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The need for accounting-integrated data streams for scenario-based planning in primary production: responding to COVID-19 and other crises

Joanne Louise Tingey-Holyoak (UniSA Business, University of South Australia, Adelaide, Australia)
John Dean Pisaniello (UniSA Business, University of South Australia, Adelaide, Australia)

Sustainability Accounting, Management and Policy Journal

ISSN: 2040-8021

Article publication date: 13 November 2020

Issue publication date: 26 August 2021

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Abstract

Purpose

This study aims to explore the need for improved data sources and models for COVID-19 and climate-related risk scenario analysis in primary production. The COVID-19 pandemic is impacting global markets for agricultural produce, making short-term forecasting highly uncertain. Meanwhile climate-related risk continues for agricultural businesses. Farmers and their accountants need to plan and make estimates about the potential effect of COVID-19 and ongoing climate risks to their natural and financial capital and so they need accounting-integrated biophysical and socio-economic data streams.

Design/methodology/approach

This research note reviews the current state of scenario-based planning for COVID-19 and other risks for Australian businesses generally, in addition to planning for farming businesses more specifically. Discussion of the authors’ current research in integrating accounting and farming data for water-related risk caused by climate and other challenges is presented as an analogous case.

Findings

Review and analogous case comparison demonstrate the need for farm data to be integrated more efficiently and effectively with accounting data for accurate scenario planning for COVID-19 and other risks, including those posed by climate.

Practical implications

While not strangers to the need for scenario analysis, given exposure to ever-increasing natural resource and climate variability, this research note highlights how primary producers and their accountants require increased accounting-integrated farm data and systems to make judgements, assumptions and estimates about the potential effect of COVID-19 and ongoing climate risks to their business.

Social implications

The sustainability of the agricultural sector is of great relevance to all of us and so the development of tools and resources that can assist food producers in times of ongoing climate pressures and new crises, such as COVID-19, is important. Better understanding of such risks can help farm businesses develop effective strategies which minimise the potential loss of agricultural value resulting in improved flows of greater capital value for society.

Originality/value

Through application to the analogous case of water-related risk and decision-making, the research note demonstrates that linking of biophysical and accounting data streams will be essential for evidence-backed numbers included in scenario plans with enough legitimacy to be interrogated inside and outside of the business. The “best estimate of the directors” is no longer enough in challenging socio-economic and biophysical times ahead for primary producers.

Keywords

Acknowledgements

The authors are grateful for the support of Sentek Pty Ltd, especially Mr Peter Buss, and also the grower participant who both contributed significant time and resources to the case study research discussed. The authors acknowledge receipt of a University of South Australia Research Themes Investment Scheme grant (2018) which made much of the work possible, and the collaborative support of Dr Wolfgang Mayer of UniSA STEM.

Citation

Tingey-Holyoak, J.L. and Pisaniello, J.D. (2021), "The need for accounting-integrated data streams for scenario-based planning in primary production: responding to COVID-19 and other crises", Sustainability Accounting, Management and Policy Journal, Vol. 12 No. 5, pp. 898-912. https://doi.org/10.1108/SAMPJ-07-2020-0258

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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