Host: Boreelum Station
Written by Adam Coffey – Station Owner/Manager
One thing that we often think about and discuss given our experiences are the difficulties facing young people trying to gain a foothold in Australian Agriculture. The huge capital costs associated with land ownership and/or inventory required to operate a primary production enterprise are too large to pull on for the average young person without serious financial backing. The frustrating thing is that young people, particularly those “with the financial blowtorch to their arse!” (as one of our good friends and mentors says), are often the innovators who bring fresh ideas and don’t have the option of taking easy street.
The next generation.
So, Australian ag needs these young entrepreneurs. There has been much discussion about this in recent years with the average age of the Aussie farmer pushing 60 and not seeming to get any younger but I’m not sure we’re any closer to solving the problem. I think the worse thing we could do is try and make extreme concessions in a bid to make it happen. Young people need to earn their place in agriculture and it would be detrimental to our industry if they didn’t. Australian agriculture has one of the lowest levels of subsidies and concessions of any developed nation and whilst some of our regional areas may have suffered comparatively as a result, there’s no doubt some of our world-leading practices have been developed on the back of tough times, and businesses that are structured to operate with tight financial margins.
Our personal journey into owning and operating our own business has been one of hard work, aspirations and a good dose of luck thrown in. We’ve met some very good people along the way who have supported us and enabled us to get where we wanted to get sooner. One partnership in particular was a case of right place, right time that developed from nothing into a win/win relationship which from our brief experience is rare. Don’t worry we have had our fair share of shitty experiences along the way too! For young people these partnerships are key. There is a need for the older generation to exit ag and that presents opportunities – if you bang on the door long and hard enough something WILL eventuate.
Adversity creates opportunity – one person’s pain can be someone else’s gain, sounds harsh but it’s true. For us the Live Export ban created an opportunity to buy cattle when people were nearly giving them away. Probably good luck more than good management but we had positioned ourselves, through our early residential investments and other savings, to be in a position to capitalise on the opportunity when it arose.
Our banking sector has a role to play here. Prior to purchasing Boreelum we had an opportunity to purchase a different property. A classic example of the last generation wanting to get out; ready to retire, children in other careers and time to go. We were offered the place at a substantial discount on the last independent valuation. Effectively we were to walk in on day one with 50% equity and yet it took over 12 months and the help of a broker to get any financial institute to show interest. This was a very frustrating time for both us and the vendors as what we both thought was a very bankable deal kept getting rejected. The main reason was that “lending is based on purchase price and we couldn’t possibly consider lending on an independent valuation”. What’s the first thing the bank asks for when you propose to purchase a property?? That’s right; an independent valuation to verify the asking price! SO, our banks make a lot of the right noises but they need put their money where their mouths are and be prepared to back young, hard working professional potential ag entrants and invest in people that don’t necessarily yet have runs on the board.
Government needs to play a role too. They need to stop piling on red and green (environmental) tape that ultimately needlessly impacts the viability of primary production. Personally, I’d like to see some amendments to tax legislation to give the next generation a leg up and differentiate it from “generally” asset rich older generations. I don’t know about the experience of others but we certainly found it hard to cough up an additional $60k for stamp duty when the purse strings had already been pulled pretty bloody tight! We need to continue to try our best to positively interact with the wider population and understand that we are going to keep becoming increasingly urbanised, so positive communication from Ag is a must in the world of social media and instant news.
Anyway, that’s my bit for what it’s worth. I know there are plenty of others out there battling to own a slice of Australian Agriculture in some form or other. I hope that if we continue to work hard, have vision and put our heads together on this issue we’ll get there!