 July - Overview of solution to

PPE Technica l Working Group)

Project s tart-up

Inception meeting ∆Research (i s sues and barriers )Consul tation - selected PPEs (phone)Consul tation - survey 1 sent ∆Consultation - survey 1 received ∆Regional Partnerships Assembly ∆Analyse consul tation findings

Preparing Phase 1 report

Draft Phase 1 report del ivered ∆Provide overview of Phase 1 report

Review Phase 1 report feedback

ILM Workshop Prep

ILM Workshop ∆Analyse s trategic options to address problems and benefi tsFina l Phase 1 report ∆

Research del ivery options , including governance and funding s trategyConsul tation - selected PPEs (prel iminary thoughts - phone)Consul tation - surveys sent (del ivery approach)

∆

Prel iminary recommendations

Consul tation - survey received (del ivery approaches)

∆

Analyse consul tation and research findings

Preparing Bus iness case and fina l i s ing updated Phase 1 report

Presentation of proposed solution to PPE Technica l Working Group

∆

Draft Business Case ∆ ∆

Review feedback and finaliseFull Business Case (final) ∆

PHASE 2: Delivery options

Client

Phase 1: Background Research and Consultation

Confidential

Hepburn Shire Hub for Premium Produce Business Case Version 1.3 final

68

Appendix B - Lessons from other locations

Throughout Australia and the world there are regions known for the quality and volume of their food products. There are other locations where, despite the natural or economic attributes, the opportunities to meet the needs of consumers and develop the food sector are not well developed. There are a number of different approaches undertaken, which have lessons for this project.

An overview of the different approaches is provided below.

Food clusters

Food Innovation Australia Limited (FIAL), an independent body funded through the federal government, announced funding for four food cluster projects in June, with the aim to assist developing new knowledge and capabilities; product development, assist in private and public investment, amongst other aspects. These tend to be generated through industry collaboration, drawing in support and work from the academic sector and different branches of government. They therefore tend to support reasonably mature sectors, both operationally and in terms of integration and collaboration.

The projects funded are:

• Fermentation Tasmania (FermenTasmania), an existing cluster located in Hobart, Tasmania, to support enterprises involved in fermented food, drinks and other products to: develop and grow their product range, innovate, build know-how through training and access new business to consumer opportunities.

• The East Gippsland Food Cluster, an established cluster, will be working with Agribusiness Gippsland to deliver a suite of projects that will enhance regional capability, align regional initiatives and enhance partnerships to drive economic growth in the region. There will be a particular focus on leveraging global agri-food insights to drive value adding, collaborative on-line trading platforms, and raising brand awareness of the region whilst protecting provenance through intelligent traceability technologies.

• The Food and Agribusiness Network (FAN), a mature cluster located in Woombye, Queensland, focused on delivering new programmes and services for its diverse members and creating the platforms for collaboration in addressing the shared challenges and opportunities of the region.

• Central Coast Industry Connect, a new cluster located in Ourimbah, New South wales seeks to give the region a clearer identity and to grow the current food and beverage sector. They will achieve this by bringing industry, research organisations and government together to work collaboratively, upskilling local SME’s and create more local employment.

Food hubs Food hubs are locations where producers, processors, wholesalers and consumers can meet. These tend to have a focus on efficiencies and cost saving through collaborative distribution and

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.fermentasmania.com_&d=DwMFaQ&c=Qznq1V5e4u04CfMRj920aPtDqN4RUEToMeZ6oK6t9iY&r=rYe-DMeMR9toSsm4N0STEXmaqW7ocigbOL8BbfZe86w&m=JJW4vfcY4PYAsleaMjMd37Q_tAYu0paOh6TlGMGz6aE&s=o17BLHtgS5FvS2Uxt8Gd4LRpUuyFsDqJBccGj4Flj2M&e=

https://urldefense.proofpoint.com/v2/url?u=http-3A__www.eastgippslandfoodcluster.com.au_&d=DwMFaQ&c=Qznq1V5e4u04CfMRj920aPtDqN4RUEToMeZ6oK6t9iY&r=rYe-DMeMR9toSsm4N0STEXmaqW7ocigbOL8BbfZe86w&m=JJW4vfcY4PYAsleaMjMd37Q_tAYu0paOh6TlGMGz6aE&s=UIcIGeSiiHvOGSVnuSz5X41qU1qEQVQuXSJ5hFICGQ8&e=

https://urldefense.proofpoint.com/v2/url?u=https-3A__foodagribusiness.org.au_&d=DwMFaQ&c=Qznq1V5e4u04CfMRj920aPtDqN4RUEToMeZ6oK6t9iY&r=rYe-DMeMR9toSsm4N0STEXmaqW7ocigbOL8BbfZe86w&m=JJW4vfcY4PYAsleaMjMd37Q_tAYu0paOh6TlGMGz6aE&s=9dETK_5pIo_YPmqZYcIyFi0ANHydUUU6LImnlmR6-6s&e=

https://urldefense.proofpoint.com/v2/url?u=https-3A__centralcoastindustryconnect.com.au_&d=DwMFaQ&c=Qznq1V5e4u04CfMRj920aPtDqN4RUEToMeZ6oK6t9iY&r=rYe-DMeMR9toSsm4N0STEXmaqW7ocigbOL8BbfZe86w&m=JJW4vfcY4PYAsleaMjMd37Q_tAYu0paOh6TlGMGz6aE&s=9o1TiAwGercoZK7cwa_7KtqCgaqpfUDTk91oPH_LE4s&e=

