The Impact of Sustainable Investments in Dairy Farming
Financial
Non-financial (Sustainability)
Sustainable is an investment discipline that considers the social, environmental and economic effect to generate long-term competitive financial returns and positive societal impact (Software, 2018). According to GSIA,sustainable investment takes 50% of all professionally managed assets (Aicd.companydirectors.com.au, 2018). That is to say, as the world’s first automated cow 3D scanner company, this impact investment we seek not only create a positive social and a financial return and environmental impact but also measuring the effects of both. Moreover, it is an additional approach to addressing social effects, includes working condition, products safety, and animals right, and in the same time, it helps out farmers to maximum profit, and the net revenue will increase 2% per year.
Figure 1 : Sustainability Strategy ( Aron, 2018)
Social
Social effects includes working condition, product safety and animal rights and so on, and this body scanner all can solve three problems at once
Firstly, 3D Scanner scans cow’s body temperature that takes body condition scores from the computing system to make sure staffs get the exact measurement of how effective feeding is on a farm, and it is the key to breading. When the dairy cow is kept in a body temperature condition score of 3-3.5 prior to calving, the animal can use body reserves to produce milk without impacting on her fertility. This action is essential, because it decreases metabolic disease dramatically, which is the common decrease dairy cows have when they are calving at the same time. Generally speaking, for one thing, it makes sure product safety, while the system is monitoring dairy cow’s body temperatures and health rates all the time. For another, it makes sure animals rights get respected. Because of using this electronic device, the whole farmers is supervising under computing system.Every week, it runs reports and data analysis to monitor every dairy cow in the farm, as a result of it, the health rates of the cow will increase as well.
In addition, the farmers working condition and working hours are still need to be concerned. According to Australian Workforce Report that the work of farmers and managers often have several working issues, such as work hours are frequently long, and they rarely have days off, and their work goes on throughout the year, dairy cows need to be milked two or three times a day ,must be fed ,and watered day and night. The most importantly, workers have to monitor and attend to the health of their herds, (Books.mongabay.com, 2018). Therefore, they are hard to get away. However, things can be changed if they arrange our 3D Scanner , which monitors the body temperature of the dairy cows and adjusts the water and food supply automatically. This revolutionary change will reduce the working hours of labor, as they do not need to check and feed animals that frequently. Moreover, saving more money, as the food and water supplied by a certain quantity, and the illness of cows can be found in time so that the labors’ working hours will decrease and the working condition will get improved without cut off the average wages.
The Role of 3D Scanners in Dairy Farming
Environmental
Herd for dairy industry often criticized for the major contributor of carbon emission destroying ozone layer so to stimulate the global warming. By using 3D scanner, it will not directly solve those problem, however, it could maximise the production so to minimise the increment of new herd in the farm. First of all, as our scanner intensify the exterior dignosis to measure the fat of cow, it will help to build the database to measure the right amount of forrage to minimise the waste. And this will resulting the According to claim from Beck at al. (2016).
It is also claimed by Penati et al. (2009) that the quality and quantity control of forage directly affect the quality of milk and its productivity. As our group heading to international contract stage, higher protein level would be competitive advantage among the farmers.
Economic
Furthermore, this is not only for the liverhood but also for Australian farmers families, the community and for generations as well. As the first country in the world to adopt body scanner, the Australian government has prescribed activities that qualify as 3D scanner, including eradicating hunger, poverty, promoting education and skills, gender equality, ensuring environmental sustainability, protection of national heritage,setting up technology institutions and also contribution to the Prime Minister’s Relief Fund. That is to say, they all believes that this technology revolution will develop rural economies and enhance the competitive advantage of the quality and quantity of Australian dairy in the whole global market.
