Mallee Sustainable Farming 2010 Annual Report
2010
2010 Annual Report
Dynamic, profitable and sustainable farming Mallee Sustainable Farming 2010 Annual Report
2010
Mallee Sustainable Farming thanks the following Corporate Partners for their support Gold Level Partners Silver Level Partners Bronze Level Partners www.msfp.org.au 1 Mallee Sustainable Farming 2010 Annual Report
2010
Contents OVERVIEW 3 STRATEGIC PLAN 2010 ‐ 2012 4 CHAIRMAN’S REPORT 6 EXECUTIVE MANAGER’S REPORT 7 MSF BOARD 8 MSF STAFF 12 MSF STRUCTURE 12 PROJECT OVERVIEWS 13 FINANCE AND AUDIT COMMITTEE REPORT 17 FINANCIAL STATEMENTS 18 Income Statement for the Year Ended 30 June 2010 18 Balance Sheet as at 30 June 2010 19 Statement of Changes in Equity for the Year Ended 30 June 2010 20 Cash Flow Statement for the Year Ended 30 June 2010 21 Notes to Financial Statements for the Year Ended 30 June 2010 22 Statement by Members of the Board 28 Independent Auditors Report 29 MAJOR FUNDING AND RESEARCH PARTNERS
31
This publication has been prepared by Mallee Sustainable Farming (MSF) Inc. on the basis of information available at the date of publication without any independent verification. Neither MSF Inc. or its editors, nor any contributor to this publication represents that the contents of this publication are true or accurate or complete; nor does MSF Inc. accept any responsibility for errors or omissions in the contents, however they may arise. Readers who act on this information do so at their own risk as soils and environment across the Mallee can vary significantly and information presented in this publication should be viewed in consideration of local conditions. www.msfp.org.au 2 Mallee Sustainable Farming 2010 Annual Report
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Overview Mallee Sustainable Farming (MSF) Inc. is a farmer driven organisation servicing the < 350mm rainfall Mallee cropping regions of New South Wales, Victoria and South Australia. MSF operates within a region of over 7 million hectares extending beyond Balranald in the east to Murray Bridge in the west. The Mallee has approximately 1500 dryland farming families whose farming activities include cropping (wheat, barley, vetch, lupins and canola) and livestock (sheep for wool, lambs and cattle for meat). MSF delivers research and extension services for low rainfall dryland farmers. MSF was established in 1997 to investigate and assist farmers in implementing technological advances towards best management practice. Since then, the profitability of dryland farming in the Mallee has also increased significantly as have the environmental and social gains. www.msfp.org.au 3 Mallee Sustainable Farming 2010 Annual Report
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Strategic Plan 2010 ‐ 2012 During the latter part of 2009 MSF directors and staff undertook a review of its strategic plan, vision & mission statements and values. OUR VISION Dynamic, profitable and sustainable farming OUR MISSION Provide excellence in research, development and extension initiatives for the dryland Mallee of South Eastern Australia PRINCIPAL PURPOSE To protect and enhance the natural environment by the encouragement of sustainable dryland farming practices OUR VALUES Creativity and Innovation Honesty and Integrity Professionalism Collaboration Credibility Accountability Dignity and Respect Fairness and Impartiality www.msfp.org.au 4 Mallee Sustainable Farming 2010 Annual Report
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OUR STAKEHOLDERS
1. OUR FARMERS AND
THEIR COMMUNITIES
OUR GOALS
We will
1.1 Promote proven innovation and
build community capacity
OUR STRATEGIES
We will
1.1.1 Implement a program to reinvigorate state
reference committees
1.1.2 Ensure quality control and risk management
assessment on all research projects and
programs
1.1.3 Implement a proactive extension and information
plan;
1.1.4 Build MSF’s agronomic capacity and profile
1.1.5 Respond to a demonstrated need for community
capacity building initiatives where MSF is able to
deliver outcomes
1.2 Research improved dryland
farming systems
1.2.1 Generate increased opportunities for farmer
directed participation in MSF R, D & E activities
1.2.2 Investigate farming system options to address
issues in sustainable dryland farming
2. THE ENVIRONMENT
2.1 Be an environmentally
responsible organisation
2.1.1 Investigate farm management options to tackle the
environmental challenges for sustainable dryland
farming
2.1.2 Provide credible representation of dryland farming
issues
2.1.3 Build our capacity to be a credible information and
referral source on environmental and natural
resource management issues relevant to Mallee
dryland farming
2.1.4 Pursue Environmental Organisation Registration
2.1.5 Develop and implement an MSF Environmental
Management System
3. OUR PARTNERS AND
FUNDERS
3.1 Be a professional organisation
that delivers value to our
partners, funders and members
3.1.1 Identify and develop strategic alliances which
demonstrate specific and measurable benefits for
Mallee farmers
3.1.2 Demonstrate excellence in compliance and project
management systems
3.1.3 Develop and implement a stakeholder
engagement strategy
4. OUR ORGANISATION
4.1 Be responsive, accountable and
financially viable
4.1.1 Grow the MSF business by incorporating new
activities, building alliances and applying
economic efficiencies
4.1.2 Implement and maintain sound governance, policy
and risk management practices
4.1.3 Review resource arrangements for research,
development and extension delivery
www.msfp.org.au 5 Mallee Sustainable Farming 2010 Annual Report
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Chairman’s Report