Confidential


69

wholesaling / market approaches. One hub in Victoria (Casey), as well as the Wangaratta and Bendigo hubs which are under consideration

Within Victoria, Casey’s Food Hub is operating successfully, and considerations for the development of hubs in Shepparton, Bendigo, and Wangaratta are underway.

Specific programs or support mechanisms • The Michigan Good Food Initiative – coming together with a holistic purpose of

developing and implementing specific goals for Michigan’s food system that promoted equity, sustainability and a thriving economy across the State. In 2009, three organizations – Michigan State University Center for Regional Food Systems, the Food Bank Council of Michigan, and Michigan Food Policy Council came together with a holistic purpose of developing and implementing specific goals for Michigan’s food system that promoted equity, sustainability and a thriving economy across the State. The issues covered by the group included measures to support the producers and processors, as well as addressing and simplify the supply chain. There is scope for further interrogation of elements of their approach, as detailed on their site and numerous reports49.

• Larger, purpose built organisations established by state governments - for example, the Western Australian Premium Food Centre, located south of Perth, has been established to identify markets for premium agrifood products and assist businesses statewide to upscale and coordinate production and promotion of high value, low input products. The scale of support provided, however, while useful, tends to be focused toward the larger businesses which are seeking broader national and international export growth50.

• Honing in on the elements within the infrastructure supply or value chain where greatest value could be derived for the good food industry has been one area of focus for Michigan Food Industry. The report identifies some approaches which could warrant further investigation.

• Regulatory reform and streamlining processes are underway across the state, including within the planning sector. The outcomes from the Victorian Artisanal Agriculture and Premium Food program, once finalised and publically accessible, should provide clearer pathways for a range of support measures. In addition, FoodPrint Melbourne released a report on 18 July 2018, identifying a suite of measures that need to be further explored to support local food producers. A series of workshops will commence shortly with local government and other organisations, to determine the most effective approaches to further progress51. One initiative that seems particularly relevant is the approach that the Victorian Department of Economic Development, Jobs, Transport and Resources (DEDJTR), through its retail regulatory reform options for small businesses. 52

49 Michigan Good Food Initiative, 2018

50 Western Australian Premium Food Centre, 2018

51 Carey et al. 2018 52 Nous Group, 2017

Confidential


70

• Exploring and identifying some potential financial opportunities within Agricultural sector, as identified in within the StartupAUS report53.

Government enabling programs Whittlesea Council has an Agribusiness officer. The role focuses on developing agricultural skills more so than business development and capacity development. There are some elements that are applicable to the issues raised by the PPEs:

• Advice to businesses - discuss your potential business or the issues affecting your existing enterprise, with a free on-farm consultation

• Development of Land Capability Assessment Maps, in partnership with Deakin (I imagine a version of the one prepared for the Central Highlands?)

• Farmers market feasibility assessment • Provision of a quarterly newsletter for rural residents • Information sharing –

o stories of 3 profitable small-scale farmers making the most of their farming operations (note – all from Hepburn Shire) and potential of alternative food distribution models and connecting the farmer direct to the customer (Kirsten Larkin)

o List of local produce suppliers o Sustainable land management approaches, drawing on the assistance of

Sustainable Land Management Officers • Rates rebates to responsible land managers and farming businesses and discounted

farm rate for properties that classified as farmland. • Advocacy (esp including the land use changes at state government level)

Mornington Peninsula Council is the main driver, with a number of partners taking on different roles, to continue to develop the sector. It has decided to prioritise local food production to support diversity, being a key element of the Peninsula in terms of ‘economic values (proximity to large consumer and sales base), cultural impact, opportunities to improve environmental footprint and provides an incomparable landscape as a backdrop. This focus commenced in 2010 (first agricultural sector audit undertaken, identifying the local food element) and an ongoing role has since been created. In addition, it is supported by a Land care officer component, funded through Western Port Catchment management over the past three years (with a potential for extension).

The program has delivered:

• 2010 Agricultural Audit – undertaken to develop a better understanding of the scale and diversity of agricultural production systems. The aim of the project was to gather data that would better describe the location, type and size of rural industries that reside within the shire

• Local Food Strategy (2013) – Developed to develop awareness, industry connections and branding strategy to promote Mornington Peninsula Food within the industry and to the general public.