Internal & External Analysis
The internal and external analyses of the proposed plan “Adoption of the device with 3D scanner and temperature scanner feature to monitor the health of the cow” will be analysed using a SWOT Analysis. There are both key strengths and weaknesses which delve into internal factors that may affect the investment proposal. The strengths highlight key benefits that the proposal will bring to the strategic positioning of the Australian Dairy Farmer company. Likewise, the weaknesses enable the company to identify and understand potential deficiencies in a very early stage of the investment so that necessary methods can be taken to mitigate such weaknesses and ensure compliance with the company’s vision of corporate social responsibility.
The proposed plan has vital strengths which enable social, environmental and economic benefits to be obtained. A 3D scanner that monitors and reports on the health of dairy cows is a relatively new technology in the Australian Dairy industry. However, such technology has received massive recognition in many Scandinavian countries. For example, the Swedish company DeLaval extensively uses a 3D scanner to ensure good health and milk productivity of the cow (AgriLand Team, 2016). Therefore, through in the introduction of such ground-breaking technology in the Australian market, Australian Dairy Farmers are provided with a competitive edge. Especially with additional feature of the temperature scanner, which work together so well with 3D scanner, technological advancement could also be used as a marketing strategy to attract new and existing clients and provide assurance that our products are of the finest quality that no other farm has a device with both features work together. The increased competitive edge and resulting strong market position would bring forth higher profits and economic gain.
Benefits of 3D Scanners
The sole purpose of the device is to monitor the body condition of the cows to ensure that they are healthy and fed at an optimal level for proper nourishment. Maintaining a healthy herd of cows increases the productivity of the milk. Also, healthy cows produce milk that is richer in nutrition ensuring better health for those members of our society whom ultimately consumers the milk. Therefore, by monitoring the health of the cows, the company can benefit both economic and social gains.
Finally, this device also allows farmers to measure optimal feeding quantity for each cow based on their body conditioning (i.e. weight and height). This ensures that all cows are fed at proper levels decreasing the chances of over-feeding or malnutrition. Feeding at the optimal levels ensures the health of the cows as well as minimising fodder waste resulting in sustainability and environmental benefits which is also in line with corporate social responsibility.
Moving on to weaknesses, farmers may find that the scanners provide overly complex and detailed information resulting in information overload. As such, there is an increased chance that farmers may miss crucial information about a cow’s health. To eliminate this issue, the scanner needs to be designed to provide only relevant information, and farmers need to be trained appropriately to analyse, understand and detect crucial information. However, the quality and relevant data result from the scanner is sometime hard to identify and required farmer to perform the scanning regularly to make these data useful. For instance of the temperature scanner aspect, the cow body temperature could change over time due the several reasons, such as surrounding environment or mood, thus few times temperature scanning could not use as the indicator of health or any other useful information.
Similarly, the scanner is an emerging technology in the market which means that the cost of purchasing such equipment is very high and costs of ongoing repairs and maintenance are also significant. As such, not all individual dairy farm contracted by Australian Dairy Farmers would be able to afford such expensive technology.
However, such weakness could be resolved through the incentive and subsidies that the government is proposing for the fiscal year 2018 – 19. As shown below in the graph retrieved from the government website, the Federal Government in their Fiscal Budget 2018 has committed to provide about $51.3 million over four years in subsidies to the agriculture and forestry industry (Commonwealth of Australia 2018, p. 89). The breakdown on the subsidy amount distributed over four years is represented in the graph below.
Weaknesses of 3D Scanners
These subsidies could be utilised to aid investment in the purchase of these scanners which would enable dairy farmers to monitor the health of the herds and gain long-term economic, social and environmental gains.
There are also opportunities and threats arising from external factors that may affect the business proposal. Whilst the Directors are unable to control such external factors directly, having sound knowledge of these external factors would enable them to exploit the opportunities for further growth and bring strategic measures to mitigate the threats.
