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What is Partners in Farming offering?
Partners in Farming is offering farmers an alternative to debt finance to provide the necessary financial resources to operate farms in the present tight economic climate. With lower operating returns the constant payment of interest to banks is removing a large part of the financial resources needed to run today’s modern farming operation.
Debt levels in rural Australia are spiralling out of control, and this is despite sound wealth creation through capital improvements and values on-farm. Unfortunately unrealised capital gain does not feed the family and so farming families are forced to borrow more and more money, often just to keep food in front of the family.
As an alternative, Partners in Farming will purchase up to half of your property and lease this land back to you, the farmer, at a fraction of the cost of financing debt. This will immediately free up cash from operating returns that can be used in the business for development purposes, or as added living allowances or saved for future use. Farmers will also have the option to repurchase the land back from Partners in Farming in the future. We believe that the family farm will continue to be the back-bone of the rural landscape because of the passion families have for their “block”, but through these tough economic times, and with little help expected from the government, rural families need some help.
How will the partnership work?
Partners in Farming will buy a certain percentage of the family farm, up to half, as tenants in common. This will be the part of the business presently funded by debt finance. Partners in Farming will then allow the family to manage the farm as they have always managed it because we understand the best decisions are made by the people on the ground running the show and not by people in their ivory towers away from the action.
As part owners of the land Partners in Farming will be included on the title of the land in the same proportion as the agreement. The terms of the lease will be negotiable, but as an added bonus the actual amount of lease paid can be reduced by judicious applications of fertiliser.
As a part of the agreement farmers will be required to supply quarterly financial information to Partners in Farming, and in return Partners in Farming will return management accounts that may help improve your business. We also can help with budgeting and other business related activities.
Can farmers buy back the portion of their farm held by Partners in Farming?
Definitely. It is our intention that family farms retain their family ownership whenever possible. And if that means buying back the portion held by Partners in Farming then we will not stand in the way of this transaction. In fact farmers will hold an option that can be exercised at some point in the future should they be in a position to buy back Partners in Farming’s portion.
If farmers are not making enough money on their farm why would investors be interested?
Investors will be interested in the overall return of the farm. This includes the return on the lease of the farm, and also the capital gain of the land on which the farm is based. The combination of these two returns gives the investor a real return and it is hoped that this return will be satisfactory for the investor to continue investing in agriculture.
Will investors be able to influence the operation of the farm?
Partners in Farming will be the agent for the investors and as such the family farmers will only ever have to deal with us. Investors will not know the individual farms they are investing in, rather they will be investing in a wide portfolio of farms.
Do we have to change our trading details?
Trading names will not be changed. Business will continue on as per usual. Nobody in the district need know of our involvement in your ownership structure and that implies that our integrity will be maintained always when dealing with your business.
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