• 2014 Agricultural Audit – updates the 2010 audit, sets the framework and focus for the shire’s Rural Business Officer to develop a workplan and engagement strategy.

53 StartupAUS, 2017

Confidential


71

• Information / brochures regarding the importance of agriculture, advice for specific sectors and responsibilities of land management, as well as farm gate locations

• Website link to other relevant information (limited content) • Establishment of the Industry reference group - supported by council’s Economic

Development Unit staff and resources to implement agreed actions within the Local Food Strategy, focusing on food industry capacity and connectivity activities, implementing a Provenance program i.e. Certified Trade Mark (CTM) for businesses to align with and for consumers to identify food of the Mornington Peninsula; and an industry and consumer driven awareness campaign to build the profile of Mornington Peninsula food.

• Input into projects such as

o Evidence to support the ‘Linking local people to local food’ initiative; o Evidence to support the establishment of the MPS Small Rural Landholder Network; o Data input into the Peri-urban Agricultural land mapping project; o Victorian Food Alliance ‘Know your food bowl’; o The MPS Equine Industry Audit; o The MPS Interim Green Wedge Management Plan, Agriculture & Rural Land

Management actions; and o 2014-2017 Economic Development Strategy.

Confidential


72

Appendix C - Background consultation from Central Highlands Regional Partnership

The following is a summary of the transcripts provided by Regional Development Victoria from the following events:

1. 2016 Central Highlands Partnership Regional Assembly

2. 2017 Collated findings from the Deep Dive session and identification of 2017 /18 priorities

3. 2017 Feedback from Industry

4. Notes from informal discussions with Advisian consultants at the 2018 Central Highlands Partnership Regional Assembly

5. Central Highlands Regional Assembly 15 Nov 2016

Issues and solutions identified by the Central Highlands Regional Assembly include:

• “Young professional [sic] from agribusiness would love to return to region but find it hard to find jobs”

• “Red tape”

• “Regulations are conflicting against one another”

• “Value of farmland – is becoming too high”

• “Land values- based on development rather than farm land”

• “Revenue raising by LGAs based on residential development”

• “Recruit[ment] issues in ag sector and youth employment sector – farmers are viewed positively in Australia but farmers could do with more PR, issues with no one wanting to be farm hands”

• “Most of the produce moves out of the region to be value added”

• “Hobby farmers pushing price up – large farms being reduced, residential use of farm land”

• “We don’t promote our region well enough”

6. Agriculture and Environment Deep Dive Problem Outcome Actions

Final recommendations from the Deep Dive relevant to PPE Hub include:

• “Raise awareness of services available” • “Implement Line of sight [sic] strategy” • “Development of industry body… industry funded peak body” • “Develop forum of service delivery agencies to enable better collaboration for farm

businesses”

Confidential


73

• “Increase local and State Government connection”

7. 2017 Feedback from Industry regarding a Premium Produce Hub

Issues and solutions identified from community feedback to the Premium Produce Hub proposal include:

• “…marketing and getting the product to people is the hard, exhausting part”

• “What do you think are the barriers stopping small-medium businesses developing new products/services in the premium food sector? Logistics and marketing”

• “… ways are there to overcome the barriers? CSA’s [sic], buying groups and marketing service providers”

• “Assistance with marketing, simplified logistics, scaling up and planning”

• “We need assistance making things happen, and information that is clear, concise and easy to understand”

• “When we were setting up our business, there was no one place to go to navigate the rules, tap into mentors, understand what hoops we had to jump through, around our business”

• “Council [sic] were very rule orientated, but not helpful with practical real life examples”

• “We just needed a clear path on what we needed to do to obey the rules, while starting our business”

• “Access to customers/markets… Uncertainty of sales when relying on things like farmers markets… stock level management”

• “Limited access to boutique food processing suppliers… There is one chicken abattoir in the state that processes small farmers. The cost is really high”

• “Cost and complication around distribution”

• “Difficulty doing everything with small budget and no resource”

• “Access to business planning”

• “It would be super useful to have tools available to plan for business costs and profit”

8. Notes from informal discussions with Advisian consultants at the 2018 Central Highlands Partnership Regional Assembly

Several primary producers had their wares on display between 4.30 and 5.30pm at the Regional Assembly. These included fruit and vegetable, eggs, and beef producers, as well as processors (fermenters). Some had operated for many years, and some were recent entrants.

The comments in this page were collected from very brief, informal discussions. We noted a range of aspirations for their businesses. Some were focused on expansion in terms of scale and market reach, some were looking to expand within a market locally, some were looking to diversify, and some were more focused on maintaining their

Confidential


74

current small scale. All referenced the importance of living a sustainable lifestyle in terms of the impact to the land, and the contributing to the local area.

The following barriers and opportunities were noted:

Finance, particularly short-term finance:

• Challenging to access short-term finance of sufficient amounts as the expenses, and the revenue, can be fairly ‘lumpy’ at different times of the year (i.e.. need quick cash injections to buy large volumes of produce when it is available. however there is not necessarily collateral to borrow against).

