What do you think are the top 3 Australian agricultural exports in 2016? Make a considered and intelligent guess first. You can then try the Department of Foreign Affairs and Trade (DFAT) or the Australian Bureau of Statistics (ABS) web sites.
2. Look for the financial reports of 2 major Australian agribusiness exporting companies, one of them must be a wine exporter. Agribusiness in this context includes the production, distribution, etc. of farming produce and agricultural equipment and supplies. You won’t be able to find Ferngrove’s financial statements on the public internet, do you know why?
3. Write the names of the companies that you have found.
4. Examine the balance sheets of the 2 companies that you have chosen. What are their assets and how are the asset values derived? (Hint: read the accompanying notes).
5. Due to slumping exports, vineyard values have lost as much as 50 percent since 2008 across Australia’s 60 wine-producing regions. What does this mean? How do you think vineyards are valued? (Only a general answer is required, although some thinking is necessary).
6. What do you say are the risks and challenges of agribusiness? (Hint: this has implications for capital providers as well as the broader community, etc…) Provide 5 key words (or short phrases).
7. Ferngrove Wines was in trouble, in need of revenue and urgent finances having lost a major ongoing contract. What ideas do you have for possible ways of generating revenue given the competition that the wine industry is facing? (Hint: think outside the box, therefore throwaway lines like increasing advertising and sales are not good enough in this context). Give 2 suggestions with justifications.
8. Give 2 possible sources of finance and explain why these sources are likely to finance Ferngrove Wines.
9. Many rural and agribusiness in Australia are in strive – lacking capital for equipment upgrades and infrastructure developments, and having to battle the effects of long periods of draught. Sadly for many small and medium sized family entities there is simply no way out. Ferngrove Wines is a success story benefiting from Chinese foreign direct investment and there are many more. “The Australian government welcomes foreign investment. It has helped build Australia’s economy and will continue to enhance the wellbeing of Australians by supporting economic growth and prosperity.” (Source: Australia’s Foreign Investment Policy). The readings and statistics given earlier show the extent and pace of Chinese investment in Australia and the level of trade and business between the 2 countries. Yet, Chinese direct investment is not welcome by all. Controversies, scepticism, and political wrangling over Chinese direct investments in Australia are broadcasted frequently in the popular media in one form or another. Here is an interesting debating topic: “Australians should welcome and accept all direct foreign investments.” Would you prefer to be on the affirmative or opposition side? Jot down a few points on the side that you would like to be on.