Australian governments and industry need to start thinking about how to get young people into agriculture and stop the exponential US trend towards corporate agriculture. The huge capital requirements are a barrier for young people, making entry impossible unless families help fund them, but with a large number of family members not wishing to farm, corporate agriculture is experiencing huge growth.
Fresh thinking is important in agriculture, so it is critical we establish realistic ways for young people without capital to get a foot hold. But because the capital required is in the millions, some clever thinking is needed. The ever-increasing purchases of signature properties by big corporate players is driving up land values, appreciated by those trying to get out but driving up prices for young people trying to get in.
Lofty ideals of getting young people on farms is fine, but without governments recognising the problem requires their attention, nothing is likely to change. If we look overseas, there are ways to make it possible. The lack of a deposit can be the first major stumbling block, as that can run into hundreds of thousands just for the land, plus another million or so for very basic stock and plant.
If government decided the problem demanded a solution, there is a low-risk way for governments to intervene, recognising there are two main players in the deal.
There are farmers who want to sell their farm and young people busting to own a farm. The retiring farm couple must have secure, guaranteed return on their investment as they would by investing in shares, bonds or cash, but the government could act as the facilitator between the two parties. The young farmers would have to have a proven credit history and a track record as property managers and put up a business case that showed a good enough return to repay the debt. Clearly rules would have to be developed to facilitate all possible scenarios in the event of default, so the retired farmer is not left holding a farm they do not want. Internationally there are schemes for farmers under 40, but often with limited capital.
The European Economic Union (EEU) identified the problem some years ago and established the European Fund for Agricultural Development with funding of $5 billion. In France, local government and a farmers’ board decide who can buy land to ensue young people can make a start – and nearly 35 per cent of farmers have no family history as farmers. The English have a scheme called the Young Farmer Entry Scheme, but it only offers small monetary assistance. In Canada the Agricultural Financial Service Corporation will loan as much as $1 million to young farmers at a concessional interest rate.
Australian governments can sit and watch farming morph into a corporate landscape, but I think it is important we retain young people and smaller farmers in our industry to maintain healthy communities.
- Mal Peters
