![Hollie Baillieu. Hollie Baillieu.](/images/transform/v1/crop/frm/silverstone-agfeed/1355801.jpg/r0_0_400_350_w1200_h678_fmax.jpg)
LOW-INTEREST finance schemes designed to give young farmers a leg-up to buy their own property could be the succession-planning solution the industry is after.
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Loans of up to $150,000, with a fixed interest rate of 2.77 per cent, would be offered to applicants under the age of 35 if the NSW Young Farmer Starter Scheme was given the go-ahead.
A Farm Succession Planning Share Scheme would offer similar loans to new farmers who wish to link with existing landholders, whether family or not, who gradually want to retire.
The brainchild of the NSW Farmers’ Young Farmers Council, the scheme would be based on similar initiatives in Queensland and Victoria which have proved successful and would require no repayments for the first two years of the loan.
Young Farmers Council chair, Hollie Baillieu, said new initiatives must be created to address the rising average age of farmers and to avoid succession planning problems in the coming decade.
The average age of farmers across Australia is 52, while the average broadacre farm in NSW costs $873,509.
“The concern we have is that
there’s no incentive in NSW for people who have grown up on farms, who are interested in farming, to return to agriculture,” Miss Baillieu said.
“There is also very little to attract those who have never experienced farm life to get into the business.”
NSW Government support is needed for the program to become a reality and the Young Farmers Council met with NSW Primary Industries Minister, Katrina Hodgkinson, at the NSW Farmers conference a fortnight ago.
The NSW AgStart Program, designed to help young farmers meet stamp duty and financial training course costs, has been under review since 2009.
Miss Baillieu said the scheme could be the boost the agriculture sector needed.
“Applicants will have to have a business plan but something needs to be done to attract young farmers into the industry,” she said.
If funding is secured, it is likely the scheme will run through the existing structure of the Rural Assistance Authority, with help from the Department of Primary Industries.
About 20 applicants a year would initially be successful on the young farmer starter scheme, at the discretion of the administering board.
In Queensland, the First Start Loans offer concessional finance of up to $500,000 in the early years of establishing a primary production enterprise, with repayment up to 20 years.
While in Victoria, the Young Farmers’ Finance system – run through Rural Finance – enabled applicants under 40 to borrow with a concessional interest rate two per cent lower than normal loan rates.
In June, Victorian Premier, Ted Baillieu, said an extra $7.5 million would be committed to the scheme, lifting his government’s contribution to $22.5 million, and dropped land transfer duty on the first $300,000 of agricultural land purchased by anybody under 35.
Schemes that encourage the next generation of farmers should be welcomed by the agribusiness sector, said Rabobank Armidale branch manager, Nick Pearce.
“During the next 20 years, there’s going to be a massive change of assets from one generation to the next because the people who generally own the land are getting older,” Mr Pearce said.
“The problem with farming is it is capital hungry but anything to help the situation will be good.”
If successful, First Start Loans of up to $500,000 might be offered in future to match the schemes in other States, said Young Farmers Council member, Ally Dingjan, of Wagga Wagga.
“At the end of the day, we are hoping to get up to $500,000, because a header costs about $200,000 and there’s so many more costs involved in a farm,” she said.
“Everything takes time but we are trying to look at all other options to get people onto the land.”