T he only constant is change it is often, and correctly, said. This will be my last report as Chairman and I have seen many ebbs and flows in both the industry, and farming systems groups such as MSF during my 8 years as chair and vice chair. We have seen a reduction in state agency resources and we can not depend on them as much as we have in the past. Changes in investment strategies with more focus on research rather than on ground development & extension funding, have made the adoption of and adaptation to new methods and practices more difficult to communicate to farmers. There has been a steady increase in the use of private agronomy services by Mallee farmers over recent years which was quite rare only ten years ago. This trend presents an opportunity perhaps for farming systems groups to share their learning’s and knowledge through a different and additional medium. This trend towards more collaborations and alliances continues. Having been a part of the SA AG Excellence Alliance for some years now it is pleasing to finally see the establishment of the Victorian Grower Group Alliance with the support of GRDC and Vic DPI. I look forward to seeing greater sharing of ideas, information and resources between the group members. be more efficient and effective for ourselves, our funders and our members. A new Victorian director in Ron Hards joined the Board in 2009 and took on the role of Treasurer and the NSW and Victorian state reference committees are close to reforming as a vital link for farmer input into MSF activities in those states It has been quite a challenging year for the new Executive Manager, staff, Board and committees, and the work and leadership in these roles now sees MSF with a much sharper focus on diversifying and expanding income streams as well as minimizing and controlling costs. I really do appreciate the understanding of the Board and the dedication that our Executive Manager has shown in adapting MSF to be in a position to continue, and improve upon, the important work it performs for farmers across the tri‐state Mallee. Jim Maynard Chairman Mallee Sustainable Farming Inc. Discussions continue with a number of organisations and groups from around the region on how we can help each other and www.msfp.org.au 6 Mallee Sustainable Farming 2010 Annual Report
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Executive Manager’s report
M allee Sustainable Farming Inc. (MSF) has had, like Mallee farmers, quite a tough time during the last 12 months. Another disappointing finish to the cropping season and grain prices for farmers was mirrored by a continual reduction in agricultural RD&E funding and support by both state and federal agencies. Quite a contrast to the start of this season being one of the best ever with near record grain prices. The closure of the Mallee Research Station at Walpeup saw the end of decades of trials and demonstrations that have helped Mallee farmers be more sustainable in the low rainfall zone across SA, NSW and Vic. MSF established two of its own new field sites involving all of the major research partners in the SA‐Vic region including SARDI, Vic DPI, CSIRO, PIRSA and the University of Adelaide. MSF has also established new research trials at Walpeup in 2010 following the withdrawal of Vic DPI from the site The Board and staff spent time revising and refreshing the strategy for MSF and took this opportunity to update our Vision, Mission and organisational values. This has led to a more concise and easy to read, understand and implement strategy we hope will see MSF continue to deliver its vision of “Dynamic, profitable and sustainable farming” well into the future. Some staff changes over the last year have been the trigger to look closely at what we do, how we do it, and how can it be done differently or better? Some of these questions have been answered and some remain to be so. In any case there have been some changes to our website look and feel, a new format for our email and newsletter communications and the introduction of a revised corporate partner program that GrainASSIST, LawrieCo, Viterra and Rabobank have all become a part of this year. The project delivery work both directly, and with collaborating partners, for GRDC, DAFF FaCHSIA and the SAMDBNRM Board as examples, continues to provide on the ground RD&E outcomes for all Mallee farmers. Some new projects this year with the Mallee Catchment Management Authority and the Woolworths Landcare Fund have provided opportunities for MSF to prove its capability in other sustainable farming areas that we have not previously been involved with. My thanks go to the hard working and dedicated staff, committee and Board members. They share a passion for the industry, its people and their communities across the tri‐state Mallee and without their efforts and input MSF just would not be. Recognition also to all MSF members, research & funding partners, trial site farmers and business, and corporate partners for their contribution and support that is essential to the successful operation of a farming system group. Mike Mooney Executive Manager Mallee Sustainable Farming Inc. www.msfp.org.au 7 Mallee Sustainable Farming 2010 Annual Report
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MSF Board Current Directors Jim Maynard (Chair) Appointed: 2004 Jim Maynard has spent his working life developing Kerribee Station, NSW, a family owned property, which was begun by his father in 1932. During Jim’s time, Kerribee has evolved from being a sheep station to producing sheep, beef and wheat. Jim and his son also have a property at Manangatang, Victoria. The knowledge Jim has gained from being involved with MSF has been applied to his properties. Jim as been active in many organisations including the Rural Lands Protection Board, the Lower Murray Darling Catchment Management Authority, the Rangeland Management Action Plan and the Western Lands Advisory Council. He is currently the Region Chairman of the Westerns Division of the NSW Farmers Association. In 2001 Jim was invited to join the Board of Mallee Sustainable Farming Inc, has been Chair since 2004, Chairs the Executive & Financial Capability Taskforce committees as well as being a member of the Finance & Audit, RD&E and