Funding farm ownership transition to the next generation

Beef Central, 19/07/2017

Supporting young people wanting to get into agriculture is about more than talking up career options, as the massive ownership transition that has to happen is going to cost billions to fund.

According to National Australia Bank Agribusiness, successfully moving from our current ageing population of farmers to the next generation is one of the big challenges facing the industry.

The recently released Agricultural Census figures from the Australian Bureau of Statistics show the average farmer is 56-years-old, up from 54-years-old less than a decade ago.

Khan Horne

General manager of NAB Agribusiness, Khan Horne, says these days, traditional finance is not necessarily an option for those getting into the industry for the first time.

“It doesn’t matter whether you’re going to pass on the farm to the kids or to strangers, you need an income in retirement, and the person taking over the farm needs money to keep making improvements,” Mr Horne said.

“Even children taking over from their parents often need to borrow against their inheritance. Mum and dad might gift their children a million dollars’ worth of farm, but the parents may need money to live on for the next ten years because they don’t have superannuation or alternate income streams.

“Given the high cost of land, we’re seeing a lot more interest in leasing both land and livestock, share farming, the older generation acting as caretakers, and other opportunities to ease into and out of ownership.”

Mr Horne says the next generation also usually comes in with fresh ideas.

“As you get older, you tend to become more conservative without even realising. Then someone comes along with the energy of youth and wants to make changes and try new things, which often needs capital to implement.

“The key is to start the succession planning process early. To provide financial security for everyone, different family members’ needs will have to be put on the table and everyone will need to be honest about what they want the future to look like.

“It can also be good to get the next generation involved, such as helping with the books, or giving them a defined role that includes responsibility and decision-making.”

NAB has a partnership with succession planning specialists Next Rural which has been running for 5-6 years, as part of the bank’s commitment to helping clients plan for a timely and seamless transition of ownership.

This includes running seminars and organising one-on-one sessions with customers who are interested in learning more about the options available to them. NAB’s agribusiness bankers also receive training to ensure they have enough knowledge of the options to have initial conversations with clients before handing over to the experts.

“Time is your friend, so we encourage all our customers to at least start the conversation with their families now, so there can be a managed and successful transition that doesn’t start with a will,” Mr Horne said.


Source: NAB


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  1. Michael J. Vail, 20/07/2017

    Simple: rent the stock and agist/lease the land, with an option to buy the land; w/i 6-years the Stock are all branded with incoming brand ownership; at Year-6, exercise the option (or not), as Vendor Finance, for a period not exceeding nine years; with a balloon payment on or before the end of the 15-years for the balance. Rent/Lease: then Buy.

    Succession and Estate planning …

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