WORDS: Lynda Gray
The age-old question of how to attract and retain young and talented people into a farming career was tackled head-on by Rabobank’s Otago/Southland Client Council. The group launched in 2015 AgPathways, a two-day programme bringing in Rabobank staff and specialist speakers who cover a range of subjects designed to inspire and help advance participants’ agricultural careers.
But it’s not purely a skill-building exercise, Rabobank area manager Ryan Frew says.
“It’s also about providing them with a network of like-minded young farmers and also older, experienced farmers that they can talk with throughout their careers.”
Course content is split into the three themes of managing people, managing a business, and managing the land. Sessions include personality testing and communication styles, health and safety, team building and leadership; business planning, succession and farm ownership options; environmental sustainability and the 2020 Fresh Water Accord.
There’s an emphasis on the business side, particularly the why and how of business planning which participants follow by developing their own.
A ‘war stories’ Q&A session where young farmers share their stories on attaining land ownership is popular.
There were 16 participants in last year’s course run in late February and they regrouped again for a day in late July.
“They have to share their business plan and what’s happened for them since the course, so it keeps the acid on.”
The AgPathways course is open to all aspiring farm owners, including non-Rabobank clients. The next is planned for mid-year.
There’s no shortage of online advice on how to start a pathway to farming.
RMPP.co.nz covers the broad subject of farm transition and succession under ‘Pathways in Farm Ownership’. The videos and fact sheets are a first step and conversation starter. Topics include equity partnerships, performance incentives, leasing, and business structures to achieve the objectives of the farm owners.
At beeflambnz.com some of the same information is on knowledge-hub, but there’s also a module on farm business succession planning and a 42-page farm ownership transition booklet.
Previous Country-Wide stories have given good overviews and practical suggestions on business structures for leasing and equity partnerships. The recurring success factors are: having a supportive lessor, a clearly and well defined agreement, and open and frank communication.
At Longlands Station (Country-Wide, April 2016), a 2000-hectare Maniototo dryland store lamb and cattle breeding operation owned by Preston family, Logan and Fi Dowling, Phil and Jo Dowling are 50:50 equity partners in stock and plant.
The Dowlings have a five-year lease with an agreed three-year extension. The longer than standard lease agreement will hopefully spread the risk from good and bad seasons and be reflected in a higher average return on investment.
A minimum and ceiling price was agreed for sheep and cattle. Setting a price range from the outset gave Logan and Fi the figures needed to work out the partnership split.
The final price, paid two weeks after taking on the lease, was based on stock agent valuation.
The lease value is calculated on a stock unit value and paid monthly.
Owner Geoff Preston is a supportive lessor who’s gone beyond lease agreement terms by supplying fencing materials for further subdivision and building a new set of yards.
At the Burnside family’s 632ha South Otago sheep and beef farm Kyle Burnett and Heather Bell (Country-Wide, April 2018) have a nine-year lease based on a per/ha amount reviewed every three years.
They pay all costs, including fertiliser, but gorse control costs are shared.
The farm system has been developed with minimal capital outlay and high cash flow generating livestock enterprises: homebred and contract traded lambs, dairy heifer grazing and cattle trading.
Their advice is to:
- be realistic and conservative rather than over-optimistic when assessing the potential stock carrying capacity and production of a lease property.
- develop financial literacy and analytical skills to better understand what is and isn’t driving profitability.