Communication & Membership committees. Ian Hastings (Vice Chair) Appointed: 2009 Ian Hastings is a fourth generation farmer operating the 4,000 hectares in a family business around the Ouyen area (Victorian Mallee). He has been active in many agricultural organisations including being the current President Victorian Groundsprayers Association and the Grains Council of Australia. He is a past President of the VFF Grains Group and served on the VFF Board of Management from 2003‐2007. Ian also contributes substantially to the local community holding positions such as President of the Local RSL sub‐branch and Ouyen Show Committee member. Ian was an inaugural Board Member of Mallee Sustainable Farming Inc in 1998 and remained the Victorian farmers’ representative until 2002. He re‐joined the Board in 2008 becoming Vice Chair in 2009 and is a member of the Executive, Finance & Audit and Communication & Membership committees. www.msfp.org.au 8 Mallee Sustainable Farming 2010 Annual Report
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Paula Gordon (Secretary) (Invited Specialist) Appointed: 2001 Paula Gordon was invited onto the Mallee Sustainable Farming Inc Board in 2001 as a specialist with experience in communications, rural community development and policy. Paula brings to the Board extensive experience in rural community development, rural policy and communications at a regional (Mallee), State, tri‐state and Commonwealth level. A teacher and sociologist by training, Paula has held positions largely in the Victoria public service in such areas as community services, and agriculture and natural resource management. Paula has an interest and experience in risk management and building farmer resilience in times of change having been involved with the establishment of the first Rural Financial Counselling Service in Australia, and then later with the Mallee Crisis Committee Victoria. Paula is currently retired, operating a vine nursery and citrus property in a family partnership at Trentham Cliffs, NSW, and applying biological farming methods. Paula is a member of a number industry organisations associated with sustainable farming in the Mallee including the Vine Industry Nursery Association, Sun Cancer Resources Committee and Mallee Catchment Management Authority Drought Coordinating Committee. She is a Director of the Murray Valley Citrus Board, President of the Trentham Cliffs Landcare Group and a Director of the Mallee Catchment Management Authority. www.msfp.org.au Ron Hards (Treasurer) Appointed: 2009 Ron Hards began share farming in the Millewa area of North West Victoria in 1978. In 1988 Ron bought his first farm at Yarrara, Victoria, where he began spray fallowing and reduced tillage practices. In 1998 Ron’s son Nick, under took a farm apprenticeship at Longerenong College and joined Ron in farming at Yarrara. In 2001 Ron bought his second farm next door to the farm at Yarrara. In 2002 Ron and Nick began converting their plant from reduced tillage to no till. In 2006 Ron bought their third farm bringing the total to 2,800 hectares. Ron has been associated with many organisations such as the Millewa Carwarp Landcare group where he held the role of President for 6 years from 1987‐1994. From 1989–2006 Ron was involved with the VFF Grains Council. From 1999–2003 Ron held the position of President of the Grains Council of Australia and was also on the Farrer House Board for 4 years. From 2004 to 2006 Ron joined the Grain Corp Board. He also has been involved with the Grain Growers Association for 2 years, 1 year as President in 2004/05. In October 2009 Ron joined the Board of Mallee Sustainable Farming Inc taking on the role as Treasurer and Chair of the Finance and Audit Committee. Ron is also a member of the Executive, Financial Capability Taskforce and RD&E committees. 9 Mallee Sustainable Farming 2010 Annual Report
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Glynn Schmidt (Director) Appointed: 2006 Glynn Schmidt has been farming at Low‐Bank near Waikerie in South Australia since 1962. Low‐Bank is predominantly a sheep and cereal property of 9,200 hectares. Glynn has been involved with the Murray Mallee Soil Board, the Board of Management of the Wanbi Research Centre and the South Australian No Till Farming Association. He is a life member of the Low‐Bank and Districts Agricultural Bureau having been Chair of this group for a number of years. Glynn joined the Mallee Sustainable Farming Board as SA director in 2006 and is a member of the RD&E committee. www.msfp.org.au Rick Llewellyn (Invited Specialist) Appointed: 2006 Rick Llewellyn was invited to the Mallee Sustainable Farming Inc Board as an invited specialist and provides scientific expertise to Mallee Sustainable Farming. Rick has been a Director since 2006. Rick attained a Bachelor of Agricultural Science from the University of Adelaide, followed by a PhD from the University of Western Australia. Rick previously worked at the University of Western Australia as a lecturer in Agricultural Systems and Extension where he also conducted research into weed and herbicide management and was on the management committees of two Western Australia‐based grower group networks which aimed at developing links between scientists and grower groups. Rick has been with the CSIRO since 2005 working as a Senior Research Scientist in Farming Systems based at the Waite Campus. He currently leads several farming systems research projects including the Mallee GRDC Water Use Efficiency project, the CRC Future Farm Industries EverCrop and Adaptability projects and has continuing research developing strategies for greater adoption of key farming systems innovations. Invited as a specialist in 2006 Rick is a member of the RD&E committee. 10 Mallee Sustainable Farming 2010 Annual Report
