Get big or get out : is this mantra still appropriate for the new century?

Abstract

In the years up until the mid-1980s the statement Get Big or Get Out was frequently used when discussing the future of Australian farming, particularly in the broadacre sector. Many Australian farmers, with the help of their bankers, enthusiastically adopted this mantra and set about expanding the scale of their farm businesses as quickly as possible. Grain prices fell in 1985 and interest rates rose, resulting in many of these farms having high debt, low farm equity and poor debt-servicing capacity. It was to be the beginning of the end for some of these businesses. Many of the debt problems faced by farm businesses in the 1990s originated from farm expansion in the 1980s. This pattern of expansion followed by difficulty managing farm debt had been repeated many times over the past half century. Since the early 1990s much of the focus in Australian agriculture has been on improving farm business management, with most of this effort aimed at avoiding problems such as those mentioned above. The emphasis has shifted from Get Big to Get Smart. Nevertheless, in many cases farm businesses can enhance their economic viability in the long term by a well managed shift to a bigger operation - it can be Smart to get Big. This article draws on ABARE research to examine the relationship between farm size and farm performance in the broadacre sector of Australian agriculture.