WITH research suggesting the world will demand 60% more agricultural output by 2050, how can our farmers attract large-scale investment to grow their businesses?
That was one of the topics debated by a panel of experts at the Rural Press Club's Australian Agriculture - Funding our Future discussion.
Queensland Country Life editor Penelope Arthur started the proceedings with a stern disclosure: "We are here today to talk about, funnily enough, the thing farmers don't like to talk about the most, and that's money,” she said.
With finance the topic of the day, a panel made up of a banker, investor and farmer fleshed out the key issues that needed to be addressed in order for Australian agriculture to prosper.
The banker, ANZ head of agribusiness Mark Bennett, explained simple steps all farmers could make now so their business was 'investment ready'.
And Blue Sky Water Partners investment director Michael Blakeney, who has entered into a agreement with farmer and Kialla Pure Foods managing director Quentin Kennedy, talked candidly about their current business relationship.
Quentin explained that he and his family did some 'soul searching' before signing on the dotted line.
Kialla Pure Foods is an organic cereal grain processing operation based on the Darling Downs.
"Initially, we didn't want to dilute our equity in our business,” he said.
"But over time, and with discussion with Michael and Blue Sky, I came to terms with the fact that if we wanted to make it work we would have to change our thinking a little bit.”
After the panel discussion wrapped up, Quentin explained it was essential to have "your house in order” before obtaining investment.
"Your finances have to be clear, concise and transparent,” he said.
Mr Bennett stressed the importance of this also.
"Often banks spend a lot of time with our customers, trying to work out what the hell is going on,” he said.
"And sometimes the numbers prove to be wrong and all of this kind of thing so we spend a lot of time with customers trying to make introductions with the people we know who can help them.”
Mr Bennett believes there needs to be more consultancy available for farmers in this field.
Quentin also stressed the need for the farm, or business, to offer a point of difference.
"I guess you have to have a compelling offer for the investment,” he said.
"They are not just going to invest in Joe Blogs the Farmer, who won't be doing anything different.
"They want what they call a step change. So what's going to change if they invest money into it?
"There has to be some sort of innovative change.”
Thinking ahead, Quentin felt farming in organics was placing him in good stead.
"Organics for me was always attractive because it was a niche market,” he said.
"I came from the wool industry and it was a commodity industry, and it's up at one point then it's down the next year, whereas organic offers a farmer, as well as the processor like ourselves, access to niche markets - and it's a sustainable realistic niche market.
"There are not too many ag-based industries that are growing at the rate of organics. It offers great opportunities.”
According to Mark Bennett investment will only come to businesses with strong financial management and reporting, as well as capable farm management. Here are some steps to get investment ready.
Control of manageable factors
Detailed business plans
Cost of production known and controlled
Use of technology
Relationship with supply chain
Collaboration to achieve success
Update your news preferences and get the latest news delivered to your inbox.