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Darren Nitschke (Director) Tim O’Halloran (Director) Appointed: 2007 Tim O’Halloran runs a mixed farm at Tylden, 30km north east of Balranald, NSW. Tylden has been in the O’Halloran family since 1925. Until 1980, Tylden was predominately a grazing farm but since then a gradual transformation to Poll Merinos and grain growing has occurred. In more recent years Tim has adopted biological farming methods. Tim has been an active member of the community for many years including Captain of the local Rural Fire Service for 20 years, member of the NSW Farmers Federation for 30 years, has been a part of the Rangelands Management Action Plan committee for 3 years as well as a life member and Secretary of the Homebush Recreational Reserve Trust. Tim also has skills as a professional Wool Classer and is a Justice of the Peace. Appointed: 2008 Darren is a third generation farmer who has been farming at Nadda, South Australia for the past 12 years. The property is predominantly grain and sheep and for the past 6 years Darren has been practicing no till. Darren is an active member of many organisations in the Loxton area. He was President of the Loxton Cricket Club, involved with the Browns Well Football Club and participates in the annual Loxton Show as a Steward in the wool section and a judge of junior grain and fodder. He is a member of SANTFA and the Browns Well Ag group. Darren has been on the Mallee Sustainable Farming Inc South Australian State Reference Committee and has been a Director since 2008. Tim has been a NSW farmer representative on the Mallee Sustainable Farming Inc Board since 2007. Retiring Directors Grant Gibbins Victorian Director from 2007 until 2009 Roy Latta Specialist Director from 2006 until 2009 www.msfp.org.au 11 Mallee Sustainable Farming 2010 Annual Report
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MSF Staff Mike Mooney Executive Manager Kathryn Kenny Project/Extension Donna Robertson Finance/Admin Michael Moodie Agronomist Previous MSF staff during 2009/2010 Ian Ballantyne Allison McTaggart Carly McGlashan Karla Fox Victoria Adams Joint Executive Manager – until August 2009 Joint Executive Manager – until August 2009 Administration Officer ‐ until September 2009 Administration Officer ‐ September 2009 until January 2010 Communications and Liaison Officer – until March 2010 MSF Structure DRYLAND FARMING COMMUNITY IN THE MSF REGION
NSW State
Reference
Committee
VIC State
Reference
Committee
SA State
Reference
Committee
MSF Board
6 elected (2 x 3 States) &
up to 4 invited specialist
directors
Executive Manager
Committees
y Executive y Finance & Audit
y Communications & Membership
y RD&E
Finance/Admin
Project/
Extension
Agronomist
www.msfp.org.au 12 Mallee Sustainable Farming 2010 Annual Report
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Project Overviews SAMS (Sustainable Agriculture in the Mallee of South Australia) Increasing adoption of sustainable farming and risk management in the SA Mallee Locations: Loxton, Pinnaroo, Geranium, Cambrai, Wanbi, Waikerie, Karoonda, Swan Reach, Nildottie Funding Bodies: National Landcare Program/Caring For Our Country Research/Extension Partners: SA Dept. of Water, Land and Biodiversity Conservation, Rural Solutions SA, SA MDB NRM Board, SA No‐Till Farmers Association and CSIRO Sustainable Ecosystems, Urrbrae This project is building on the previously NLP funded ‘Building the capacity of land managers to improve dryland farming practices and enhance agricultural sustainability in the SA Mallee’. It focuses on implementation of new findings and issues, targeting specific areas of poor participation and tackling farm business risk management dealing with seasonal variation and climate change. Water Use Efficiency Water use efficient farming systems for the Mallee Locations: Karoonda, Waikerie, Ouyen, Natya, Merbein, Chinkapook, Cowangie, Loxton, Paringa, Lameroo. Funding Bodies: GRDC, CSIRO Research/Extension Partners: CSIRO Sustainable Ecosystems – Urrbrae, Rural Solutions SA, Vic DPI, Mallee Focus. This project aims to improve whole‐farm water use efficiency and profitability across 7 million hectares of the Victorian, South Australian and NSW Mallee region. It targets two major avenues to further improve future average whole‐farm water use efficiency across the Mallee: 1. address challenges to sustainability i.e. grass weed problems, disease, high fertiliser costs; 2. develop and adapt new strategies for improved water use efficiency for a wider range of soils and farming systems. A major component of the project is the spatially designed on‐farm field trials. These trials aim to test the water use efficiency, productivity and risk of a range of continuous cereal systems, and the decisions around inputs, timing, agronomy and potential break crop options across soils of differing potentials. To add value to the field trials, simulation modeling (APSIM & Yield Prophet) will be used to test strategies and recommendations for longer‐term and broader ranging scenarios. Project Overviews cont’d… www.msfp.org.au 13 Mallee Sustainable Farming 2010 Annual Report
Soil Carbon and Ground Cover Improving knowledge of soil carbon levels and ground cover in the Victorian Mallee Locations: 30 farm properties across the Victorian Mallee. Ouyen and Werrimull trial sites. Funding Bodies: Mallee Catchment Management Authority Research/Extension Partners: Vic DPI, CSIRO, Mallee Focus This project has two parts covering:‐ a) the quantifying and classifying of soil carbon in Mallee soils, and b) improved cereal variety options for increased ground cover. Part a) will measure the quantity and type of soil carbon that is present in Mallee soils, in two management practices over a large area. The dataset will assist the CMA, landholders, researches and farm consultants to determine if improved farm management practices are improving soil health. The data will help landholders and consultants make better nutrient management decisions leading to improved soil health and reduced erosion. Part b) will demonstrate to landholders how cereal cultivars with short and long growing seasons respond when grown over different lengths of the growing season, and how these varieties can be managed to enhance production and protect the soil from erosion. The adoption of improved intensive cereal rotations will reduce the incidence of wind erosion through more reliable biomass production and therefore more consistent groundcover. www.msfp.org.au 2010
