Time to take a long view: Taylor

15 Dec, 2014 06:35 AM
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9
 
Angus Taylor headed the management consultancy firm Port Jackson Partners before entering federal parliament.
It is time to sort out a sustainable solution - we can't keep putting band-aids on a gaping wound
Angus Taylor headed the management consultancy firm Port Jackson Partners before entering federal parliament.

FORMER banking sector advisor and Liberal Member for Hume Angus Taylor says farming urgently needs to look at longer-term solutions for success rather than get too bogged down by short-term priorities, including how the industry responds to drought.

Mr Taylor said agriculture's greatest challenge probably lay in finding sufficient long-term capital to absorb seasonal and market risks and support human resource renewal and farm enterprise expansion.

"Agriculture has been necessarily preoccupied with short-term issues, like the collapse in the live cattle trade and droughts," he said.

"However, there is an urgent need for Australia and New Zealand to overcome more fundamental problems.

"Perhaps our greatest challenge lies in raising sufficient capital to absorb risks, fund growth and support farm turnover.

"Farm debt levels are already high. Few external sources of equity capital are available to farmers, particularly in Australia.

"New structures for supporting young farmers into agriculture are desperately needed."

He said these structures could potentially include rapidly evolving equity partnerships, modern variations of share farming and using off-take agreements, as used in the mining sector.

"It is time for the banks, farm organisations and governments to sort out a sustainable solution - we can't keep putting band-aids on a gaping wound."

Mr Taylor, who headed the management consultancy firm Port Jackson Partners before entering federal parliament, was a joint author of the ANZ bank's Greener Pastures report into agriculture's capital requirements and market expectations in the Asian Century.

His agricultural experience has also included executive roles with progressive farming ventures Farm Partnerships Australia, Growth Farms Australia and Eastern Australian agriculture.

Mr Taylor welcomed ANZ's drought support package and 12-month moratorium on farm foreclosures in drought-savaged North West NSW and much of northern and western Queensland.

He called on the big lender's major rivals to match ANZ's assistance and commit to further measures themselves.

Notably, he applauded ANZ's offer of relocation assistance for farmers in drought distressed financial or productivity positions, as well as more funding for rural counselling help in the sector.

Food and agribusiness lender Rabobank responded saying the vast majority of its clients were actually managing "extremely well in the challenging drought conditions".

Rabobank had an "extremely small number of problem loans" in drought-affected regions of NSW and Queensland. It had less than 0.2 per cent of its loan portfolio in these areas subject to current receivership action.

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FarmOnline
Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media
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READER COMMENTS

wtf
16/12/2014 9:10:04 AM

The problem as I see it is not necessarily agricultures. There are many avenues for investment that are much more certain in return than the seasonal nature of Ag. Look to the stock markets which are supported by central banks, HFT and ZIRP (zero int rate policy), someone would have to be a mug to put money towards farming when returns in stock markets have been assured. As shown with AACL, external sources of capital cannot sustain returns when other lucrative options exist. Govt settings such as neg gearing further exacerbate the problem.
wtf
16/12/2014 9:17:01 AM

For farming to be a good bet for that money, we need, the rigging of stock markets to stop, setting of interest rates (which erodes savings) to stop, reserve the currency or stop allowing credit creation by banks which fuels inflation/deflation and food will no longer be an afterthought for householders. People looking for comparable returns to those offered by tax advantaged stock markets and real estate have no eyes for farming. Its up to the politicians and people to realise the level of manipulation. Perhaps its time for a leader who understands small business and is not a puppet?
Bushie Bill
17/12/2014 7:12:02 AM

wtf with his voodoo economics at its worst. Where on earth does he get these brain-dead mindless moronic ideas? Are they the product of someone with too much time on his hands and too little brain power to handle it? God help us all if this garbage represents RARA's best intellectual contribution.
John NIven
19/12/2014 8:06:15 AM

BB, wtf would have got these ideas from the advocates for labor/conditions of service etc. In many instances it is impossible to pay market price for labor, that includes a maximum wage as well as minimum.
Jock Munro
19/12/2014 9:16:19 AM

Angus is typical of the Liberal type - everything revolves around delivering more power and control to the corporate sector.
GFA
22/12/2014 4:07:48 PM

John Niven, What is your point exactly?
wtf
22/12/2014 6:01:49 PM

if the problem is getting/attracting money for ag why doesn't the govt incentivise it such as the neg gearing benefits/subsidies it gives to the financial markets/super and real estate industry? seems like it has special industries and food prodn is not one. Other options include creating money (as u let banks do that) and using it to improve things for the benefit of real industries such as ag. Who knows, moving away from a debt based monetary system to one of transparency may result in greater employment and less social problems like depression and crime.
GFA
29/12/2014 6:55:09 PM

Jon Niven, it would appear you do not know what your point is?
John Niven
1/01/2015 8:16:43 PM

Whoever GFA is Point is, farmers in Australia are subject to world commodity prices and Australian labour is controlled by Fair Work Australia, unaccountable to anybody. Profitability is declining to a point where debt free farmers are leaving the industry as is manufacturing. Don't worry old fella I take full advantage of socialised labour by shearing sheep to pay for a farm that returns about 1 % on capital outlay. We are doing OK. I hope my grandkids and great grandkids can work out who to feed and who to let starve.

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