One of the significant opportunities for development of 3D Scanners is to include a reference score function which would enable farmers to record optimal body condition for each cow (Vannieuwenborg, 2017). The optimal body condition would be stored in the system and used as a reference check against the subsequent body monitoring of the cow. When the scanner detects a different condition from the optimal condition, it will notify the farmers to conduct further inspections. This would be a ground-breaking innovation and would also help mitigate the threat of information overload that is currently prevalent in the scanner.
Likewise, developing a decision support software may allow the scanner to store data and enable multiple users to access historical information about the cow’s health in real time. It would be very beneficial for veterinarians, dairy owners and the industry bodies to work together to keep track of the health of the cows and discover any potential disease outbreak very early on.
These developments in the existing 3D Scanner with temperature scanner would bring social and economic benefits as it would provide relevant health information in real time and ensure that the condition of the cow is detected and attended to more quickly and effectively. Also, early detection of diseases would ensure that treatment is provided faster for quicker recovery and prevention of diseases, resulting in less expenditure on health-related issues over the long term. It would ensure the health of the cows as well as increase milk productivity.
Regarding threats, the most concerning factor is that as the device is very new to the market, insufficient research has been conducted which focus on the long-term effects of the scanner (Ohnstad, 2013). Even though researchers assume these technologies have been used nowaday is safe enough; 3D scanner had been used to scan animal, object, human teeth and more; temperature scanner had been used at the some airports as the passenger disease indicator, but there are not much study about the long-term effect. Having said that, the threat can be mitigated by investing in research and development to review the potential future harm of these devices, and if any harm is prevalent, adequate measures need to be implemented to curb the adverse effects. Like in any other technological development, continuous research and development are necessary to minimise any threats and enhance innovative opportunities for growth.
Opportunities and Threats
To summarise, the SWOT analysis reviews the internal and external analysis and draws our attention to the fact that the benefits of the 3D Scanner outweigh the weaknesses. Likewise, there are opportunities for the company to mitigate weaknesses and threats strategically. Therefore, the 3D Scanner is a strategically innovative and effective investment proposal for Australian Dairy Farmers to obtain the economic, social and environmental gain.
External Resources
Market for Dairy Industry
In Australia, Dairy Industry actively contributes to the economic. From a global perspective, the demand for dairy products is very large, especially in emerging countries. Australia export 37% of daily product to overseas, which helps Australia daily industry generate 3 billion export revenue, and Australia is the forth daily product export country. In the face of increasingly globalized competitors, the business should be more efficient and effective so that the business can be more competitive in the international market. In order to gain the favor of new consumers, Australian Dairy Farms Group control over the quality of raw material will once again become the core strategic direction. The cooperative role as a dairy breeder will be even more important. We will have a strong competitive edge. Our dairy farmers are efficient, professional, and responsive to the market, and the quality of fresh milk produced is excellent. Cow healthy monitoring products are the tools help the business to increase the quality and quantity of the milk and diminishing internal and external failure costs.
Australian dairy farms group has strong market share and brand value. Currently the corporate strategies for Australian dairy farms is stability/pause. Continuous improvement and maintain status will be current objectives for Australian Dairy Farms Group. On March 2018, the business pleased to announce producing baby formula. Capacity management of daily products are more important than ever before. Overcome bottleneck and increase throughputs of daily products are the essential task for the business.
Yearly ADFL is 17.8 million L in 2017, by introducing new technology, ADFL will increase 23% to 21.89 million L, which helps business generate $245,955.00 revenue. The initial investment capital will be $1 million. It will also decrease 9% Subclinical ketosis cost, 10% feed.
The investment of cow health monitoring is vertical integration. The supplier is DeLaval, Proposal ROI is 25%. Current Ratio of business of Australia Dairy Farms Group is 2.99. Assets haven’t been used sufficiently, it’s the good chance to introduce new technology to enhance the business, and finally benefit to stakeholders in both short term and long-term period.
SWOT Analysis
The proposed budget are as follows, the business will start making profits from third year.