Strengthening Our Communities To form partnerships to tackle local problems and formulate local initiatives, identify and deliver local projects Locations: 11 small communities across the tri‐state Mallee region Funding Bodies: Department of Families, Housing, Community Services and Indigenous Affairs Research/Extension Partners: Focus Consulting This project has been designed to build on local ingenuity and partnerships to tackle local issues and formulate positive local initiatives which will support the individual, the family and the wider farming community. Small communities were identified across the Mallee with most having fewer than 500 inhabitants. Meetings, workshops and lunches were organised whereby the facilitator explained the program and helped the group to develop a community plan of action with the allocation of resources of up to $5,000 to implement the activities. In this third year of funding, 11 community clusters were funded along with a regional farming workshop on drought and climate change, and a South Australian project to enhance the skills of farmers to handle soil and drought conditions. The activities can be summarized across six broad categories: •
•
•
•
•
•
Skill development /improving farming Celebration, community events, and networking Improving community infrastructure ‐ meeting places, halls etc Beautification of public areas Improved sport and recreation Health 14 Mallee Sustainable Farming 2010 Annual Report
Project Overviews cont’d… Tractor Exhaust The impacts of tractor exhaust injection on wheat growth and yield in South Western New South Wales Locations: Trentham Cliffs, NSW Funding Bodies: Lower Murray Darling Catchment Management Authority Research/Extension Partners: NSW Department of Industry & Investment, Vic DPI, Mallee Focus, Daniel & Ian Linklater After an initial demonstration project in 2008 this project was implemented in 2009 to more rigorously investigate the effect of tractor exhaust injection on the growth of cereal crops in the Mallee region of southern New South Wales. A paddock scale, replicated experiment was established to test four treatments. The treatments were: •
•
•
•
Control ‐ No fertiliser and no exhaust No fertiliser and exhaust injected Fertiliser applied and no exhaust Fertiliser applied and exhaust injected Each treatment was replicated six times in a randomised block design. The trial showed that the injection of exhaust did not improve or compromise crop production relative to the control. However, injecting exhaust while simultaneously applying fertiliser did initially reduce crop growth. In this season and on this soil, the crop was unresponsive to the application of fertiliser except for a small, significant increase in grain protein. 2010
Mallee Dryland Soil Health Monitoring Program Establish benchmarks of current soil health indicators to report against trends. Locations: Benchmark sites at Cowangie and Chinkapook, 80 focus sites across the North West Victorian Mallee. Funding Bodies: Mallee Catchment Management Authority Research/Extension Partners: Vic DPI, Mallee CMA The intended outcomes of this project will improve knowledge on soil health indicators and interactions with Land Management Plans. The outcomes of this project will provide the Victorian dryland Mallee with soil health information on which to develop and report against benchmarks and targets. Data will also be used to inform the region in the proposed development of the Mallee Soil Health Strategy. www.msfp.org.au 15 Mallee Sustainable Farming 2010 Annual Report
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Project Overviews cont’d… Training & Demonstration of Precision Agriculture in Practice Locations: Ouyen, Merbein South, Paringa, Loxton, Natya & Lameroo Funding Bodies: GRDC, SPAA EverCrop & EverCrop Decide Locations: Werrimull and Waikerie Funding Bodies: Future Farm Industries CRC & CSIRO Research/Extension Partners: Rural Solutions SA Research/Extension Partners: CSIRO, Rural Solutions SA, SAMDBNRM Board, Vic DPI. Increasing costs of inputs including phosphorus and nitrogen fertiliser, fuel and some herbicides has increased growers’ focus on more efficient use of these inputs to reduce costs. Farming systems in the mixed farming zone of Australia that are highly reliant on annual cropping, face a number of soil, biological, economic and climate related threats. The increasingly apparent impacts of some of these factors (eg. high input costs, degrading soils, climate and weeds) are driving many farmers to reassess the sustainability of their current systems and consider new options to increase the diversity and adaptability of their farming systems. Precision Agriculture (PA) tools have been identified as a method for achieving these improvements in efficiency. PA tools may also deliver productivity gains to the grains industry by targeting inputs to areas of greatest need and the targeted amelioration of some soil constraints. Despite this, the adoption of PA beyond guidance has been low, at less than 10% of growers. The objective of this project is to increase the level of adoption of PA beyond guidance by broadacre grain growers. Specifically it aims to increase the level of adoption of variable rate by growers in the project by 30% by 2013. Greater use of perennials has the potential to address a number of current and future production and sustainability challenges in cropping‐based zones across Australia. The EverCrop project will identify and develop the role and management of perennials in mixed farming systems across the Mallee. www.msfp.org.au 16 Mallee Sustainable Farming 2010 Annual Report