Government assistance

• Hard to tap into, and be aware of opportunities

• The opportunity cost of missing funding options - example given of Fermentasmania, which has the financial support of the Tasmania Government, and recently received matching funding of $800,000 from the Commonwealth Government’s Food Innovation Cluster’s National Cluster Grant program.

• Navigating the approvals process – Best Eggs pointed to this as a key issue (the Nous report provides a good basis for unpicking this).

Business management and promotion

• Demonstrating the value of higher cost produce - how to sell the value? E.g. Best Eggs sells for $9 per dozen).

The importance of informal relationships and networks, and how this could be improved

• Connecting producers and processors - Finding producers who can supply the volume needed at the right time (some say the industries are too small, some say too large).

• Distribution outside the region is expensive due to small volumes. This can be positive in generating cohesion in the area (e. g. The Fermentary, who live in Melbourne, transport their supplies via refrigerated truck and have an arrangement with others in the region to transport some of their goods once or twice a week to Melbourne. Collective arrangements can work, however not everyone has the connections / the scale, or frequency, or reliability may not be sufficient / the cost to transport for individual businesses adds too much to the individual costs.

• Negotiating between organic and conventional farmers who may be adjacent – Florian has a good arrangement with his neighbours regarding spraying, for instance, however not everyone is the same (it is on a case by case basis).

Confidential


75

Appendix D: Investment logic map and concept brief

Overview

On 19 June, Advisian facilitated a modified Investment Logic Mapping session with members of the technical working group and state / council officials, over a four-hour period.

The workshop focused on better understanding of the issues (problems) experienced by PPEs and the potential responses to overcome these. The workshop was run over a four-hour period, and provided the basis for a rich set of information. The information collected enabled the development of preliminary problem statements and a framework for the preparation of strategic responses.

A further session was held on Monday 9 July, 2018, between 4-6pm. The following issues were identified from these two sessions.

Key issues identified

An initial summary of the key issues, or themes, we heard is listed below:

• A range of issues relating to planning and other regulatory challenges • Often a misfit between incentives from all levels of government and how well the PPEs suit these

incentives (as one example, many grants are targeted to export markets). • The absence, or inadequacy of key infrastructure, particularly those needed for processing or

value adding (for example, abattoirs, dairy processing, and boning rooms). • Challenges of achieving desired strategies in getting to market (effective farm gate approaches, as

one example), building stronger networks, • Implications of competing or incompatible land uses, including land prices, conflicts between

neighbouring properties due to issues such as amenity concerns, and so on.

In more detail, the following topics were covered:

1. Planning and other Regulations - Complex regulatory frameworks due to definition issues (what is an artisanal producer, and what are their needs?), one issue sparks another (in terms of compliance complaints, enforcement issues and so on), with the regulatory requirements not well considering:

• Whether the amount of paperwork and evidence is suited to scale of operation • Impact to expansion potential • Food regulations - Health and Safety, supermarket requirements, and Primesafe, as one

example referred to often, not suited to oversee, for instance, sites which act as distribution points solely.

2. Increasing numbers of lifestyler owners / occupants have an impact on: • Property prices, council (land use classifications and the considerations for farming rate

concessions) and water rates • Limiting access to land • Expansion barriers • Need for approvals (for instance, use as a café, intensity of uses, multiple uses)

3. Access to water, and cost

Confidential


76

• not levied relative to consumption, or scale of operation. This makes it extremely costly).

9. Centralisation of value chain infrastructure is a concern in some locations • Lack of abattoirs requires long travel times and additional costs – plus, Labour costs to

use the few remaining (abattoirs are very expensive for small sized animals – charged the same for a duck or a cow)

• Centralisation means vulnerability if the remaining businesses close • Lack of other infrastructure within the region – examples given include chillers,

processing plants, grain mills, dairy processing, boning rooms, commercial kitchens, • Viability being threatened • Small PPEs are very exposed to this – due to costs, barriers to new businesses, etc.

10. Business model – Getting to market • Farm gate businesses – time to run the farm gate, paying staff, branding and marketing. • Spending all their time and energy on farming, no time for business. Lots of good ideas

but need the resources to facilitate • Cost of labour • Lack of ‘business’ skills

11. Government support is often not well targeted: • No government template for PPEs – the support approaches (from grants, industry

programs, training and similar support) tend to be focused on the export market, with an expectation of a certain turnover, and a positive impact in direct employment growth.

• Artisanal PPE is larger than this Shire, or the Region – do we need to be constantly focused on a competition model? Collaborative effect of working collectively could be more effective.

12. Access to capital • High barriers to entry – difficult / impossible to get insurance, loans are hard to get –

financial institutions prefer scale

13. Broader societal impacts • Local economy benefits with the need for food security, as well as healthy food option • Want region to maintain access to their own food • Connections between processors and producers are limited due to time constraints • High barriers to entry for young people – need to ensure we are growing the next

generation. Currently there are no clear pathways, and limited education to effectively start and develop as a PPE (reference to courses in Riverina and Charles Sturt university, but not locally)

The following problems were initially identified (and subsequently refined) -

• Problem 1 - Scale inappropriate regulatory requirements and risk perceptions are threatening the viability of Premium Produce Enterprises and limiting access to capital.

