Last year, CIMA invited Insight readers in the agriculture and food industries to participate in a series of roundtables.
These roundtables discussed the use of target cost management in the agriculture industry. They brought together farmers, agricultural ‘extensionists’ (consultants), government advisers and CIMA members. Their views have been collated in a report called 'Gate to plate'.
The discussions were based on CIMA funded research by Dr Lisa Jack of the University of Essex. The report addresses the inherent and sector specific barriers that farmers face when implementing a collaborative costing system. It also considers food security and wastage.
The round-table delegates discussed a number of concerns facing the industry - including the issue that farmers simply haven’t focused on cost management before.
Severe disadvantage
This is partly because of a reliance on subsidies which has meant they frequently don’t understand their costs. This puts farmers at a severe disadvantage – especially when dealing with food retailers which have a professional and sophisticated understanding of their own costing systems.
They need to be able to speak the same language as this will ultimately benefit the entire food supply chain - from the farmers to the food retailers to the customers.
The report concludes that strategic management accountancy, and approaches such as target cost management, have the potential to address a number of these issues. They can encourage visibility of costs throughout the supply chain and better understanding between participants.
Download a copy of the report.
For more information about CIMA’s research programme, please email research@cimaglobal.com.
May 2009