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Finance and Audit Committee Report
While the 2009/10 financial year has been a difficult one, this result was not unexpected. In June 2009 several long standing projects came to an end, projects which had provided the income that sustained the operations of MSF for a number of years. This situation coincided with a time where the Executive Manager position was vacant, with the basic duties being performed by contract staff. At this time there was limited focus on generating new research projects or on seeking corporate sponsorship, new members and other income generating opportunities. With the new Executive Officer commencing in August 2009 there was a renewed emphasis on rebuilding the income base of the organisation. A large number of funding submissions were written and considerable effort was put into working with the MSF stakeholders and funding partners seeking sources of additional funding. In addition, the cost structure was reviewed to reduce or, where possible, eliminate discretionary expenditure. While the benefits of this effort were not realised immediately, over the second half of the 2010 financial year the financial performance of MSF began to gradually improve. This provided hope that the financial result expected (and ultimately realised) in the 2009/10 financial year could be turned around. Financial reporting systems were refined and improved allowing the financial www.msfp.org.au position to be effectively monitored on a timely basis. Extensive use was made of the budget and detailed financial projections as financial management tools. This information provided the confidence required for the Board to continue to support the effort to turn the organisation around. The budget process for 2010/11 was commenced in April 2010 and as new projects were added it became clear that with this additional income the fortunes of MSF could be considerably improved. The final budget projects a deficit for the 2010/11 year of under $30,000, which is a welcome and very necessary improvement on the 2009/10 result. Furthermore, while results for the year to date in 2010 continue to track better than the budgeted, a break even result for the current year remains a possibility. The Board remains positive about the future financial prospects of MSF. However, the hard work is not over yet. There will be a continued emphasis on increasing the revenue base and effective financial management in the future. Ron Hards Treasurer Chair, Finance & Audit Committee Mallee Sustainable Farming Inc. 17 Mallee Sustainable Farming 2010 Annual Report
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Financial Statements
Income Statement for the Year Ended 30 June 2010 Note
2010 $ 2009
$
Revenue from Ordinary Activities
2
734,282
1,226,641
Less: Expenditure on Ordinary Activities
Research, development and extension expenses
Employee expenses
Other expenditure on Ordinary Activities
Depreciation expense 3
3
3
3
(576,394) (217,917) (199,035) (20,915) (668,094)
(295,372)
(266,224)
(19,131)
(279,979) (22,180)
Surplus from ordinary activities before income tax
Income tax expense relating to ordinary activities
Net deficit from ordinary activities after income
tax expense attributable to the association
1(g)
‐ (279,979) ‐
(22,180)
www.msfp.org.au 18 Mallee Sustainable Farming 2010 Annual Report
2010
Balance Sheet as at 30 June 2010 Note
CURRENT ASSETS
Cash and cash equivalents
Receivables Prepayments
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Plant and equipment TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Unrecognised project income
Payables
Employee benefits TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Employee benefits TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY Retained surplus General reserve
TOTAL EQUITY 2010 $ 2009
$
4
5
6
252,469
28,370 6,320
287,159
484,155
170,087
5,137
659,379
7
31,303 31,303 318,462
39,773
39,773
699,152
1(f)
8
9
169,951
45,488 4,152
219,591
258,078
59,704
2,520
320,302
10
‐ ‐ 219,591
98,871 ‐
‐
320,302
378,850
78,871 20,000 98,871 308,850
70,000
378,850
1(h)
www.msfp.org.au 19 Mallee Sustainable Farming 2010 Annual Report
2010
Statement of Changes in Equity for the Year Ended 30 June 2010 Note
Retained Surplus
Retained Surplus
2009
2010
$
$
2009 $ 2010 $ 401,030
(22,180)
‐
378,850
308,850
(279,979)
50,000
78,871
331,030
(22,180) ‐ 308,850
70,000 ‐ (50,000) 20,000 Total
Total
2010
$
Balance, at beginning of year
378,850
Surplus (deficit) from ordinary activities (279,979)
Transfer to (from) reserves
1(h) ‐ Balance, at end of year 98,871
General Reserve
General Reserve
2009
$
70,000
‐ ‐ 70,000
www.msfp.org.au 20 Mallee Sustainable Farming 2010 Annual Report
2010
Cash Flow Statement for the Year Ended 30 June 2010 Note
CASH FLOW FROM OPERATING ACTIVITIES
Operating grants received Receipts from sponsorship and other income
Interest received
GST Refunded
Payments to suppliers and employees
GST Paid
Net cash used in operating activities
2010 $ 16(b)
790,388
33,873 6,701
33,384 (1,083,587)
‐ (219,241) 2009
$
1,121,830
40,203
32,672
‐
(1,463,338)
(4,591)
(273,224)
CASH FLOW FROM INVESTING ACTIVITIES
Payment for plant & equipment Net cash used in investing activities
(12,445) (12,445) (24,788)
(24,788)
Net decrease in cash held for the year
(231,686) (298,012)
Cash at beginning of year 484,155
782,167
252,469
484,155
Cash at end of year
16(a)
www.msfp.org.au 21 Mallee Sustainable Farming 2010 Annual Report
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Notes to Financial Statements for the Year Ended 30 June 2010 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This financial report is a special purpose financial report prepared in order to satisfy the financial reporting
requirements of the Associations Incorporation Act (Vic). The Board has determined that the
association is not a reporting entity.
