WHILE Australian agriculture is forecast to grow, questions have been raised about how future farmers are going to attract capital investment without depending solely on debt funding.

On Thursday, The Australian Farm Institute’s Richard Heath addressed farmers at the Grain Research Development Corporation Update, held at Goondiwindi, which focused on future farm productivity and the capital required to assist agricultural growth.

Mr Heath referred to ANZ’s Greener Pastures report, which said agricultural growth wouldn’t be achieved without the support of both domestic and foreign investors.

The ANZ Greener Pastures report stated agricultural growth wouldn’t be achieved without the support of both domestic and foreign investors.

The report also said between now and 2050, about $600 billion in extra capital would be needed to generate growth and profitability in Australian agriculture, based on current capital valuations.

Currently, there’s a massive $1.2 trillion under management by Australian superannuation fund managers, of which just 0.3 per cent is invested in agriculture, said a 2015 report by accountancy firm BDO Australia.

The most common reason given by super fund managers for not investing in agriculture is the lack of agricultural products that can be invested in, as well as a lack of managers with agricultural knowledge.

Mr Heath said the ability to attract equity could require more nimble structures to be introduced to agriculture, allowing investors to “get out of investments” quicker.

With floods and droughts affecting the nation’s agriculture annually, Mr Heath said the country didn’t have the productive consistency of countries such as Brazil and New Zealand.

And that creates problems with investor confidence for long-term commitment.

Although debt funding has so far worked for farmers in allowing them to upscale their farms, Mr Heath said alternative capital sources and new farm business structures were necessary, as the average value of farm assets continue to increase.

One alternative raised during his presentation was crowdfunding, which Mr Heath said had been increasing rapidly.

Crowdfunding introduces the idea of people donating money to a cause they believe in without getting anything in return, although, equity-based crowdfunding has also been on the rise, where investors can buy a share in the business or participate in an alternative profit-sharing scheme.

Victoria resident Madelaine Scott, Clarkefield, was one agricultural entrepreneur who decided to lay the fate of her business in the hands of generous strangers.

At eight years old, Miss Scott’s parents bought her 20 chickens to help her start a business where she sold eggs to the likes of her grandparents and neighbours.

Her egg production became quite the hit, and by 19, she had 900 hens and was spending four hours a day packing cartons.

After making a video about her business, Madelaine’s Eggs, Miss Scott uploaded it to Pozible, the crowdfunding website that gave her 60 days to achieve her goal of raising $50,000 for an egg cleaning and packing machine.

At the time, Miss Scott said there’d been very little agricultural crowdfunding ideas uploaded to the site, although it was very well received.

“That’s not to say it wasn’t hard work,” she said.

“I worked really hard to get exposure, I was calling newspapers, television stations and going on the radio twice a week.”

Miss Scott said she would suggest crowdfunding to anyone that wanted a leg up in their business. The now 22-year-old runs 3000 hens for her business.

Since government legislation was introduced to crowdfunding in 2015, Mr Heath said the model is less appealing to broadacre farms as equity crowdfunding can only be accessed by public companies with assets or income less than $5 million. He did say it could be an alternative option for smaller farms and niche agribusinesses.

Australian Real Estate Investments Trusts (A-REIT) was another funding model gaining interest in agriculture. Mr Heath said the funding model gives investors access to property assets and the main benefit of it was that it can provide access to assets that may be otherwise out of reach for individual investors.

“Such as large-scale commercial properties,” he said.

While obtaining figures on the use of different business structures throughout the Australian farm sector is difficult, Mr Heath said the data that is available suggests sole trader and partnerships are the most common business structures used across Australian farms.

The high use of partnership structures in the Australian farm sector sets the industry apart as Mr Heath said most other industries ran on a company structure.

Collaborative farming as an alternative business model has been raising particular interest among farmers who are looking to better distribute capital.

Mr Heath said it hasn’t been uncommon for neighbors to form multiple farming businesses, combining their resources to form a single business with increased efficiency.

Usually though, Mr Heath said family farming businesses have inherited their current structure and the compliance costs required to convert to a new business structure makes the concept unappealing.

Better rural health access on CEO’s wish list

RICHARD Colbran is showing you don’t have to be born in the country to want to do good for the area.

The born and bred city boy has just been appointed to the position of Chief Executive Officer for the well renowned organisation, the Rural Doctors Network, beginning his new duties on October 17.

The NSW RDN is a not for profit organisation which aims to ensure the highest possible standard of healthcare is provided to rural and remote communities.

Richard Colbran

The RDN is a membership organisation and currently has 1500 members, 1020 of which are registered medical practitioners.

Although Mr Colbran said he didn’t grow up in the country, he’s always had an appreciation for the area which he inherited from his father, who spent a lot of time across the state for work.

A big part of Mr Colbran’s job will be travelling to rural communities and understanding individual regions’ problems.

Mr Colbran said this was the most enticing part of the role as he’s always loved travelling and meeting new people.

“The Rural Doctors Network has been working hard to represent the needs of country towns and members of the health industry, and I hope to continue that,” he said.

Bridging the gap between rural and metropolitan areas is high in Mr Colbran’s list of things to accomplish in his new role, as well as generating understanding between the two areas.

From 15 years in the industry, Mr Colbran has developed skills in integrating stakeholders, from government to local health providers and local community members, will help ensure that rural people can access the health and other essential services that are critical to their wellbeing.