Farm ownership options

Irving was instrumental in developing the bank’s Farm Ownership Options facilitation service, launched in 2008.

Why has the bank set up its Farm Ownership Options facilitation service and how does the service work?

The challenges for the young farmers of today who are looking to obtain a farm ownership stake are no different from when the initiative was launched, and as a result we've continued to focus on this initiative and further develop ways to assist this young farmer group. Our database of equity managers and investors has grown to well over 700 contacts and we now have regional specialists in place across our six regions. We also now regularly run networking events for equity managers and investors which provide those present with an opportunity to develop connections with other attendees. These events often include presentations from farmers currently involved in equity farming arrangements and give those in attendance a chance to learn from others' experiences.

What types of farm ownership structures have resulted from this initiative?

Our involvement with this initiative has taught us that no two deals are the same and that it's important to consider all ownership alternatives to create a positive outcome for all the involved parties.

Over the years we've helped get parties into a range of ownership structures including equity partnerships, lease to buys and share -farming arrangements.

What advice would you give to young farmers looking at ways to advance their agricultural career and obtain a farm ownership stake?

It's essential that you pick up as many skills in your current farming roles as possible. While onfarm skills are essential, it's also important that you learn as much as you can about managing the farming operation as a whole, and develop skills in areas such as staff management, financial management and farm governance.

You also need to be disciplined in building up your equity and be patient in waiting for the right opportunity to invest in.

High-quality equity managers with broad skill sets will always be in demand. To make sure you're on the radar when a good opportunity does arise, you need to build a good reputation within the rural community and look to create a wide network of positive people including rural professionals.

What are the key considerations to keep in mind when investigating a farm ownership opportunity with another party?

It's important when you're looking to go into partnership that you ensure there's a strong alignment of goals and values. If you do decide to proceed with a deal, it's also important that you get good quality professional advice throughout the process and that a robust and well understood shareholders agreement is put together with clearly defined exit clauses.

From our experience, the deals that are most successful are those where the individuals involved in the partnership haven't financially overstretched themselves getting into the deal and where there's a good mix of governance, financial management and communication skills.

What are the recent trends you are seeing in this area?

While the majority of deals we have been involved in over the years have been related to the dairy sector, in recent times we've seen increased inquiry from equity managers and investors who are keen to explore opportunities in other food and agri sectors. We've also seen an increase in the number of older farmers who are now open to the idea of introducing a younger equity manager into their business. This trend has highlighted the synergies between our Farm Ownership Options service and our Succession Planning service and we are now receiving a number of referrals from our Succession Planning facilitators.

• Rabobank is planning to run a number of networking events and seminars throughout 2016 to provide information on potential pathways towards farm ownership and to connect investors and equity managers. If you would like to learn more, contact your local Rabobank branch on 0800 722 622.