Evaluation tool supports better decisions

AgResearch has been inundated with interest in an evaluation tool developed to help grow Māori agribusiness.

AgResearch scientists began working on the Social Return on Investment evaluation tool in late December 2012. The one-year project, funded by the Ministry of Primary Industries’ Sustainable Farming Fund, involved working closely with Aohanga Incorporation, a large Māori Incorporation with more than 1700 shareholders and the Ministry of Primary Industries.

Based in the Wairarapa, Aohanga Station covers more than 7,000 hectares with two marae on site, and includes pastoral grazing land, forestry, native bush (with honey production), olives and scrub land.

Aohanga Incorporation, who had an existing relationship with AgResearch, wanted a tool developed to help them evaluate the relative merits of different diversification opportunities for their land, and a decision-making model that would make the process clear to shareholders.

Social Return on Investment (SORI) is an established theory and model used extensively overseas, particularly in social services and the not-for-profit sectors, to demonstrate impact which may not necessarily be financial, but may have social, cultural or environmental benefits.

The tool developed for Aohanga Incorporation is an Excel spreadsheet that brings together information on the implications of developing different land-based alternatives, based on the Social Return on Investment theory. The tool incorporated the owners’ values and priorities, the characteristics of the land and current use, to compare the potential outcomes and benefits across four criteria: economic, social, environmental and cultural.

Throughout the project the researchers met regularly with Aohanga Incorporation to present updates and work together to prioritise and plan so the tool was most relevant to the Incorporation.

The tool is an effective visual tool for decision making, enabling people to see the impact of different land-based decisions and the best paths to follow. It is especially useful for organisations with multiple shareholders, such as farm-based Māori Trusts and Incorporations. It means better governance, transparency and understanding for shareholders not involved directly in decision-making.

It also allows Māori farming incorporations and Māori agribusiness groups to meet cultural, environmental and social aspects of their people and shareholders, while looking at how to best improve productivity and performance of the farm. Financial decisions can be weighed up against the impact on the environment, and a  land-use change, such as the establishment of an orchard, can be understood in terms of its social benefits, such as job creation for youth.

Aohanga Incorporation used the tool to support integrated decision making for land-based activities along two dimensions: wellbeing (environmental, economic and social), and activities (the impact of possible land-based activities such as farming, forestry and other land uses).  They were able to compare land use options on a per hectare basis, as well as compare enterprises including sheep, cattle, forestry products or yield from beehives (honey) and olive trees (olive oil).

The project has been a huge success, and has highlighted the benefit of the effective partnership between Aohanga and the research team, and the importance of relationships for researchers and others working with Māori agribusiness.

Continuous engagement and communication is key to the success of such research partnerships, says AgResearch senior scientist Oscar Montes de Oca Munguía.

“It’s a great example to other Māori agribusiness about engaging with research and its applications.”

The Social Return on Investment tool has garnered a lot of interest from groups and individuals who would like to use it to help make better decisions. The model was presented at a stakeholders seminar in September last year and at the Ministry of Primary Industries science seminar in May this year.

“People from around the country are very interested, and a number of them have been in contact with us including regional councils, district health boards, tribal authorities, marae and farm consultants,” says Mr Montes de Oca Munguía .

The researchers are still working through the next steps of how the model can be used by other Māori agribusinesses and the diversity of other users interested in the model.

Mr Montes de Oca Munguía cautions that for the tool to be relevant a significant amount of background research and work has to be done to ensure data and estimates are accurate, so that outcomes modelled are also accurate.

“It does take a bit of thinking; the model is not going to do the thinking for you.

“It is a powerful tool at a governance level, allowing people to focus on long-term strategy and looking at trade-offs when looking at various investment decisions concerning land usage,” he says.

The Social Return on Investment tool offers an opportunity for Māori Incorporations to find out more about their land resources, and how such a tool can help them organise information to make better decisions. It also demonstrates how researchers and Māori agribusiness can work together effectively.

Benefit to New Zealand

In addition to the recognised enhancements to management decision making within Aohanga Incorporation, the proven SROI evaluation tool will now be available as an effective resource to assist other Māori trusts and incorporations within New Zealand. The extra-dimensional aspects to governance in Māori i organisations occur where multiple purposes exist, and the asset resource management and use must be balanced. Given the national value of assets for Māori trusts and incorporations within the agricultural sector are estimated at $2.5 billion, a tool to improve the effectiveness and implementation of land-based decisions would be notably beneficial. In addition, published modelled economic impact assessment for Māori primary sector interventions, projected to be facilitated by Government strategic investment to increase the productivity of both un-utilised and under-utilised Māori land into agricultural production, suggest national net benefit increases to GDP of $806 million for dairy, and $272 million for sheep and beef sectors could be realised. The adoption of the SROI tool on a national basis is certainly capable of being a contributing factor to the realisation of Māori primary sector productivity and benefit gains.

Project Investment

Total project investment from 2012 to 2013 was $130,000 from a MPI Sustainable Farming Fund grant and Aohanga Incorporation support. Some tacit precursor project knowledge and R&D outcomes (incorporating economics, ecosystem services, farm systems, GIS modelling and programming) from previous Ministry of Business, Innovation and Employment and SLMACC (MPI Sustainable Land Management and Climate Change) funded partnerships with Aohanga Incorporation, contributed to the development base of the model.