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Corporatisation of farming: helping or harming?

The corporatisation of farming has always been a contentious subject. As with everything, there are two sides to that coin. The trend toward corporatisation brings capital, economic investment can bring with it more human capital, more opportunity, and growth to smaller rural communities. Of course, there’s also the downside, corporatisation has a direct effect on smaller producers, leaving them unable to compete in the market.

Economic advantages for all

For all the press around corporatisation and foreign ownership of Australian agriculture, 99% of Australian farm businesses are family owned and operated and 88% of farmland is Australian-owned.

Corporate investment sounds intimidating, but as WA Farmers president Rhys Turton noted; “there are family farming operations that are almost bordering on the size of corporate scale”.

A recent report by Colliers International noted that corporate investment in Australian agriculture is essential for growth, which can be seen in the recent takeover of South Australian organic and sustainable pacific oyster producer, Angel Seafood.

Listed on the Australian Securities Exchange in 2018, Angel Seafood has grown from a family-operated South Australian business to the state’s largest sustainable and organic certified Pacific oyster producer. In 2022 a takeover bid from Brisbane-based agricultural fund manager Laguna Bay Group.

The $32 million takeover was supported by more than 98 per cent of shareholders and approved by the Federal Court in June. However, with Angel’s founder and CEO Zac Halman retaining a significant proportion of his shareholding and remaining involved in the business, the family element is still at play, along with the capital for an aggressive expansion. They are now looking to increase production for a growing export market using the company’s systemised farming techniques. Growing community, employment, and economic opportunities.

Corporatizing the Family

Australia has also seen instances of family or co-op corporatisation, combatting the loss of competitive edge seen by smaller producers.

When offshore corporate entities started threatening the local farms in Circular Head, Tasmania, agribusiness entrepreneur Stephen Fisher saw a way he could help locals

to “come into the industry and have some ownership in [local farms]”.

His solution was to create Circular Head Farms, which raises funds from local investors to buy properties and then finds aspiring farmers to run them. The “sharefarmers” can raise their own cows and eventually buy a stake in the farm.

The first farm was bought in 2014 and its sharefarmer now owns a herd and a 40 per cent stake in a neighbouring property. Meanwhile, Circular Head Farms has grown into a network of 11 dairies, more than 4,200 hectares of farmland and 8,500 milking cows.

References: InDaily, Small Caps, Angel Seafood,  Farm Weekly, NFF, ABC Rural,

Interesting reading: The Rise of Agricultural Sale and Leaseback Transactions in Australia, Colliers

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