CORPORATE investors increasingly see Australian agriculture as a sound long-term business to get involved in, but the trend is far from bad news for family-run enterprises.
The scary prospect of global food shortages within the 20 years has triggered a surge of offshore and local investment in Australian farming ,and the rise of a new generation of corporate investment groups keen to build diverse land portfolios.
Stiff competition for good, well-watered rural land and the soaring cost of high-tech farm equipment and marketing resources make daunting challenges for traditional family units, but agriculture would struggle to cope without their drive and on-farm ingenuity, say industry analysts.
"Family farmers may generally need to become larger or more specialised to stay competitive and extract the best economies of scale from their input costs, but agriculture needs their skills and independent thinking," said executive director of Sydney-based farm investment business, Harvest Partners, Tony Eyres.
However, making the family farm bigger and better equipped may also require a significant financial injection from non-traditional sources, Mr Eyres said.
He said outside capital and off-farm shareholders would play an increasing role in the modernisation and survival of many family enterprises.
The sheer cost of new farm technology and acquiring land was also likely to drive more farmers to consolidate.
"But you don't have to sell out the family farm," Mr Eyres said.
"It could be owned as part of a bigger business, in partnership with outsiders, or other farmers."
"And outside investors don't just bring money, they can also contribute an off-farm understanding of business or opportunities along the farm supply chain.
"In fact, in most cases farm enterprises don't just want a bucket of money brought to the table, they need market knowledge, contacts and business experience, too."
He said agribusiness was enjoying a new era of recognition as an investment asset class, drawing in potential shareholders who appreciated farming's prospects.
These partners - often with overseas agricultural ties and a greater understanding of issues like food security - were content to make a stable commitment over many years rather than expect immediate windfall profits.
They also recognised the value in retaining people with good local understanding, attuned to the climate and farming's specialist input needs.
More external capital or expert business advisors would also make family farming focus on the industry's big "sleeper issue", farm succession, said chairman of Nuffield Australia Farming Scholars, David Brownhill.
"Having a corporate-type board and reporting structure, makes you plan and act in a business-like way when handling management decisions - even sensitive family succession and career path issues," said Mr Brownhill.
He runs a cropping-based enterprise in North West NSW with his brother, Gordon, aided by two paid external capital city-based directors.
"Every business goes through generational transition, but on many farms the real decisions are often delayed until Dad and Mum are no longer fit to run the place and the next generation is well into their 40s and locked into doing things pretty much as their parents or grandparents did," he said.
"Some people might feel uneasy about exposing their business to outsiders, but these specialists - maybe a banker or marketer or a good agronomist - can bring different skills to the table and get answers quickly."
The Brownhills' 4700-hectare operation pays a dividend to its shareholder families after deducting operating expenses, including salaries and land rent.
Mr Brownhill expected various investment models would emerge for family farmers in coming years, including more share farming and use of leased land.
"I can't see family farms disappearing, but hybrids will evolve to give farmers more financial flexibility and help lift the burden of debt repayments on land purchases.
"Take away the debt factor from ag and it's relatively easy to make a good return."
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