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William

William Rayner

Year of Award: 2016 Award State: South Australia Business > Finance And Insurance
Farming > General
The Churchill Fellows' Association of South Australia Churchill Fellowship to investigate alternative finance structures for Australian family farmers - USA, Canada, China
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Findings and recommendations:

Australian farmers are more dependent than farmers in both the United States and Canada upon traditional bank debt to fund their ongoing operation and business growth. In order to realise the enormous potential for agriculture, and to fuel the economic and social benefits family farmers provide to the Australian economy, we should be investigating ways to deepen and broaden the sources of capital sources available to the sector. While there is no ‘simple fix’ that would provide for this outcome, this report provides four key 6 recommendations to encourage greater investment in agriculture and to ensure the ongoing vibrancy and competitiveness of our family farming sector. These recommendations are:

  1. To encourage both family farmers and the institutional investment community to become ‘investor ready’. This will be achieved by improving financial structures and literacy, and using better data and benchmarking tools to allow for better investment decisions. The application of better data will allow for better risk management, and therefore reduce the cost of capital to the sector. Becoming investor ready will also require market participants to pool assets and/or resources to provide the scale required to attract most institutional investors.
  2. Contemplate and address cultural issues presented by (or preventing) greater use of alternative capital structures in the family farming unit.
  3. Encourage government to reduce the structural barriers to institutional investment in the sector – with a particular focus on global funds management and asset allocation within the domestic superannuation sector.
  4. Encourage a deeper ‘fit for purpose’ suite of risk management tools available to family farmers. This is likely to include a form of ‘multi-peril’ insurance to encourage broader investment in the sector, with an additional potential benefit being reducing the role of government in supporting farmers experiencing drought and other natural disasters.
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