Rising rural land prices are excluding farmers | Port Lincoln Hours


Over the past five years, Mitch Highett has watched the cost of rural land skyrocket in mid-west New South Wales and his dream of owning his own farm remains exactly that.

The 33-year-old helps manage around 300,000 hectares on dozens of properties owned by others spanning across Queensland, while he and his team additionally lease several hundred hectares.

“Over the last five years and especially the last two or three, land prices have gone crazy,” he told AAP.

“It just seems like those goal posts keep moving in leaps and bounds rather than incrementally.”

Rural property records continue to fall around his hometown of Orange, due to a combination of high yields and the “COVID effect”, which has seen an increase in people moving into the areas.

It’s an image reflected across Australia according to Mark Barber, head of agribusiness investment services.

The company’s data shows rural land grew by an average of more than 18% in the 12 months to December, with the median Australian rate standing at $7,060 per hectare.

Mr. Barber says that over the past five years, there has been an average growth of 8.8%.

“Typically, you would expect to see an average annual growth rate of 6% in land prices over a 10 to 20 year period,” he explains.

“The important thing about these numbers is the trend…and we’re seeing solid growth across the board.”

Mr Barber says strong demand from the home and institutional markets drove prices up, with the biggest increases in Western Australia and Queensland, while NSW also saw strong gains.

In the 12 months to December, WA saw rural land increase by 41%, with a median price of $6534 per hectare. Queensland recorded gains of almost 29% and NSW of more than 15%.

Orange stock and station agent Stewart Murphy says quality pasture country in the region has nearly tripled from $3,000 per acre to a record $8,900 in the last decade.

“Most of this has happened in the past four years.”

He notes that the surge has been driven by high commodity prices as the mid-west rebounds from drought, with some returning to the family farm.

“Now we see a generation coming back,” he says.

“They’ve been hanging on to (property) because they’re making money from it now and commodity prices are contributing to it, and they know it’s time to expand their operations.”

In December last year, Mr Murphy helped sell 601 hectares of cattle and sheep land just outside Orange for a record $13.225 million.

But those kinds of prices have also shut people like Mr. Highett out of the market.

“We’re talking huge sums of money for someone in my age bracket to just lay out while trying to make a living,” Mr Highett said.

“Current prices that are needed to buy a farm…we just don’t have that equity.”

It’s no wonder that when Agriculture Minister David Littleproud pledged last week to offer a ‘guarantee for future farmers’, the Orange-based farmer welcomed the plan.

Yet he wonders if she is going far enough to achieve her goal of encouraging young farmers to become homeowners.

“I would take whatever was available to help me out, but it still requires someone to bring in significant capital.”

If re-elected, the coalition says it would contribute $75 million to the program, which would guarantee up to $1 million in equity or up to 40% of the price of real estate and interest rate loans. lower interest.

A similar program called “agristarter” is already offered by the federal government, but as of February only 25 loans had been approved in the 13 months since its launch, with just $17 million of the $75 million used.

The National Farmers Federation called it a ‘failure’, while Mr Highett says neither scheme will result in a purchase for him as loan repayment capacity has yet to be met.

“The combination of having to buy that farm and then having to store that farm or set up that first crop is sometimes underestimated or unappreciated,” he says.

“It’s super difficult.”

Mr Highett says helping him and other next-generation farmers get “skin in the game” in their first five years in business is a better way for the government to ensure they can stay in the industry.

But Mr Littleproud says it is unrealistic to expect the Australian taxpayer to fund everyone who wants to get into farming.

“The future Farmer Guarantee should be complemented by an individual’s financial commitment, while the service requirements ensure the sustainability of the program and protection for Australian taxpayers,” he said.

Mr. Barber agrees that giving young farmers good business and governance skills is essential.

He says the future farmers’ guarantee is a help “but it’s not big enough to really establish someone”, he says.

“It’s much better to give young farmers a good education, good financial skills and access to this kind of capacity building.”

“The investment community is desperate for good farmers to invest with.”

This is good news for Mitch Highett who hasn’t given up hope of owning his own property and continues to “look for other ways” to raise capital, including looking for investors.

Labor has yet to say whether they will support the future Farmers’ Guarantee scheme or offer a “more effective” alternative.

“Workers are proud to support young farmers, but these loans have not worked before to help with ownership,” according to a party spokesperson.

Australian Associated Press


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