Outlook 2015: Australian agribusiness a wise investment
3 March 2015
Commercial-scale farm businesses in Australia represent a good investment opportunity with returns that are comparable with other investment options available to the broader Australian community, according to ABARES Executive Director, Karen Schneider.
“In an analysis of risks and returns, commercial-scale farm businesses in Australia can be good investments compared with other uses of capital – they provide returns that are commensurate with their risk profile,” Ms Schneider said.
“This means that investing in Australian farms can be a good strategy for owners of capital seeking exposure to this sector of the Australian economy.
“Of the types of farm businesses we considered, cropping and vegetables offer the highest rates of return,” Ms Schneider said.
Ms Schneider presented this analysis at the ABARES Outlook 2015 Conference in Canberra today.
Conference delegates also heard from Andrew Forrest of the Minderoo Foundation, Andrew Crane, CEO of CBH Group, and Tony Johnson of EY, at a session which focused on investment in agribusiness.
Mr Forrest spoke of his passion for Australia’s agricultural sector, and the importance of investment in the agriculture sector to help Australia maximise its productive capacity and realise its huge latent potential.
Mr Forrest also outlined the Minderoo Foundation’s plans to work towards harvesting Australia’s underground water resources on a massive scale, with the aim of unlocking 5,000 gigalitres of excess water to drought-proof existing agricultural operations.
Dr Crane discussed the importance of ensuring that investment in the Australian agriculture sector by domestic or overseas business delivers the maximum possible long-term value to the Australian economy and society, saying that, to this end, growers’ farmgate returns are the best test of benefit to the economy and society.
Mr Johnson spoke of the importance of access to capital and of finding long-term, sustainable solutions to the issue of rural debt as key factors in the future prosperity and productivity of Australia’s agricultural sector.
This analysis was part of ABARES Outlook 2015 being held in Canberra on Tuesday 3 and Wednesday 4 March. Australia’s leading forum for public and private decision-makers in agriculture—Outlook marks its 45th annual conference this year with expert analysis of the business of agriculture.