• Problem 2 - Increasing lifestylers and competing land uses are increasing costs and are raising the barriers for existing and new PPEs.

• Problem 3 – Centralisation of ownership of value chain infrastructure is hampering the economic and social potential of the Hepburn region.

Confidential


77

Confidential


78

Appendix E – PPE Networks, Associations and Accreditations

Accreditation

Within Survey one, the following organisations were identified as organisations that PPEs had either gained certification or accreditation from, or were in the process of doing so.

Australian Certified Organic (ACO): 6 PPEs

One of a small number of certif icating organisations registered with the Australian government to be certif ied to ensure products have been grown and processed at least to the levels set within the National Standard for Organic and Biodynamic Produce (a minimum standard) , which enables the products to be sold within Australia badged as ‘certif ied organic’. For international sale, other countries may have higher standards across some attributes – different certif ier standards address different market needs.

The Standard is upheld by regular and random annual audits of certif ied organic companies and products holding organic certif ication.

National Association for Sustainable Agriculture Australia (NASAA) Certified Organic (NCO): 2 PPEs

One of a small number of certif icating organisations registered with the Australian government to be certif ied to ensure products have been grown and processed at least to the levels set within the National Standard for Organic and Biodynamic Produce (a minimum standard) , which enables the products to be sold within Australia badged as ‘certif ied organic’. For international sale, other countries may have higher standards across some attributes – different certif ier standards address different market needs.

The Standard is upheld by regular and random annual audits of certif ied organic companies and products holding organic certif ication.

From Captains Creek website –

Victorian Farmers Market Association (VFMA) Accreditation: 3 PPEs

Accreditation permits the business to supply accredited farmers’ markets with fruit & vegetables, meat, seafood and dairy, eggs, honey and plants.

Separate accreditations also exist for value-added produce such as sausages, cheese, olive oil (etc.) or non-food products such as leather or wool, respectively.

http://staging.austorganic.com/clients/




Confidential


79

Food processors can also seek accreditation to sell their value-added produce at accredited farmers’ markets.

Assessment process for each is “rigorous” and “complex”, and has been approved by the ACCC.

Accreditation seeks to assure farmers’ market consumers that “the person they are transacting with is the person who grew or made the produce”. VFMA “advocates best practice and celebrates the work of genuine farmers, speciality makers and farmers’ markets.”

Australian Tourism Accreditation Program (ATAP) Accreditation: 2 PPEs

Meet specific criteria regarding tourism standards, “ensuring they are committed to exceeding your expectations with great customer service and the highest standards of business practice”

The program prioritises: Quality, Reliability, Customer Service, Advertising accuracy, Sound environment practices, Appropriate licensing, Adherence to a Code of Ethics

Pasture Raised on Open Fields (PROOF) Accreditation: 2 PPEs

This is a program to certify free range status of pastured eggs, pork, chicken, beef and lamb from animals that have been raised on pasture in open fields. The focus is on farm management of livestock, including:

• Unrestricted daytime access to actively managed, pastured range areas • Environment that encourages purposeful use of said areas

It requires livestock to be able to remain outdoors unless they choose to seek shelter from inclement weather, require veterinary treatment or similar for the benefit of the animal.

Australian Bio-Dynamic Research Institute Accreditation: 1 PPE

This is a trademark that reflects producers meeting exacting quality standards regarding the application of the bio-dynamic method, as underpinned by the National Standard for Organic and Bio-Dynamic Produce.

The general principles include:

• The production of food of high nutritional value • The enhancement of biological cycles in farming systems • Maintaining or improving fertility of soils • Working as far as practicable within a closed system by minimising the use of non-

renewable resources • The avoidance of pollution resulting from agricultural practices and processing • The co-existence with, and the protection of, the environment.

This is an internationally recognised accreditation (including by the EU Organic Regulation Requirements).

The following are only held by the one PPE business

Hazard Analysis & Critical Control Points (HACCP) Accreditation:

Confidential


80

Food Safety management accreditation

Meat & Livestock Australia (MLA) Livestock Production Assurance (LPA) Accreditation:

Accreditation to ensure livestock producers abide by MLA Rules and Standards regarding

• Farm risk assessment • Treating animals safely and responsibly • Managing pasture and fodder treatments • Preparing animals for dispatch • Documenting livestock transactions and movements • Maintaining biosecurity practices • Adhering to animal welfare practices

Membership and networks

A number of PPEs identified their membership in groups such as the following:

