Indicators of success: case study of small and medium sized agribusinesses
Operational research project code: GIN 727
MAF Policy would like to test the hypothesis that current Small to Medium Enterprise (SME) definition and performance indicators are not directly applicable to agriculture, horticulture and forestry sector businesses. There are a number of possible reasons that this may be the case, including:
- the highly seasonal nature of agricultural and horticultural production cycles influences investment, capacity and profitability. Seasonality has created a degree of volatility not common in other industries;
- the homogeneous nature of commodity products and the biologically based nature of production may limit the potential for differentiation among primary businesses;
- higher capital requirements tend to influence industry structure and (in conjunction with other factors) may limit growth potential. There are differences across sub-industries and/or between (on-farm) production and manufacturing. International literature seems to support the notion that capital accumulation is less extensive in agricultural sectors which have lower levels of private sector research and development spending.
In developing a comprehensive overview of key indicators for relevant agricultural, horticultural and forestry sector businesses, a benchmark understanding should emerge. Analysis of this, in conjunction with a review of existing (international and domestic) SME policy literature, should enable testing for significant variations in sector performance under relevant SME models. Conclusions will be drawn regarding the suitability of current policy tools for the agricultural, horticultural and forestry sector SMEs, and what impact, if any, this will have on the development of future economic development policy tools in the sectors.
It is hoped that the research findings will challenge our current problem definition in relation to the impediments to increased rates of SME growth in the agriculture, horticulture and forestry sectors. Factors such as relative capital and skills constraints, levels of external control, levels of diversification, low levels of investment in research and development. This research may give new insights into other possible market failures or inadequacies in the provision of information and services and what this means for government activity aimed at increasing the SME performance.
Contact:
Amanda Tullet
Tel: 03 358 1860
Email: amanda.tullet@maf.govt.nz
Contact for Enquiries
Manager, Innovation Policy
Ministry of Agriculture and Forestry
MAF Policy
PO Box 2526
Wellington
New Zealand
Tel:+64 4 894 0618
Fax:+64 4 894 0741
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