How to own a farm: An exploration of alternative ag models

Want a treechange but can’t afford farmland? See how four young farmers used alternative pathways to grab their patch of dirt.

Owning your own patch of dirt and growing food to feed the nation is the dream of many young Australians.

And there’s a growing cohort of producers-to-be without access to land or a family succession plan – along with limited exposure to agriculture – keen to tend their own plot.

Pathways to farm ownership is an “increasingly difficult goal”, according to a report by Open Food Network.

And one of the biggest barriers is the sheer cost of buying land, with a Rural Bank report putting the median price of farmland per hectare at $13,366 in Victoria.

Concessions from duty paid on farmland in Victoria are available on properties valued from $600,001 to $750,000. But median farmland prices in 2022 would make a 700ha patch of land a staggering $9.35 million, and well outside the remit of any duty concessions.

So, what are the options available for those with a desire to run their own farm, without the capital required to buy expensive farmland?

Here, we explore several alternative farm ownership models all working to lower barriers to entry.

LAND LEASE: MIKEY DENSHAM
Traditionally a relationship between a private land owner and a farmer, land lease is a common way for producers to enter the ag industry without having to stump up a deposit for a land purchase.

Mikey Densham’s journey to farming took him from his childhood home in suburban Melbourne to a farm in Israel and an urban farm in the middle of New York City, before finding his feet at a farming cooperative on Victoria’s Mornington Peninsula.

Five Tales Farm founder Mikey Densham, who came to farming via an urban farm in Manhattan, and an agricultural enterprise in Israel. Picture: Supplied

His horticulture business, Five Tales Farm, was run on leased land until 12 months ago, and grows seasonal vegetables and fruit, servicing restaurants, grocers and other local businesses.

“Always buying land was the dream … there are lots of opportunities and possibilities that come with owning land,” Mikey said. “But our own private capital at that time wasn’t huge.”

He said trying to access duty concessions from the government was “the biggest joke of my life”, as most farm properties he came across were priced well above the $750,000 threshold.

Mikey first became a market gardener as a share farmer on Mossy Willow Farm at Main Ridge, which allowed him to grow fresh produce in a way he found joyous and sustainable while connecting to consumers in his community.

Five Tales Farm was the next step, where Mikey ran his own farm on someone else’s land.

In the past 12 months, with family backing, he finally managed to buy land for the future iteration of his enterprise.

“For me, it’s a nice fusion between lifestyle and small business,” Mikey said.

“At my scale, it’s about running a robust, solid, small business that will be around enough time to make a lasting impact on us and the community at the farm gate.”

ENTERPRISE SUPPORT: HARCOURT ORGANIC FARMING COOPERATIVE
Sitting outside more definable farm ownership models, enterprise support includes incentives, funding and programs for those wanting to become involved in farming, along with older producers who want to stay involved while taking a step back.

For producers Katie and Hugh Finlay – who want to wind back their involvement in Katie’s multi-generational farm without resorting to selling – leveraging their years of experience and resources to create a collective of organic farmers leasing their land in Harcourt provides such opportunity.

Established five years ago, Harcourt Organic Farming Cooperative offers producers nine-year leases in three-year instalments, with all co-op members selling through community-supported agriculture subscriptions.

Operating on an existing stone fruit orchard – originally part of Katie’s third-generation family farm – the co-op is an “incubator” model, where burgeoning farmers can work an established farm, as opposed to their own operation on leased land, and have the benefit of the Finlays’ mentorship.

Milking on average 10 cows and producing 100 litres of milk a day, Tessa Sellar runs microdairy Sellars Dairy at HOFC, selling fresh milk and yoghurt in reusable bottles.

She said the chance to learn from and form relationships with like-minded growers was a huge advantage of the model.

“When we started the co-op, the community factor wasn’t on our radar so much. But it’s ended up being the biggest part,” Tessa said. “Farming is so isolating in general, and even though we’re producing different things, to have someone to share that with, to have someone you have just have a cup of tea with, and a talk … I’m so glad I’ve had this opportunity.”

She said leasing land compared to owning it provided an opportunity to be flexible.

Tess Sellar from Sellar farmhouse Creamery. Picture: Zoe Phillips

“To buy the land we would require for dairy in Central Victoria we’d need serious amounts of money coming from somewhere else other than dairy, it would require some kind of off-farm income, which is something we’d prefer not to be reliant on,” she said.

HOFC founder Katie said the model offered opportunity for people with relatively few skills to step into a new farming business.

“I’d urge anyone interested to get out on farm, to transition from that lovely romantic idea to the experience of doing it,” she said. “It’s hard work, but a rewarding career.”

THE START-UP: CLAIRE COATES
Investing in farming can come in a variety of models, as pork producer Claire Coates knows.

Ready to move away from farming for personal reasons in 2015, Claire established Freeland Pork on leased land near Stanhope, with the intention to step away once the business was up and running.

But she stayed heavily involved in the farm, eventually pitching the business model and the farm to investors in 2017.

The pitch was successful, and the business, established in 2018, is now based at Kyabram on land owned by the investor.

“The investors bought this farm for us to run our business model on, and they bought half of Freeland Pork,” Claire said.

“It meant we could buy more sows, fix some fences, and really kick some goals.”

As things evolved and Claire was running the business on her own, she decided to focus solely on the business side of things and outsource the farming.

Limestone Pork’s Claire Coates diversified her business by garnering investor interest in her pork farm when she was looking to step away from agriculture. She is now involved in directing the business without farming, while staying involved in agriculture. Picture: Zoe Phillips

“Outsourcing the farming is a more viable option,” Claire said. “I’m still on the property, and kept the house and five acres. The investors received a return on their investment when the farm was sold.”

Claire’s Freeland Pork business has become Limestone Pork, and she now operates as a consulting entity for the company while living on the property. She said exploring alternative pathways into agriculture was the only option for some people seeking a career in the industry.

“People are prevented from farming because they literally cannot afford to buy the dirt, that’s the cold hard reality of that. Unless they have succession or a family farm.”

THE INVESTOR: NATHAN MACPHEE’S INVEST INYA FARMER
Farmland trusts, covenants and investment structures offer a way for investors to make land available for producers without a patch of dirt of their own.

And it’s an opportunity for those not traditionally involved in agriculture, such as Invest Inya Farmer founder Nathan MacPhee.

The move from stocks and bonds to livestock and crops for Nathan was 20 years in the making.

IIF operates as a digital co-operative, through which investors can buy shares in a basket of oysters, a cow, or perhaps a row of wine grapes. The model is an opportunity for participating farmers to diversify their business and improve cashflow, while members profit from farming without owning a farm.

IIF founder Nathan MacPhee with wine maker Paul Squires. Picture: Zoe Phillips

Nathan said after 20 years working in the financial sector, he and his wife opted for a tree-change, swapping Sydney for Mansfield in North East Victoria.

“I thought, I wouldn’t mind getting into farming, before I realised I didn’t have enough land, and the reality is for the vast majority of people, even for those who want to be hands-on in farming, it’s really off-limits for the vast majority of people,” Nathan said.

“You either have to inherit funds or get really wealthy and go and buy one. I can’t buy a farm. But, what if I can buy a cow? A cow is an appreciating animal. You buy a small one, you double its weight, and double its value.”