• AFSA (Australian Food Sovereignty Alliance) – also includes Fair Food Farmers united • Australian Pastured Poultry Producers • Demeter (biodynamic company) - A Farming Method delivering high quality produce

through enhanced organic practices. • Breed associations (unspecified) and specific produce associations (ie. Truffle growers

associations). • Membership with Australian Organic Farmers (linked to a distribution collective, the

Organic Farm Gate, based on Queensland. This is derived from Wombat Farm Organics site)

• Daylesford Macedon Produce (DMP), an active collaboration between the vignerons, cooks, restaurateurs, publicans, provedores, suppliers and growers of Daylesford and the Macedon Ranges region

In addition, a number noted their participation in the following food network initiatives: • Participant in the Hepburn Wholefoods Collective (a membership approach, where

annual payment allows access to purchase). • Participant in the local division of local organic deliveries, doorstep organics (and it

appears, a number of similar, collective distribution organisations) • Food Box Schemes, provided for a range of purposes – for those relocating or in specific

need, or a distribution approach by local businesses • Participation in one or more of four farmers’ markets within Hepburn Shire • Competing in product awards and events (delicious Magazine Produce Awards, Royal

Agricultural Show of Victoria's Royal Melbourne Fine Food Awards, Feast & Forage, Plate up Ballarat and events throughout the year listed on the Cultivate Agribusiness Central Highlands Inc (Cultivate), website and the Daylesford Macedon Ranges festivals and events page

• Cultivate’s Food Loop program, which connects up producers, processors and consumers • A number of Community-supported agriculture (CSA) enterprises which involves a

membership model to help fund the business model and in return, the member receives a component of the produce generated.

Confidential


81

Smaller, more informal networks across a range of innovation areas, such as new farming models (addressing the needs of higher value, intensive farming practices), the importance of local provenance, traditional process techniques and limited / no waste food preparation.

In addition, the importance of low cost, easy access information (industry subscriptions, online courses or information) and benefits in contributing in research programs were mentioned.

Confidential


82

Appendix F - References

Agriculture Victoria, 2018 Growing Victoria's artisanal agriculture and premium food sector (from website) http://agriculture.vic.gov.au/agriculture/food-and-fibre-industries/artisanal-agriculture Australian Bureau of Statistics 2016, 2016 Census. Carey, R., Sheridan, J. and Larsen, K. (2018) Food for thought: Challenges and opportunities for farming in Melbourne’s foodbowl Centre for Regional and Rural Futures, Deakin University, 2016, Central Highlands: Regional Agricultural and Biodiversity Climate Adaptation and Opportunities Plan --- Final Report City of Greater Geelong 2018, Draft Settlement Strategy. Colmar Brunton, 2015, Daylesford & Macedon Ranges RTB. Market Research & Gap Analysis. Department of Economic Development, Jobs, Transport and Resources, 2018, Regional Jobs and Infrastructure Fund Department of Environment, Land, Water and Planning, 2017, Victoria in Future – Hepburn Shire Grains Research and Development Corporation, 2017, GRDC Organisational Performance Research - 2017 Grower Survey Report Growing Change et al, 2015, Greater Bendigo Food Hub: A Feasibility Study for the establishment of a regional food hub in Bendigo – Draft for Community Review REMPLAN, 2018, Hepburn Shire Agricultural Profile La Trobe University, Bendigo, 2010, The Impacts of a Localised Food Supply: What is the evidence? McKinna et al, 2014, The Food and Beverage Growth Plan – Melbourne’s North, Melbourne’s Northern Economic Wedge Inc McKinna et al, 2016, City of Ballarat and Central Highlands Councils Agri-Industries Line of Sight and Strategic Plan: From farm Gate to the world’s plate Michigan Good Food Initiative, 2018 (from website - http://www.canr.msu.edu/michiganfood/) Nous Group, 2017, Making it easier to do business in Victoria Regional Development Victoria 2017, Regional Jobs and Infrastructure Fund. Resilient Melbourne, 2016, Resilient Melbourne: Full Strategy

http://agriculture.vic.gov.au/agriculture/food-and-fibre-industries/artisanal-agriculture

http://agriculture.vic.gov.au/agriculture/food-and-fibre-industries/artisanal-agriculture

http://www.canr.msu.edu/michiganfood/

Confidential


83

StartupAUS, 2017, Powering Growth: Realising the potential of AgTech for Australia State of Victoria, 2016, Food and Fibre Sector Strategy: Victoria’s Future Industries Weller, S. and Argent, N (2018), from The Conversation,’ Royal commission shows bank lenders don’t ‘get’ farming, and rural economies pay the price https://theconversation.com/royal-commission-shows-bank-lenders-dont-get-farming-and-rural-economies-pay-the-price-99086 Western Australian Premium Food Centre 2018 (from website https://www.agric.wa.gov.au/westernaustralianpremiumfoodcentre).