The financial report has been prepared in accordance with the requirements of the Associations
Incorporation Act (Vic) and the following Australian Accounting Standards:
AASB 101:
AASB 107:
AASB 108:
AASB 110:
AASB 1031:
Presentation of Financial Statements
Cash Flow Statement
Accounting Policies, Changes in Accounting Estimates and Errors
Events After the Balance Sheet Date
Materiality
No other applicable Accounting Standards, Urgent Issues Group Consensus Views or other alternative
pronouncements of the Australian Accounting Standards Board have been applied.
This financial report is prepared on an accruals basis and is based on historic costs and does not take into
account changing money values or, except where specifically stated, current valuations of non‐current assets.
The following material accounting policies, which are consistent with the previous period unless otherwise
stated, have been adopted in the preparation of this financial report.
(a) Plant & Equipment
Each class of plant and equipment is carried at cost. The depreciable amount of fixed assets is
depreciated over their expected useful lives commencing from the time the asset is held ready for use.
(b) Rounding
Amounts shown in the financial report are in whole dollars unless otherwise stated. Amounts have been
rounded up or down to the nearest dollar.
(c) Goods & Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense.
Receivables and payables in the Balance Sheet are shown inclusive of GST.
(d) Cash
For the purposes of the statement of cash flows, cash includes cash on hand and in at call deposits with
banks or financial institutions, investments in money market instruments maturing less than three months,
net of bank overdrafts.
www.msfp.org.au 22 Mallee Sustainable Farming 2010 Annual Report
2010
Notes to Financial Statements for the Year Ended 30 June 2010 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Employee Benefits
Provision is made for the association's liability for employee benefits arising from services rendered
by employees to reporting date. Employee benefits expected to be settled within one year together
with entitlements arising from wages and salaries and annual leave which will be settled after one
year, have been measured at the amounts expected to be paid when the liability is settled plus
related on costs. Other employee benefits payable later than one year have been measured at the
present value of the estimated future cash outflows to be made for those benefits.
Contributions are made by the association to an employee superannuation fund and are charged as
expenses when incurred.
(f) Revenue
Project funding which arises from contractual relationships for the provision of agricultural research and extension and rural community development services is recognised initially as a liability, unrecognised project income. Project funding is then brought to account as income progressively as services required under project contracts are delivered. Surpluses arising from projects are recognised when they are reasonably assured, usually near the end of the project, while deficits are recognised as they become apparent. Revenue from the provision of other services is recognised upon the delivery of those services to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
(g) Income Tax
Mallee Sustainable Farming Inc. is a not for profit community based organisation which is exempt from income tax. (h) General Reserve
The Board has resolved to create a general reserve from the retained surplus to set aside sufficient funds to cover the costs of a managed winding up Mallee Sustainable Farming Incorporated should that eventuality ever become necessary. It is the Board's intention that this reserve should be backed by liquid funds or investments at all times. www.msfp.org.au 23 Mallee Sustainable Farming 2010 Annual Report
2010
Notes to Financial Statements for the Year Ended 30 June 2010 2010 $ 2009
$
NOTE 2: REVENUE Operating activities:
‐ project funding 694,988
1,147,617
6,701
7,325
25,268 39,294 32,672
33,593
12,759
79,024
734,282
1,226,641
Research, development and extension
576,394
668,094
Employment Expenses
217,917
295,372
Communication
Board Expenses
Insurance Other Administration Total Administration Costs
22,968 26,647 7,844
141,576
199,035
41,728
19,662
7,876
196,958
266,224
Depreciation Expense 20,915 19,131
1,500
‐ 1,500
2,000
3,054
5,054
53 252,416
‐ 252,469
89
284,066
200,000
484,155
28,370 ‐ ‐ 28,370 147,773
524
21,790
170,087
Non‐operating activities
‐ interest received ‐ sponsorship
‐ other revenue Total Revenue
NOTES 3: EXPENSES Remuneration of auditor (included in Other Administration above)
‐ audit or review services ‐ other services
Total remuneration
NOTE 4: CASH AND CASH EQUIVALENTS
Cash on Hand Cash at Bank
Cash on Deposit
NOTE 5: RECEIVABLES
Trade Debtors
Interest Receivable GST Receivable
www.msfp.org.au 24 Mallee Sustainable Farming 2010 Annual Report
2010
Notes to Financial Statements for the Year Ended 30 June 2010 2010 $ 2009
$
NOTE 6: PREPAYMENTS Prepaid Insurance 6,320
6,320
5,137
5,137
NOTE 7: PLANT & EQUIPMENT Plant & equipment at cost
