Land Hunt

We are looking for land!

 
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WHAT

Currently, we have explored three options. We are always open to new ideas and structure, however, so please get in touch!

1) Rural/Semi-Rural Farm:

We are looking for a permanent, long-term, ‘forever’ farm.

Ideally, it will have the following:

  • Water: a minimum of 15-20,000KL/year

  • Land: large, cleared area, ready to cultivate. Minimum 2 acres.

  • A house/living structure.

  • Zoning: Rural

  • Size: Minimum 10-20 acres total

2) Community-Owned Farm:

This is a relatively new idea in the world of farming, however we believe that it is both do-able and essential if we are to retain prime agricultural land, and encourage/allow young farmers access to a career of farming.

More details at the bottom of the page, however in a summary, it will be a community-owned farm, open for public access; educational facilities; and the building of social capital. It will be managed by an annually elected board of members, whilst also being leased by a life-long tenant farmer.

A community-owned farm provides security for community, land and farmer. It allows farms to be kept as food-producing preserve


WHERE

We would ideally like to be within two-three hours of Perth, in order to allow access to strong markets, as well as to remain accessible as an educational and community facility. However, please get in touch regardless, as we are always open to considering alternatives.

Reliable, abundant, accessible, clean water is a must :)


WHY

We want to grow food, grow soil, grow farmers, offer educational spaces and courses, offer growing space for other young budding farmers. We want to stay small, stay real, and truly cultivate the passion and readiness for small, local, young farmers, that we have witnessed in our journey thus far.


HOW

In our past 1.5 years, we have experienced strong and continuous growth. We have an established place within the market; the knowledge; the experience; and the infrastructure to hit the ground running.

We have currently considered three alternative options, however are open to other conversations and financing structures:

Some of the following explanations are taken from Cultivate Farms:

Lease-to-Buy

Negotiating an option for the lessee to buy the land at the end of a lease agreement can be a good way to manage the transition of land ownership between farm businesses that are winding up, to those starting or expanding. The option to buy can be at a sale price reflecting an agreed rate of capital growth over the period, with the lessee building equity from business profit during the lease period to fund purchasing the property when the lease ends. 

For the landowner, this arrangement provides a clear pathway to liquidating their asset. Knowing the purchaser, they can potentially negotiate continuing use of their family home if that suits both parties. 

Most importantly, this arrangement helps remove conflict about who pays for on-farm upgrades that boost productivity and improve capital value. Lessees can be more comfortable making these investments on the farm knowing they can capture capital growth above the agreed sale price. Landowners can enter the lease agreement knowing they won’t be faced with unexpected expenditure requests. 

However, parties need to be aware that capital values can shift unexpectedly, so they should consider how to distribute windfalls or losses fairly if actual values are significantly more or less than the anticipated value of the land at the end of the lease. 

Benefits

* Can help manage land ownership transition between farm businesses

* Provides incentives for potential new landowners to make long term investments in productivity improvements

* Exiting landowners can manage succession planning more effectively 

Drawbacks 

* Landowners may be reluctant to commit to selling at a fixed price in future, and forgoing the benefits of rapid increases in land values. 

* Lessees run the risk of investing in the property and not being able to afford the option to buy at conclusion of lease


Vendor Finance 

Vendor finance describes the arrangement where a farm purchaser pays a deposit to the landowner to acquire the property, and the seller lends the rest of the money, which the purchaser agrees to pay back at an agreed rate. This enables the buyer to access land, and provides the exiting farmer to continue to receive a consistent return. 

For vendor finance, the borrower will generally need to pay a higher rate of interest than if deemed safe enough to obtain bank finance.

Also, property loans are generally for long periods, and it may not suit the vendor to have their money tied up for a long time, in which case the buyer is going to need to be able to access bank debt after a shorter period than a traditional loan. 