https://theconversation.com/royal-commission-shows-bank-lenders-dont-get-farming-and-rural-economies-pay-the-price-99086

https://theconversation.com/royal-commission-shows-bank-lenders-dont-get-farming-and-rural-economies-pay-the-price-99086

https://www.agric.wa.gov.au/westernaustralianpremiumfoodcentre

Confidential


84

Appendix G – Online Survey questions

Hepburn Shire Council Survey

Survey for Agricultural Producers in the Hepburn Shire On behalf of the Central Highlands Regional Partnership, Hepburn Shire Council is undertaking the production of a Business Case to deliver support services to Premium Producers in the Central Highlands region. Central Highlands Regional Partnership is one of nine such Partnerships across the state, established by the Victorian Government, recognising that local communities are in the best position to understand the challenges and opportunities faced by their region. Through the Partnership Assemblies, the local community has identified as a priority the need to improve the support and services to our premium produce enterprises across the region. With the support of Agriculture Victoria, Hepburn Shire Council is leading this priority on behalf of the Central Highlands Regional Partnership. Hepburn Shire Council is keen to start by understanding what people working in this sector need to help their businesses grow, transition and develop in a way that suits their goals. Hepburn Shire Council recognises that producers, growers, farmers, food processors, food purveyors, and the wider agricultural community are an essential part of what makes Hepburn Shire so unique. Council has engaged Advisian as consultants to conduct this survey to inform the development of a model to deliver support services to assist the premium food industry. The survey covers several topics: the characteristics of your business, your current agricultural practices, options for supporting your business, and what drives your goals for your business. By completing this survey, you will be providing very useful insights that will help us support agriculture in the Central Highlands. The survey should be quite quick to complete. We appreciate your time. This survey is specifically canvasing in the views of people living or working in the Hepburn Shire. Agriculture Victoria is also conducting a broader analysis of the views of similar producers and growers across the state. The two studies are complementary and you may be invited to participate in both. This project is being supported by several premium producers in the Hepburn Shire who are members of the Project Technical Working Group. These producers are: Doug May- Captains Creek Organic Wines Tammi Jonas- Jonai Farms Adam Bremner- Wombat Forest Organics Edward Benedict- Adsum Farmhouse Ben Grounds- Vue de Vulcan Paul Righetti- Honest Eggs Danny Kinnear- Danny’s Farm Dick Koops- Country Cuisine

Confidential


85

Please complete the survey by Sunday 24 June 2018.

If you have any queries or would like to know more, please contact Amanda Western, Manager of Community Engagement, Hepburn Shire Council on 5321 6113 or [email protected].

Privacy Statement: Hepburn Shire Council is collecting personal information on this survey for the purposes of informing Council’s Agriculture Sector Development Plan and a Business Case for the development of support services for premium producers. The information will be used by Council and it’s appointed consultant for those purposes or directly related purposes only. Council collects personal information in accordance with the Information Privacy Principles as set out in the Information Privacy Act 2000, and as documented in our Privacy Policy, which is available publicly at our offices or from https://www.hepburn.vic.gov.au/hepburn/wp-content/uploads/2015/05/Policy30C-Privacy-Policy-16-09-2014.pdf

* 1. Which activities does your business/enterprise engage in? Please select as many options as is applicable.

Hay and Silage

Horticulture (including fruit/vegetable production)

Apiculture

Livestock (meat)

Livestock products (i.e. milk, eggs, wool)

Broadcare crops

Aquaculture

Viticulture

Value addition to local produce (i.e. jam, oil, leather)

Restaurant/cafe

Accomodation

Other (please specify)

* 2. Which of the following options describe your production system? Please select as many options as are applicable.

Traditional farming measures

Confidential


86

Conventional farming practices

Organic

Biodynamic

Regenerative principles

Free range

Open range


* 3. Which description best fits the development stage of your business/enterprise?

New entrant (within the last 12 months)

Developing

Growth phase (adding product, land or labour)

Transitioning (change of product, production method or succession planning)

Established (no plans for growth)

Established (plans for growth)


* 4. Please specify whether your business/enterprise has any certification or accreditation or if you are working towards accreditation. If your business does not have any special certifications or accreditations, please list as None.

* 5. Where do you see yourself and your business/enterprise in 5 years?

* 6. What motivates you to run your business/enterprise?

Confidential


87

* 7. Please specify the total agricultural property holdings (lease and freehold) of your business/enterprise in HECTARES. If you would rather not say, please state Rather Not Say.

* 8. Please select which of the following methods you have used to sell your products.

Farmers markets

Local retailers

Internet

Local co-op

Direct sale to local restaurants

Farm gate

Friends and family

Victorian wholesalers

Interstate wholesalers

Stock agents

Local saleyards

Export to international markets


* 9. How many people are employed by your business, including yourself?

* 10. Including yourself and your family members, approximately what percentage of the people employed by your business/enterprise live within the Hepburn Shire?

Less than 10%

10%-30%

30%-50%

Confidential


88

50%-75%

75% or above

I do not know

* 11. In the last 12 months, has your business/enterprise:

Employed an apprentice?

Employed a trainee?

Employed a Working Holiday VISA holder?

