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by S.J. Chaffey & B.A. McGregor

May 2004

RIRDC Publication No 04/096  RIRDC Project No DAV 205A

Executive Summary
This study has been approached from the perspective that making the mohair enterprise more attractive to commercial farmers is a critical pathway to growth in the industry. Growth is defined as primarily more volumes of mohair moving through Australian supply chains. Other descriptions of growth related to a range of stakeholders are also defined.

Growth in the mohair industry could begin to occur rapidly if there was a doubling in the price of mohair. While this may be possible over the long term, given historic changes in demand in the textile fashion industry, it is the type of growth that is likely to attract opportunists into the mohair industry who are the first to abandon it when prices shift down again. This paper suggests the industry has the opportunity to better present its information and control the decision making process so that it can attract people who are likely to make a significant contribution to the medium to long term success of the industry.

Substantial growth in mohair production will come from farmers establishing large-scale enterprises on suitable land with appropriate farming systems. These people will judge the mohair enterprise based on its profitability and the extent of satisfaction they derive from the enterprise. Appealing to other motives will fail.

Attracting 10 people each year for the next ten years with a high compatibility rating for mohair production and who are willing and capable of building and sustaining a breeding female population of 300 or more animals, will contribute 200,000 kilograms of mohair and A$1.8m to the industry by 2013.

This will lift total production of mohair from 300 to 500 tonnes.

These people would make their investment decision based on the compatibility of the enterprise to their farm system, the technical, financial and market feasibility of the enterprise and its comparative advantage with other possible courses of action. They will be sceptical of information coming from within the industry that is not sufficiently supported by fact. Despite this they will form their opinions based on their own experiences, opinions of other farmers they respect and people that they regard as experts.

They will be sceptical of what they regard as a fringe industry run by people who do not farm in ways similar to them or live in environments in which they farm. Language or media that is not consistent with the language they are familiar with from other mainstream industries such as wool, lamb and beef will not positively influence their opinions.

The mohair industry has a wide range of information generated over many years ranging from introductory material to scientific reports. The current information packages offered by the industry to people inquiring about the enterprise are not sufficient for decision-making by people operating commercially large-scale farm businesses. The information assumes people are capable of, and willing to invest the time in finding sufficient information to make informed decisions about the enterprise.

Identifying the key features of the enterprise and discovering the benefits and working through the facts and fictions of the many objections they encounter about the goats are time-consuming tasks that many people would not embark upon.

 The following specific recommendations are made.
 

• Use the existing large-scale producers who are focused upon mohair and goat meat production as information generators for other interested people.
• Gather as much existing information on the industry and repackage it to enable people external to the industry to assess their compatibility to the mohair enterprise quickly.
• Establish a financial feasibility model and build in current and future benchmarking and financial data that exists in the industry that then allows people internal and external to the industry to test and discover enterprise feasibility under a wide range of sensitivities and scenarios in a safe, easy to use software environment.
• Implement a communication plan that uses existing information and people in the industry to develop a specific features, advantages and benefits package focused upon the wants and needs expressed by people unrelated to the mohair industry as outlined in this report.
• Control more steps of the investment decision-making process. This recommendation follows on from Cull (2001) where the reduction of ‘search costs’ and ‘thinking costs’ and the ‘reduction of time obsolescence costs’ were a benefit of industry conferences in conjunction with standard extension methods. That is, the industry conferences represented a greater control of the information dissemination process.


If these four areas can be improved then the mohair industry could work toward increasing its visibility to the broader rural community with greater confidence. Provided the mohair enterprise is attractive to commercial producers the successful combination of these activities are likely to lead to growth of mohair production in Australia. RIRDC and Mohair Australia are strongly encouraged to invest in the development of this commercial vision.
 

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Last updated: 31 May 2004
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