A ‘lost generation’ of New Zealanders are turning their backs on agriculture, as the current crop of farm owners ages while the cost of getting onto a farm soars beyond the reach of young investors, ANZ New Zealand has warned.
With the average age of a New Zealand farmer now topping 50, the amount of capital required by the next generation to buy a farm has soared to over $1 million, forcing many to seek other careers.
According to analysis by ANZ economists, a new farmer would need on average over $1m deposit to buy their first dairy farm (including machinery, stock etc); and at least $1.5 – 2m for their first sheep/beef farm.
"It’s never been easy to get onto your own farm and it’s not getting any easier,” says Graham Turley, head of the ANZ and National Bank rural lending operations. "The industry needs skilled young people to come in, develop business skills, accumulate capital, and take over as older farmers retire."
"Yet many in the next generation cannot see how they can raise the capital to gain ownership and control. They are no longer sure there is a fulfilling career in agriculture, and many of the best young people now see better options outside farming.”
The new farm start-up package, available through ANZ and The National Bank Agri Managers, is designed to help new farmers get started in their first independent farming position, for example as a contract milker or in leasing land, as a first step towards raising further capital and buying a farm.
The package will offer at least $60 million of new lending in the first five years to help new farmers start their first agricultural business, along with expert support including coaching and seminars to help them manage their business soundly.
"These loans can be used to provide income in the first few months of a milking contract," says Graham Turley, "For example until a seasonal payment kicks in, or towards livestock and essential farm machinery such as a tractor or farm bike."
"We expect that a large majority of these packages will be taken up for contract milking. But they are available to young farmers be they sheep, beef, dairy or horticulture."
"One of the keys to success is for new farmers to take up training opportunities to develop their business and farm management skills, and then apply these in their start-up opportunities" Turley said.