Hosted an internship?

Hosted a work experience?

Hosted an exchange program?

Delivered a training course?

Delivered/provided online training?

None of the above?


* 12. Does your household have an off-farm income?

Yes

No

* 13. Where do you currently source new information for your business/enterprise? Please select as many options as is applicable.

Paid consultant(s)

Local government services

Confidential


89

State government services

Commonwealth services

Local community organisation(s) (DMT, etc.)

Agricultural industry organisation(s) (VFF, Cultivate, Landcare, etc.)

Trusted individuals (neighbours, trusted expert, experienced farmer, etc.)

Local forums and workshops

Interstate or overseas experts

None


* 14. Please select the 3 most significant constraints you believe limit the growth and/or performance of your business/enterprise.

Difficulty improving productivity

Capital costs required to expand

Climate change

Pasture and environmental degredation

Difficulty accessing finance

Local, State and/or Commonwealth regulations

Difficulty accessing food processing services such as commercial kitchens, abattoirs, etc.

Commodity prices

Difficulty marketing products to consumers and new customers

Transport costs

Competition

Interest rates

Confidential


90

Rising price of agricultural land

Access to seasonal workers

Overall cost of labour

Sourcing skilled labour

Water availability


* 15. What support does your business need?

* 16. How beneficial would it be for your business/enterprise if you were offered support in business management and planning? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 17. How beneficial would it be for your business/enterprise if you were offered support in marketing? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 18. How beneficial would it be for your business/enterprise if you were offered support in accessing finance/capital Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 19. How beneficial would it be for your business/enterprise if you were offered support in accessing land through innovative business structures/co-operative leases? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 20. How beneficial would it be for your business/enterprise if you were offered support in agricultural services related to productivity improvements? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 21. How beneficial would it be for your business/enterprise if you were offered support in environmental management? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


91

* 22. How beneficial would it be for your business/enterprise if you were offered support in logistics management? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 23. How beneficial would it be for your business/enterprise if you were offered support in accessing labour? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 24. How beneficial would it be for your business/enterprise if you were offered support in social media and online skills? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 25. How beneficial would it be for your business/enterprise if you were offered support in navigating Local, State and/or Commonwealth regulations? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

* 26. Please rank the following formats of assistance from 1 (most preferred) to 5 (least preferred).

Face-to-face meeting (one-on-one service)

Face-to-face meeting (you and a group of likeminded businesspeople)

Online (through live chat system such as Skype or a webinar)

Online (through an easy to use website portal)

Workshops/forums/functions

* 27. Do you have any further information you would like to provide to help understand the needs of your business/enterprise and areas of priority for support?

Confidential


92

* 28. If you would like to be kept informed on the progress of this project, please provide your name and email address.

Confidential


93

Appendix H – Collated Survey findings

Note that the responses to open-ended questions have not been listed within Appendix H to protect the confidentiality of respondents.

Q1: Which activities does your business/enterprise engage in? Please select as many options as is applicable.

Confidential


94

Q2: Which of the following options describe your production system? Please select as many options as are applicable.

Q3: Which description best fits the development stage of your business/enterprise?

Confidential


95

Q8: Please select which of the following methods you have used to sell your products.

Confidential


96

Q10: Including yourself and your family members, approximately what percentage of the people employed by your business/enterprise live within the Hepburn Shire?

Q11: In the last 12 months, has your business/enterprise:

Confidential


97

Q12: Does your household have an off-farm income?

Confidential


98

Q13: Where do you currently source new information for your business/enterprise? Please select as many options as is applicable.

Confidential


99

Q14: Please select the 3 most significant constraints you believe limit the growth and/or performance of your business/enterprise.

Confidential


100

Q16: How beneficial would it be for your business/enterprise if you were offered support in business management and planning? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Q17: How beneficial would it be for your business/enterprise if you were offered support in marketing? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


101

Q18: How beneficial would it be for your business/enterprise if you were offered support in accessing finance/capital Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Q19: How beneficial would it be for your business/enterprise if you were offered support in accessing land through innovative business structures/co-operative leases? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


102

Q20: How beneficial would it be for your business/enterprise if you were offered support in agricultural services related to productivity improvements? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Q21: How beneficial would it be for your business/enterprise if you were offered support in environmental management? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


103

Q22: How beneficial would it be for your business/enterprise if you were offered support in logistics management? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Q23: How beneficial would it be for your business/enterprise if you were offered support in accessing labour? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


104

Q24: How beneficial would it be for your business/enterprise if you were offered support in social media and online skills? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Q25: How beneficial would it be for your business/enterprise if you were offered support in navigating Local, State and/or Commonwealth regulations? Please rank on a scale of 1 (not beneficial at all) to 100 (extremely beneficial).

Confidential


105

Q26: Please rank the following formats of assistance from 1 (most preferred) to 5 (least preferred).

Confidential


106

growing the premium produce sector - shire of …...this business case summarises the key operating...

Documents