Born and bred in western NSW's drought- and flood-prone black soil plains, John Howard knows quite a bit about fickle farming seasons turning bumper years into long droughts, and then rebounding to good times again.
The former stock agent, grain trader and agribusiness managing director also recognises how opportune the timing is now for Australia's farm sector to make the most of its productive capacity and exceptional export demand - even as fickle seasonal risks grow more extreme.
Global shortages of grain, meat, nuts, timber and sundry other commodities suggest opportunities abound for agriculturally-astute Australia.
"Despite all sorts of potential challenges, agriculture's economic growth opportunities from a national perspective are recognised by governments and the business community as huge," said the newly installed boss of Canberra's discount farm sector lender, the Regional Investment Corporation.
Mr Howard said aside from seizing chances to reap farming's windfalls in good years, making the most of the sector's bullish prospects also required spending more on preparation for Australia's infamous seasonal extremes and climate-related setbacks.
Future decades were almost certain to bring greater weather variations, including more heat peaks, longer fire seasons and rainfall deficiencies.
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RIC, which launched during the depths of last decade's eastern states drought, has been tasked with not just helping viable farm businesses recover from those severe and costly dry (or extremely wet) weather events.
It is also assisting farmers to get a better footing so as to make the most of their production capabilities in better years.
Its government-backed 10-year loans of up to $2 million offer interest-only terms for the first five years to individuals or farming families at borrowing rates well below mainstream commercial lending terms.
Cultivating revival, new players
Approved borrowers range from those suffering financial setbacks from sudden business disruption like drought, to farmers needing balance sheet help to accelerate a business recovery by innovating to meet changed market conditions.
While 80 per cent of RIC's $3.1 billion in concessional loans approved since 2018 have helped fund management needs during drought, or post-drought restocking and replanting efforts, the specialist lender also backs young farmers to establish their own enterprises.
As well, it funds farm future-proofing initiatives preparing for severe weather disruptions, and innovative infrastructure and machinery upgrades and market diversification strategies.
In fact, its AgriStarter Loan, which assists first time producers and share farmers to establish a business, is currently RIC's busiest lending segment.
A rush of farm succession moves of late has contributed to rising demand for AgriStarter funds.
Nationally critical ag
"Government has identified that agriculture is a critical sector for the economy which needs to be encouraged and supported," Mr Howard said.
"It's a sector with exciting opportunities, but it also experiences considerable year-to-year variation in its operating environment.
"Agriculture's challenges can be just as significant as the opportunities.
"RIC is about enabling this industry to build resilience and helping people deal with those challenges and times of disruption and difficulty."
While farmers would prefer not to think about re-emerging El Nino climate patterns and the deeply challenging reality of drying conditions ahead, Mr Howard said they knew early preparation was vital to their business viability.
At the moment, requests for cheap drought recovery funds were few, but RIC's drought loans could assist preparation for hotter, drier weather patterns.
Boosting capacity
He cited farm customers who had boosted water storage capacity 70pc after taking out a discounted drought loan to expand a farm dam's capacity, and build two more.
Another had borrowed to modify their production focus towards irrigated horticulture crops, taking advantage of changing market opportunities and making more productive use of their land.
As part of its remit to foster greater business resilience, RIC's drought loan application process required borrowers to demonstrate they were planning ahead with realistic drought management strategies.
Farming is often underrated as a business sector
- John Howard, Regional Investment Corporation
"Although agriculture is one of Australia's natural capabilities, in our environment we need to encourage mechanisms to get people doing viability planning and building business resilience so they can be sustainable through the extremes we've seen in the past five years - bad drought years and some of our worst floods," Mr Howard said.
Fortunately, farming families generally possessed a strong survival streak and the intuition to anticipate and adapt to the unpredictable.
"I feel farming is often underrated as a business sector," he said.
"Farmers must be exceptionally alert and resilient to survive.
"The past year or two have thrown up plenty of challenges, from climate issues to biosecurity concerns, market access disruption, big spikes in business costs like fuel, and rising interest rates.
"Farmers tend to be quite forward thinking in managing the consequences of a lot of these potential problems.
"They have to be."
Taking the helm
Mr Howard took the helm RIC's Orange head office two months ago after inaugural CEO Bruce King departed to lead New Forest group's New Agriculture investment fund, including Lawson Grains' big West Australian and NSW property portfolio.
Previously Mr Howard worked with Brisbane-based farm sector investor, AAM Investment Group, which has almost $1 billion in pastoral, cropping, poultry and timber assets in four states and territories.
His agribusiness experience in the past two decades also spanned almost nine years in management at Peanut Company of Australia, leading PCA's business turnaround before its 2018 sale to Bega Cheese; heading alternate farm sector finance start-up CommStream, and holding procurement and senior management roles with Golden Circle and the giant Mars Australia and New Zealand food and pet products business.
Although after leaving school he first embarked on a selling agency career as an Elders trainee in Inverell, Trangie, Ivanhoe and Mudgee, then returned home to help run the family's Come-By-Chance grazing property near Walgett for three years before joining the grain trade in the 1990s.
He worked with AWB, the NSW Grains Board and the Australian Barley Board in Adelaide.
"It was a very formative time of grain market transformation as domestic markets were being steadily deregulated and the industry moved towards export deregulation," Mr Howard said.
"Being in organisations going through significant change like that provided a lot of career experience and learning opportunities."
Capital stimulates growth, promotes climate adaptation and fosters innovation and market access initiatives
- John Howard
Equally, his more recent agribusiness roles at AAM and PCA had highlighted the transforming opportunities opening to agriculture when capital was available to help support business expansion and resilience strategies.
Similarly, by assisting farmers to build resilience to change, he noted RIC loans provided a foundation to "enable opportunity".
"Capital stimulates growth, promotes climate adaptation and fosters innovation and market access initiatives," he said
Borrower feedback even showed 90pc of customers who had already repaid their loans said RIC's finance help had enabled them to increase cash flow, create new jobs and new businesses, and increase spending in their business and community.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
