How easy is it to lease farmland in today’s market?

Five years ago, conditions were perfect for producers looking to lease land to enter farming, or expand operations. But the dynamic at play today is very different.

Soaring land prices and shifting capital markets have changed the dynamic of leasing agricultural land in the past five years, shrinking the pool of land available to first-time farmers and seasoned veterans looking to expand operations.

But one industry expert says there’s never been a better time for producers looking to expand their farms.

A Rabobank report published in 2020 showed, at the time, almost 30 per cent of farmers leased some proportion of their operational area, with 11 per cent of those farmers having increased the area of leased land since 2019.

While no comparable report has been published in the past four years, Rabobank analyst Vitor Pistoia said there has been a “major shift in interest” towards lease contracts today compared to the past decade.

“It’s a question of capital, return on assets, and equity,” Mr Pistoia said.

“Lots of farmers realised they can expand their property if they leased more. Because farm prices have gone through the roof and it’s a big commitment to pay a percentage more as the market moved forward.”

Mr Pistoia said the overall pool of available land in the market, whether to buy or lease, has shrunk in the past two to three years.

“We’re still seeing the sentiment that the farmland market is good, so I should hold onto my land,” Mr Pistoia said. 


“Farmland is a scarce resource, we basically have the same cropping areas, the same pastoral areas … no-one could have foreseen the three to four years of good seasons and the skyrocketing market we’ve since seen.”

Elders head of agribusiness investment services Mark Barber said financial options were plentiful for producers, with diversification in the market.

“For most of Australia, up until 10 years ago, you’d have the big four banks and farmer equity, and the majority continue like that. Then there are pastoral houses providing stock finance, etc, but what we’re seeing is more sophistication in capital markets, more private debt … you’ve got leasing options as well,” Mr Barber said.

“Farmers have more choice than ever, they’re not compelled to take anything, and the competition has increased.”

Tasmanian-based farming organisation Sprout chief executive Jennifer Robinson said small-scale producers increasingly indicated access to land “was a major barrier” for those without intergenerational access to land, or capital investment means.

The organisation recently released a land access toolkit to provide guidance for producers and existing land owners looking to mobilise land, including lease models.

“For land owners, we hope the toolkit compels them to consider ways their land can be farmed beyond their individual capacity. For small-scale farmers looking to access land, we hope they will see that while forces working against them are pervasive, there are options,” Ms Robinson said.