The value of Farmland is the foundation of Agriculture

By: "Farm Tender" News
Agri Political News
Feb 13, 2019
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So why is the focus always on production?

By Lisa McFadyen - Valuer, Ag Consultant and StartUp Founder, Secure Impact

Secure Impact’s vision is to pave the way for a long-term, sustainable and viable future for the Australian Agriculture industry.

We believe that farming - at its core - is a business.

In order for farming businesses to thrive we must remove the obstacles that stand in the way of effective planning and growth.

If you are in farming, you are no doubt familiar with the common and reoccurring challenges facing our industry; land asset transitional issues, ageing populations, skill shortages in the workplace, lack of capital to facilitate farm acquisitions and a lack of capital within the business... the list goes on.

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We believe that change is necessary if Agriculture is to prosper.

So, what needs to change?

Put simply, we need to nurture land ownership changes and transfer into the new millennium.

We need to separate the farmland (land) and operation (farm operation) in assessing our farms. We must improve business partnerships at a land asset and farming operation level, whether through lease, share-farming, equity partnerships, joint ventures or property trusts. This is our future. This is how we move forward. This is how we increase our capital for production. We know that Agricultural land is a key asset of a farming operation, so let’s now have the discussion.

Key areas for change:

● Farmer perception and mindset: We believe that change starts with a shift in focus - a change in mindset around how we plan for ownership and retirement, developing skills, training and education, as well as being proactive in making changes to business.

● Investor: A focus on long-term return on investment. Liquidity greatly impacts investment into agriculture. Secure Impact employs a weighted Agriculture index, which aids in the risk vs rewards analysis of any one property, highlighting unique attributes such as land value, soil type, rainfall, topography, infrastructure and sustainability and creating a clear basis for comparison.

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● Government – The farming community is currently reliant on concessional subsidised loans, which leads to ever increasing debt ratios. Alongside, the farming community must be proactive in driving innovation in agriculture, just to survive. Therefore, it is imperative that policy changes are made that increases investor and farmer confidence, to link the innovation and productivity increases to this lending. It is imperative that Government is a key pillar to building this confidence, through policies and incentives that really make a difference – an example of this would be to introduce Stamp Duty exemptions to Land Transfer to unrelated parties subject to active involvement in the farmland.

● Banker: Fully assessing the land capability of a property in order to gauge its borrowing/repayment capacity with lending will ensure debt levels don’t skyrocket out of control. This also calls for a stronger focus on sustainable land practices and management.

● Researcher: Research across breeding, fertiliser, chemicals use, water usage efficiency and crop rotations has given way to landmark progress in production. While effective management and timely decision-making are key to farming success, and rainfall an unpredictable hurdle to overcome; financial research into farming success and viability is not straightforward. However, in the face of a skills deficit in the workplace, further research is needed. Additionally, there is a demand for research into the ownership structures of Australian farms and potential alternatives, an area which has been neglected due to lack of funding.

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● Security/Asset Protection: The relationship between farmer and investor or related/unrelated parties requires asset protection. This comes through business structures but these are at the mercy of government policy changes. Secure Impact has a new technology launching in 2019, which will enable security of asset ownership, asset protection for co-equity owners and create liquidity within the Ag market. The land asset and farming business need not be owned by an individual or sole farming family. They may share ownership with third parties.

Our Secure Impact Marketplace Platform delivers trust, transparency and real time transactions. We are passionate about the needs of our stakeholders, creating long-term industry change and real growth of the rural industry.

http://www.secureimpact.com.au/