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2013 Spring - Financing the future of farming

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Farm Policy Journal: Vol 10 No 3 - Spring 2013 - Full Journal - Financing the future of farming

Australian Farm Institute (2013), Financing the future of farming, Farm Policy Journal: Vol 10 Number 3 - Spring 2013, Surry Hills, Australia
ISSN 1449–2210 (Print)
ISSN 1449–8812 (Web)


FPJ1003C - Keogh et al. (2013) - Recent Trends in Farm Finance and Rural Debt in Australia

Keogh, M, Tomlinson, A, Potard, G (2013), Recent Trends in Farm Finance and Rural Debt in Australia, Farm Policy Journal, Vol. 10, No. 3, pp. 1-11, Spring, Surry Hills, Australia.

Australian farmers operate in a volatile business environment, subject to the vagaries of the Australian climate and fully exposed to capricious international agricultural commodity markets. Periodically, a combination of climate and market factors create particularly challenging periods for farm businesses, during which time there are inevitable business failures, and growth in the numbers of farm businesses that need to increase farm debt levels to continue operating. The current time appears to be one of those periods, although evidence suggests that heightened farm financial stress is being experienced in specific geographical locations and by the producers of specific commodities, rather than more generally across the entire sector.
This paper attempts to clarify the current farm debt situation in Australia, and to examine farm debt trends that have been occurring over the last two decades, within specific geographical regions and in different commodity production sectors. While the paucity of detailed financial statistics for many sub-sectors of Australian agriculture limit the comprehensiveness of this analysis, available data indicates that there is not currently a ‘farm debt crisis’ in Australia, although there are farm businesses in specific geographical locations and involved in particular commodities that are experiencing heightened financial pressure.


FPJ1003D - Kingwell - Issues and Options for Farm Financing in Australia

Kingwell, R (2013), Issues and Options for Farm Financing in Australia, Farm Policy Journal, Vol. 10, No. 3, pp. 13-21, Spring, Surry Hills, Australia.

Agricultural investments in Australia are innately risky, as evidenced by the variability in climate, commodity prices and the exchange rate over the last decade. These risks, when combined with the banking reforms that followed the global financial crisis, have caused many banks to be more conservative in their lending policies. For farmers, especially those who are debt-laden, their access to debt finance is often now more proscribed. The result is that some farm businesses will expand more gradually than might otherwise have occurred and that land price appreciation may also be affected by there being both fewer buyers among the farmer population and greater restrictions on lending. These outcomes may cause greater reliance on other sources of capital investment in Australian agriculture. Greater foreign investment and perhaps more corporate farming may occur. Equity rather than debt financing may feature more in agricultural development. Novel business structures may address some of the risk problems that characterise Australian farming and its historical reliance on debt-financing. In concert, these financing and structural changes may promote a more productive and profitable agriculture sector in Australia.


FPJ1003E - Ducastel & Anseeuw - Situating Investment Funds in Agriculture

Ducastel, A, Anseeuw, W (2013), Situating Investment Funds in Agriculture, Farm Policy Journal, Vol. 10, No. 3, pp. 23-31, Spring, Surry Hills, Australia.

The ‘multiple food-energy-climate-finance crisis’, triggered in 2007–08, led to a renewed interest in agriculture on the part of the private investors. The projections surrounding the agricultural sector (population growth, pressure on natural resources, dietary changes and energy and environmental tendencies), coupled to the food price crisis of 2008 are questioning the myth of the permanent low cost of food commodities and are pushing investors towards agricultural activities. A reversal of the risk/profit relationship appears within the production chain: whereas primary production constituted until now the main risk factor, with profits returning particularly to downstream actors, the increase in agricultural prices now tends to invert this relationship. Such reversals predominantly fuel large-scale global land acquisitions. The financial crisis of 2009 strengthened this dynamic and brought new participants to agriculture, particularly from financial markets. Confronted with uncertainties affecting ‘traditional’ financial assets (eg bonds, equities), these new participants diversified their investment portfolios, integrating more ‘emerging concepts’ and/or physical assets in investment classes such as agriculture.


FPJ1003F - Clark & O’Callaghan - Australian Farming Families Are Here to Stay

Clark, N, O’Callaghan, P (2013), Australian Farming Families Are Here to Stay, Farm Policy Journal, Vol. 10, No. 3, pp. 33-43, Spring, Surry Hills, Australia.

There is considerable debate about increased foreign ownership of farmland and corporate farming in Australia, and the presumed decline of the ‘family farm’. However, while overseas and corporate farmers have an important role in Australian agriculture, family farming business entities are not about to be replaced by big business. This paper identifies family farms as having specific strengths compared to other types of business structures involved in agriculture. This analysis suggests that farming families will be the source of a great deal of future agricultural investment in Australia.
Data from the Australian Bureau of Statistics (ABS) Agricultural Census 2011 forms the basis of the work presented here, supplemented with data from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the Australian Tax Office (ATO), and the Reserve Bank of Australia (RBA). The analysis considers a range of different aspects of the sector, including the role of farms in the Australian agricultural value chain, the nature of business structures in Australian farming, the changing demographics of Australian farming, the life cycle of farm businesses, and what business health indicators say about the state of family farm businesses.


FPJ1003G - Miller - The Rise of Investment Funds in World Agriculture

Miller, C (2013), The Rise of Investment Funds in World Agriculture, Farm Policy Journal, Vol. 10, No. 3, pp. 33-43, Spring, Surry Hills, Australia.



FPJ1003H - Gladigau - An Introduction to Collaborative Farming

Gladigau, J (2013), An Introduction to Collaborative Farming, Farm Policy Journal, Vol. 10, No. 3, pp. 33-43, Spring, Surry Hills, Australia.



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