National lease manager for CNH Capital, Greg Burgess, says farming is becoming corporatised.

Figures show that in 1980, about 5pc of Australian farming was corporatised.

By 2005, that proportion had increased to about 18pc, and it continues to grow.

According to ABARE, over the last 40 years the average property size has increased by over 50pc.

“Global production constraints and the growth of the biofuels industry will generate higher prices for soft commodities,” Greg Burgess forecasts.

“This will increase the appeal of corporate-style farming, where economies of scale can be achieved by reducing fixed operating costs through consolidation of smaller operations into one larger venture.”

CNH Capital says corporate style farming operations can have quite complex business structures, demanding a different approach to finance.

It’s important for them to improve cash flow and minimise tax liability, while keeping the equipment fleet up to date and fully maintained.

“Our Fully Maintained Operating Lease, for instance, is simply a rental agreement where the customer can avoid the risks associated with ownership and not have to worry about maintenance costs or residual value of the machinery at the end of the lease,” Greg Burgess says.

“New Holland Finance bears the risk on the resale of the equipment, and all scheduled servicing and maintenance is provided through the New Holland dealer network, ensuring all servicing is completed by qualified technicians, leaving farm operators to get on with the job of running the property.”

New Holland Finance offers a range of end-of-lease options. Customers can choose to return the machines and upgrade to new equipment; renew the lease on the current equipment; buy out some or all of the machines at the current market value; or simply return the equipment and walk away.