Less accumulated depreciation
63,557 (46,335) 17,222 60,063
(45,833)
14,230
Motor vehicles at cost Less accumulated depreciation
26,819 (12,738) 14,081 50,591
(25,048)
25,543
31,303 39,773
Motor
Vehicles
$
25,543
‐
‐
(11,462)
14,081
10,549
26,819
‐
(11,825)
25,543
(a) Movements in carrying amounts Balance, 1 July 2009
Additions Disposals
Depreciation expense Balance, 30 June 2010 Plant & Equipment $
14,230 12,445 (9,453) 17,222 Balance, 1 July 2008
Additions Disposals
Depreciation expense Balance, 30 June 2009 13,567 7,969
‐ (7,306) 14,230 2010 $ 2009
$
NOTE 8: PAYABLES Trade creditors and accruals
45,488 45,488 59,704
59,704
www.msfp.org.au 25 Mallee Sustainable Farming 2010 Annual Report
2010
Notes to Financial Statements for the Year Ended 30 June 2010 2010 $ 2009
$
NOTE 9: EMPLOYEE BENEFITS ‐ CURRENT
Provision for annual leave 4,152
4,152
2,520
2,520
‐ ‐ ‐
‐
NOTE 10: EMPLOYEE BENEFITS ‐ NON CURRENT
Provision for long service leave As there are no current staff members with more than one years completed service, no provision for long service leave has been made at 30 June 2010. Employment history indicates it is unlikely that current employees will become entitled to long service leave. NOTE 11: CONTINGENT LIABILITIES At 30 June 2010 the Board is unaware of any liability, contingent or otherwise, which has not already been recorded elsewhere in this financial report. NOTE 12: CAPITAL COMMITMENTS
At 30 June 2010 the Board is unaware of any capital or leasing commitments which hase not already been recorded elsewhere in this financial report. NOTE 13: RELATED PARTIES
(a) The following persons held office on the Board during the financial year and up to and including the date if this report ‐ Malcolm Maynard (Chairman) ‐ Roy Latta
‐ Rick Llewellyn
‐ Paula Gordon (Secretary)
‐ Ron Hards (Treasurer) ‐ Tim O'Halloran ‐ Grant Gibbons ‐ Darren Nitschke ‐ Ian Hastings
‐ Glynn Schmidt
NOTE 14: ASSOCIATION DETAILS The principal place of business of the association is:
Mallee Sustainable Farming Incorporated
Suite 2, 152 Pine Avenue Mildura Victoria 3500
NOTE 15: EVENTS OCCURRING AFTER REPORTING DATE
Since the date of preparation of this financial report, there have been no events occurring after reporting date which require specific disclosure. www.msfp.org.au 26 Mallee Sustainable Farming 2010 Annual Report
2010
Notes to Financial Statements for the Year Ended 30 June 2010 2010 $ 2009
$
NOTE 16: CASH FLOW INFORMATION
(a) Reconciliation of Cash Cash on hand
Cash at bank Cash on Deposit
53 252,416
‐ 252,469
89
284,066
200,000
484,155
(279,979) (22,180)
(b) Reconciliation of Net Cash provided
by Operating Activities to Result from
Ordinary Activities after Income Tax:
Deficit from ordinary activities after income tax
Non Cash Flows in Operating Result:
Charges to Provisions
Depreciation Sponsorship received in kind Changes in Assets & Liabilities: (Increase)/Decrease in receivables
(Increase)/Decrease in prepayments
(Increase)/Decrease in GST receivable
Increase /(Decrease) in creditors & accruals
Increase /(Decrease) in unrecognised project income
Net cash (used in) provided by operating activities
1,632
20,915 ‐ (4,828)
19,131
(10,000)
109,761
(1,183) 32,104 (14,216) (88,275) (219,241) (70,194)
(393)
(11,734)
(121,521)
(51,505)
(273,224)
(c) The association has no credit stand‐by or financing facilities in place.
(d) There were no non‐cash financing or investing activities during the period. NOTE 17: ECONOMIC DEPENDENCE Mallee Sustainable Farming Incorporated is dependent on agricultural research institutions for the majority of revenue used to operate the entity. Indications for the 2010/11 financial year (including the 2010/11 budget and operations since July 2010) are that this support is continuing. The entity continues to pursue further strategies which will diversify and expand its funding base. www.msfp.org.au 27 Mallee Sustainable Farming 2010 Annual Report
2010
Statement by Members of the Board The Board has determined that Mallee Sustainable Farming Incorporated is not a reporting entity and that this special purpose financial report should be prepared in accordance with the accounting policies outlined in Note 1 to the financial statements.
In the opinion of the Board the financial report:
1.
Presents a true and fair view of the financial position of Mallee Sustainable Farming Incorporated as at 30 June 2010 and its performance for the year ended on that date.
2.
At the date of this statement, there are reasonable grounds to believe that Mallee Sustainable Farming Incorporated will be able to pay its debts as and when they fall due.
This statement is made in accordance with a resolution of the Board and is signed for and on behalf of the Board by:
…………………………………………….
MALCOLM J. MAYNARD
CHAIRMAN …………………………………………….
RON HARDS
TREASURER Dated at Mildura this 13th day of October, 2010
www.msfp.org.au 28 Mallee Sustainable Farming 2010 Annual Report
2010
Independent Auditors Report www.msfp.org.au 29 Mallee Sustainable Farming 2010 Annual Report
www.msfp.org.au 2010
30 Mallee Sustainable Farming 2010 Annual Report
2010
Major funding and research partners
www.msfp.org.au 31