Benefits

* Allows new entrants to purchase land when bank debt is unavailable

* Provides exiting farmers with a return on their asset until they sell

* Purchaser can invest confidently in land improvements or diversification 

Drawbacks

* The interest rate paid on the loan will generally be more expensive than bank debt

* Vendors may not want their asset tied up in lending agreements for a long period


Joint Venture/Equity Partnerships

These arrangements involve the establishment of a corporate farming entity (often using trust arrangements), in which owners of the business have an equity stake as a shareholding in the business. Shareholders may be farm operators, landowners, off-farm family members, or external investors.

This structure allows a flexible approach to business management and ownership, particularly during periods of business transition. Profits from the operating business are either re-invested in the business or distributed to shareholders as dividends, while assets can either be owned or leased. Business operators are paid for their management role in the business, and via dividends if they are shareholders.

A corporate structure with responsibility to shareholders encourages improved corporate governance and accountability for business performance. 

It enables the business to attract investors for increased scale, or investment in diversification or infrastructure. This opportunity will appeal to businesses who want to be more aggressive than bank debt will allow, or want to bring in skills or market access that investors can provide. 

The separation of ownership and management also allows for better succession planning arrangements. Assets don’t need to be sold and the business scale reduced during generational transitions, as non-farming shareholders can either continue to generate returns from their shareholding, or sell their shares to another party. 

Benefits

* A corporate structure improves governance and accountability

* Can attract investors as an alternative to bank debt

* Assists keep land assets intact during succession planning 

* Remunerating farm operators realistically prices costs of production 

Drawbacks

* Farm operators sacrifice some control over the business

* Investor shareholders may impose exit strategies that need to be prepared for

* Shareholder agreements may be poorly drafted, leading to conflict about business decision-making

Community-Owned Farm

A community-owned farm provides security for community, land and farmer.

Members of the invested community purchase $50 ‘shares’ of the land, and are lifelong share holders. Members are able to purchase any amount of shares they wish.

A tenant farmer manages the farm, whilst the wider community and annually-elected board utilises the farm for education, and accesses it for social and community-based purposes. A well-run community farm can provide food; employment; education; and social capital for generations.

We want to remove as many of the industry barriers as possible, ensuring that young entrants could always have access to affordable farmland with long term thinking and the community could always enjoy it and most importantly remain a part of it.

Long after the tenant is gone, the farm will continue to offer long-term tenancies to new entrants to the agricultural industry, an opportunity which is becoming increasingly hard to find in Australian agriculture. The land will remain farmed and managed sustainably for the benefit of your community for generations to come. We may have to raise substantial funds in the short term to do so, but the share scheme provided through this model is the perfect vehicle to achieve this, simultaneously engaging and empowering your community. The farm is secure; the land is secure; the farmer is secure; and the community that both invests in and is served by the farm is secure.

Rather than a financial return, their investment provides an ability to invest in a future they believe in. A future where food systems and farming stay localised; community is involved; young aspiring farmers are easily able to gain an entrance to the industry; and farming is seen as a career-path to aspire to enter into, rather than one that is viewed upon with pity or the desire to ‘get out’.

In other models of Community-Owned Farms across the globe, most people treat these shares as a gift to the farms, as there are no dividends paid and no financial incentives or other advantages. This has led some members to claim that the shares they buy represent the best money they have ever spent: they symbolise an act of pure altruism, which not only secures the availability of ecologically grown food for all community members, but safeguards and supports the future of farming in an area which is most vulnerable; the outer areas of Perth.

It’s ambitious, but we think Perth is ready for it, and would love to see prime agricultural land beginning to be secured and owned by the community around it for generations to come, rather than continue to see more and more land be subjected to urban development. There are many older, retiring farmers wanting to sell their land, but no one is able to step up and purchase. We are willing, and we hope that, with your help, we will be able to, thus allowing other young farmers a model to adopt and to follow pursuit.

For more information, head to the links below, outlining two farms who have transitioned to community-ownership and are flourishing:

Fordhall Farm:

Tablehurst & Plaw Hatch Cooperative Farm:

Fraser Common Farm Cooperative: