Farm Table says:
This RIRDC/AgriFutures report helps broadacre farmers make decisions concerning the leasing of land.
Leasing is considered an advantageous option as bigger businesses tend to achieve higher returns as a result of economies of scale.
The paper outlines the financial and environmental benefits of business expansion through leasing for both lessees and lessors. It also finds that many smaller landowners could be better off financially is they considered leasing their land to larger landowners.
The methods of establishing a fair lease rate and term are discussed:
- The rate of return method.
- Rate per unit of production method.
- Percentage of expected gross margin method.
The paper acknowledges that as a result of high stock prices, there is difficulty in establishing a fair grazing lease. The paper recommends that taxation, legal and detailed financial analysis is undertaken in regards to the lease.
About the OrganisationName: AgriFutures Australia
AgriFutures Australia is a new beginning for the Rural Industries Research and Development Corporation. We are an organisation that proudly focuses on the future of Australian agriculture. We live and work in the regions and represent the interests and aspirations of farmers and rural communities.
Our vision is to grow the long-term prosperity of Australian rural industries. In practical terms, this means:
Initiatives that attract capable people into careers in agriculture, build the capability of future rural leaders, and support change makers and thought leaders.
Research and analysis to understand and address important issues on the horizon for Australian agriculture.
Research and development for established industries that do not have their own Research & Development Corporation (RDC), including the Rice, Chicken Meat, Honey Bee and Pollination, Thoroughbred Horse, Pasture Seeds, Export Fodder, Ginger and Tea Tree Oil industries.
Research and development to accelerate the establishment and expansion of new rural industries, such as Deer, Buffalo, Kangaroo and Camel Milk.