GETTING a vibrant mix between family and corporate farms will benefit Australia’s cropping sector.
That was one of the key messages from the Grains Research and Development Corporation (GRDC) forum in Swan Hill in March.
Forum host Alan Jones, Macquarie Radio, told the crowd the family farm unit deserved credit for its efficiency.
“The family farm generates 70pc of agriculture’s export income,” he said.
“Australian family farmers do a tremendous job.”
However, the panel, made up of Victorian shadow minister for agriculture Peter Walsh, Grain Producers Australia (GPA) chairman Andrew Weidemann and GRDC southern panel member Andy Barr, along with Mr Jones, said corporate farm units could offer urban investors an exposure to agriculture and provide more capital to the grains industry.
Mr Walsh said he believed the current mix between family and corporate farms was about right, but said he wanted to see corporate farmers staying in the industry longer.
“What we have seen so far is that they tend to get in and get out, and that can distort local land values both up and down when they buy in and then when they sell which is not a good thing.”
Mr Weidemann agreed.
“We have seen the impact corporates can have in parts of Queensland, where they came in and took the land price up, before exiting and then farmers’ equity dropped, as a result of land prices falling.”
“We need to ensure these mistakes don’t happen in the future.”
The panel said one of the major downfalls of corporate farming was attracting quality staff.
“Anyone with capital can buy a big farm, but it needs good people to farm it,” Mr Walsh said.
Mr Weidemann said attracting skilled workers was a massive issue for both larger family farms requiring additional staff and corporate farmers.
Kate Burke, an agricultural consultant from Echuca who has previously worked in the corporate agriculture sector, said from the crowd she believed corporate farmers were leading the way in providing agricultural workers a good workplace.
“Most of the people who worked for my company, who have worked for corporates, they actually say they wouldn’t work for a family farm again,” she said.
“Working for a corporate concern they are treated well and their working hours are managed properly, they have been very happy.”
Mr Jones said he wanted to see corporately owned farms coming from Australian investment.
“I am not against foreign investment, but I have issues with foreign ownership of our agricultural assets.”
“These investors are getting all the value from their investments and none of that is flowing back to Australia, we are losing tax revenue, how does that make sense?”
He raised the possibility of a mandated percentage of Australian superannuation funds to be invested domestically.
“There is so much money in superannuation in Australia, around $1.8 trillion.”
“Imagine if 20 per cent of that had to be invested within Australia, we could see some of that invested in Australian agriculture.”
Mr Walsh said agricultural investment need not be limited to simply farming.
He said an injection of capital from superannuation could revitalise pressing projects such as improving the freight network or rural telecommunications, while creating good value for investors as well.
“These projects would generate a good return on investment for the industry as a whole.”
However Ms Burke asked the panel whether it thought agriculture was doing enough to attract outside investment.
“Why would super companies invest in agriculture if we keep telling them they can’t?” she asked.
“Why would urban people encourage their own super funds to invest in agriculture if all they are listening regarding rural Australia on commercial radio is doom and gloom?”
She said a key part of her former role had been educating fund managers on how agriculture works.
“We ask these people to invest, we need to manage their expectations.”
“It can be as simple as explaining why, when canola has the highest price, we don’t grow that crop every single year.
“By getting technical people to meet with institutional people, it (external investment in agriculture) will go a long further a lot quicker.”
Mr Jones agreed, saying agriculture represented a good investment in the long term, but he said investors needed to be aware of the peaks and troughs associated with a climate reliant industry such as farming.
