SA Dairyfarmers' Association


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Posted on January 20, 2023

‘Change the way we do things’: Creative solution required to combat ageing farm population

With 50 per cent of farmers expected to retire in the next 15 years, skyrocketing land and production prices has industry experts worried young farmers are being priced out of being able to afford their own farms.

According to the National Farmers Federation, the age of an average farmer is 56 – 17 years older than the average Australian worker, meaning the next decade is set to see a changing of the guard in the agricultural sector.

64-year-old veteran Terry Buckley, an industry expert who has been a potato farmer at Mingbool in the state’s South East for 45 years, said owning a commercially-viable farm would come with large overhead and entry level costs for the younger generation.

“I don’t think anyone’s going to be able to enter the industry from the outside because the land is too dear,” Mr Buckley said.

“If you’ve got dreams of having a farm you need to get a high-paying job in town — because there’s no way you can sort of work on a farm and save enough money.”

South Australian Dairy Farmers Association president John Hunt said it was a matter of being “creative” to get younger farmers established.

“We’ve got to change the way we do things. Because for young people to get a deposit for land and stuff like that is really tough now,” he said.

Setting up a dairy farm could cost as much as seven million, Mr Hunt said.

Partnering retiring farmers and young people through equity managers is one option that has been floated and would allow new owners to take over a farm, for a smaller deposit.

“A lot of goodwill has to be involved in that — (young people) can come in at smaller percentages and work their way in,” he said.

“The farm owner is putting himself out there — but it’s generally a win-win for both because the young person’s got skin in the game and the owner has got someone there.

“You can sort of work them in over a five to 10-year period.”

Cultivate Farms, a social enterprise which aims to pair the next generation aspiring farmers with retiring farmers, made a submission to the Royal Commission on Aged Care warning 50 per cent of Australian farmers are expected to retire within the next 15 years.

Managing director Sam Marwood said farmers nearing retirement needed to consider “what they wanted”, with many wanting to die on their properties from “old age”.

“If that’s the answer, then we know there are about a dozen different ways for that to happen,” Mr Marwood said.

“You don’t necessarily have to sell your farm and walk away.”

Young couple Ben Walker, 28, and his fiancé Michelle Roe, 30, have both entered into a shared farming agreement with a landowner in order to run their own dairy and eventually buy a farm outright.

“We were just managing for totally different farm business and just working for a wage,” he said.

Through managing farms the couple was eventually able to save enough to invest just over $1.1m into the shared agreement.

The couple have worked the Mount Schank property for two and a half years and are thankful for the opportunity they were given and the faith the landowner had in them.

“If we just kept managing farms we wouldn’t have made the financial progress to meet our goals of potentially buying a farm one day,” he said.

Mr Walker said he understood it was difficult but urged older farmers who are looking to slow down to “let go of the reigns” and let somebody “young and keen” have a crack.

“For younger people, it’s not just going to fall into their lap,” he said.

“They need to set goals and work for it — do a business plan, set a timeline — approach those older people, even if they might not be advertising.”

Mr Walker said the main difference between a shared farming agreement and a lease agreement was the landowner had a stake in how the land was worked.

“In a lease agreement you just pay a rate per hectare per year for the land and that‘s, that’s their remuneration for giving you the run of the farm,” he said.

In Mr Walker and Ms Roe’s agreement they own the cows, machinery and pay for labour, but fixed assets like fencing, irrigation and other farm infrastructure is owned by the landowner.

“You have different varied expenses and you share some expenses — and then at the end you split the milk income between the two parties — they’re invested in the way that you operate,” Mr Walker said.

Mr Buckley said aspiring farmers needed to move away from traditional thinking if they wanted to remain independent from corporate farming or super farms.

Vendors are liable to “draw a line” through smaller farms that are unable to make a “dent in the market”.

Mr Buckley said old neighbours in the Adelaide Hills who grew 27 acres of spuds were dropped off by a package chip manufacturer because the company “couldn’t be bothered doing the paperwork” for the relatively small amount of potatoes.

The Advertiser | 15 January 2023