Goulburn Valley orchardist Mitchell McNab: ‘Limited equity’ stifling young farmers

Pitted up against investors and corporate farming families, here’s why young farmers are choosing to consolidate their farm over expansion.

Young farmers wanting to acquire viable farmland of their own are being left behind as rural land values surged by more than 25 per cent in Victoria last year.

Goulburn Valley orchardist and Agriculture Victoria’s Young Farmers Advisory councillor Mitchell McNab said record prices were making it very challenging for young farmers to purchase any land.

“They aren’t making any more land for agricultural purposes and during the last few years there has been significant demand from investors who see agriculture as a secure asset base,” he said.

“It is becoming really, really difficult for young farmers to purchase farming assets.

“The biggest challenge is when you’re younger, unless you have family members to bring you in, you have very limited equity and that is not attractive to banks.”

Increasing rural land prices mean young farmers like Mitchell McNab are finding it harder to expand or buy their own block of farmland. Picture: Zoe Phillips

Mr McNab said his family, who sold some of their land in a leaseback arrangement several years ago, was focused on consolidating their enterprises with land prices too expensive for expansion.

He also said the equity gap was affecting family succession plans as some family members don’t have the resources to buy other siblings or other parts of the family out when the time comes.

“With limited equity to buy in, you can’t allow other family members to exit,” he said.

“It relies on the family gifting the asset across without any other ways for the family to realise the assets

“There needs to be some more government assistance or more of our landholdings are going to be passed to larger business corporations, slowly driving out smaller farming families.”