Operations strategies
Cow healthy monitoring technology is implement in Europe, however, it’s new technology in Australia market. By introducing new technology, it will helps business to increase brand value, brand awareness. It’s a good chance for the business to promoting marking area. In addition, as the introduction of new technology, current employees have chance and opportunity to learn new knowledge and helps them improving personal ability.
Financing strategies
Despite loan from financial institution is most economical for the business. We are planning to issue new share to generate 50% funds. It’s the opportunity for shareholders to invest on Australian dairy farms group.
Conclusion
Based on the overall analysis it can be said that with the growth and development in the overall technological progression there has been tremendous changes in how people were solving certain issues that in older times seem very hard. The generation of today believes in adopting an overall sustainable approach that would also help the future generation and would be effective in all terms whether social, economic or environmental. Thus people are coming up with better ideas that would be helpful in some way or the other, one of those ideas that would be helpful to the dairy industry is discussed herewith in this assignment. With the advent of this technological ideas, dairy farmers would be very much helped as it would help in monitoring the health of the cows and thus in that it would help the dairy farmers in breading them in a better way and provide them with such facilities and conditions that would help them in growing more and giving better products for mankind. Previously it was not easy to judge how the animals were feeling and functioning and how it was affecting the dairy products that were extracted out of them, so now it has become imperative that there needs to be a technological intervention that would help in increasing the overall transparency for the farmers and these 3D scanners does the same. There are certain factors based on financial, social, environmental terms that the farmers need to consider before using these scanners. The initial monetary cost is also a big challenge for small scale dairy farmers, so government should start free check-up of the animals with the help of these scanners that would help them to understand the exact position of the dairy animals. That will help in increasing the basic awareness that is required with regards to the health of animals. Training and other services also required to be given so that people can use these scanners better. Overall it is a very good idea if properly implemented and people gets supportive to the use of such devices without involving too much hustle. It would be beneficial in the long term and help in better breading of the animals that will help in getting healthier off springs of the animals. This is how the effective use of technology can help in changing the everyday basic issues that people might face.
References
AgriLand Team 2016, New 3D technology scans dairy cows for optimum body condition, AgriLand, Ireland, viewed 29 May 2018, <https://www.agriland.ie/farming-news/new-3d-technology-scans-dairy-cows-for-optimum-body-condition/>.
Aicd.companydirectors.com.au. (2018). Sustainability and social impact. [online] Available at: https://aicd.companydirectors.com.au/membership/company-director-magazine/2017-back-editions/february/sustainability-and-social-impact [Accessed 10 Jun. 2018].
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Books.mongabay.com. (2018). Working Conditions for Farmers, ranchers, and agricultural managers. [online] Available at: https://books.mongabay.com/labor/working_conditions/176.html [Accessed 10 Jun. 2018].
Commonwealth of Australia 2018, Budget Measures Budget Paper No. 2 2018-19, Commonwealth of Australia, Canberra, viewed 29 May 2018, <https://www.budget.gov.au/2018-19/content/bp2/index.html>.
Ohnstad, I2013, ‘Body condition scoring in dairy cattle: monitoring health to improve milk yield and fertility’, Livestock, vol. 18, no. 3, pp. 70 -73.
Software, N. (2018). The Forum for Sustainable and Responsible Investment. [online] Ussif.org. Available at: https://www.ussif.org/sribasics [Accessed 10 Jun. 2018].
Vannieuwenborg, F et al. 2017, ‘Designing and evaluating a smart cow monitoring system from a techno-economic perspective’, Internet of Things Business Models, Users, and Networks, Copenhagen, 2017, pp. 1-8.
Beck, P et al. 2016, ‘Matching forage systems with cow size and environment for Sustainable Cow-Calf production in the southern region’, Journal of Animal Science, vol.94, p.63
Penati, C et al. 2009, ‘Milk production, feeding systems and environmental impact of dairy cattle farming in Alpine areas: results of a field study’, Italian Journal of Animal Science, Vol.8, sup.2, p.316-31
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