Decisions are made daily in a farming business. Some decisions relate to day-to-day operations, such as when to spread fertiliser or start harvest, selling weaners, and prioritising spraying jobs. This is operational decision making. Decisions made for the longer term of the business are strategic decisions and examples include deciding whether to invest in capital items, setting targets (such as return on investment and gross margin targets), and optimising labour use efficiency. Tactical decisions and plans are designed to achieve the longer term strategy, usually with a medium-term view (1-12 months). Examples of tactical decisions for a farming business might include scheduling of harvest around crop maturity, feed budgeting, or nutrient budgeting.
A tactical climate sensitive decision is on where the time frame is within the season and the ideal decision depends on the weather. Examples include nitrogen application rate, when to drain rice fields, whether to leave a field or fallow or plant cotton, and investing in additional harvest resources such as contracting.
Information from FWFA is most relevant to tactical or operational decisions, however, long-term or strategic decision making can be the most cost-effective way to manage extreme events. Examples include investing in hay making equipment and storage, planting shelterbelts, or altering the enterprise mix. Determining the costs and benefits of these decisions requires historical climate data and climate change projections on the frequency and severity of rare events. Historical climate data can be accessed via the Bureau’s website: Australia’s official weather forecasts & weather radar – Bureau of Meteorology. Under Our services, Climate and past weather, the rainfall and temperature records are available under Rainfall history and Temperature history.
Farmers deal with weather variability daily, influencing their operational decision making. This type of decision making is something we are more familiar (and comfortable) with, than those decisions around less frequent, but more impactful, extreme events. Working with a number of Research and Development Corporations (RDCs) as part of the FWFA project, the Bureau developed five tools to support short-term and medium-term decision making regarding extreme climate risks. As these tools focus on a seasonal timeframe, they are most suited to supporting on-farm operational and tactical decision making.
Figure 1. The three types of decisions (from Dairy Australia – Our Farm Our Plan)
Before you can use these tools effectively in your business you need to fully understand the operations and assets that can be affected by an extreme event. While we often focus on the risks of these events, it’s important to realise they may also create opportunities. Following are some examples of tactical decisions that can potentially mitigate these risks or capitalise on the opportunities. These are not designed to operate in isolation from a whole enterprise risk assessment and management plan, but rather to complement them.
Key message
- A tactical climate-sensitive decision is one where the time frame is within the season and the ideal decision depends on the weather.
- FWFA tools are best used to support tactical and operational decision-making for managing extreme weather events.