Leasing, agistment, strategies for retirement

I was talking with my old friend who’s now teaching in the farm-and-forest belt down South, and his wife who I’d just met. Her parents recently sold their orchard farm and moved to the same town as their daughter, and have really enjoyed making the community change.  They had the same problem I hear over and over – no kids able to take over the farm. But he didn’t really want to just give it up. So, they subdivided and sold off some parts, then leased others, and slowly decreased the amount they worked themselves until finally it was just time to say “Enough”.

Subdividing is something we talked about with our farm, as a possibility as Mum’s retirement neared. And I’m sure that’s some of what I’ve been seeing with the multiple For Sale signs along each country road that I drive. It’s one way of reducing the amount of work in running the farm, as well as paying off capital or providing extra funds for retirement. It’s looking less likely for us though as we get closer to that time as it would need council rezoning and approval. What has turned out to be a possibility though is leasing.

There’s a lot of our farm we don’t use – with only one adult on the farm, there’s only so much time and management energy that can go into the different sections. So one orchard, the A orchard, gets managed for harvest. Several other sections get the minimal management they need to just plod along, neither productive nor dying back.  And the rest is simply left to do its own thing. But here and there, someone who knows someone who we know has said “I’m looking for…” – and that’s led to an opportunity. A rural circuit nurse needed somewhere to rent, and we had a house spare. So now she’s close to several of her patients. Someone moved into a smallholding down by our boundary that didn’t have room for his horses – and we had a spare paddock that only needed a little touchup to the fencing to be suitable for agistment. So now he’s walking distance from his horses and can easily see them and ride them daily. While I was down this last visit, we heard from another farmer down on the flats who’s aiming to expand his vegie business to a year-round concern and was looking for hillside or at least non-winter-wet land to lease for a winter crop. He came out and inspected two of our unused areas as a possibility.

Of course, this isn’t necessarily all a good thing. When you lease, you don’t have the same certainty that the person paying for your land is going to take care of it the way you would. They probably will, but you don’t know for sure. Nor can you be totally sure they’re going to do the right thing by you. It might not be deliberate, it might just be misunderstandings and wrong assumptions. Same as can trip up any contract, really. But in a rural community where everyone knows everyone, there’s social and community impacts from situations where people don’t get along as well as they could. We had a run-in with the horse man who admitted to poaching marron from a dam that he’s not supposed to be accessing. The resulting verbage reminded me that some people still seem to think that a woman will be nice about them being a dick. And oh boy, can they be wrong. But, he’s still a neighbour. And as far as we know he expects to live there til he dies. He may not have been here for a decade yet, but that will happen, and then another decade, and another. Off the top of my head I can think of two more local lease incidents where different local families joined up in what should have been win-win business situations, and things just didn’t go so well. And nobody forgets it. Makes it harder to find things to talk about across the table when you’re catching up with those families.

Leasing is of particular interest to me because it makes a certain amount of sense for my own situation. I’m not buying property anytime soon. But, if I can pull one of my various irons-in-the-fire into a feasible business plan, then I can operate it as a business in one of the less-used sections of our farm. And include leasing costs in that plan. And I admit to liking the clarity of actual business plans and lease arrangements over informal agreements. But… I guess it depends a bit on where I’m going myself, whether I’m planting tree stock (permanent land change, a lease issue) or using existing under-utilised resources, or annual-cropping, or something else entirely. Finding new uses for existing resources is possibly a more efficient way to drive family farm income, even though it’s less “clean” in terms of ownership or mutual commitments.

Which leads to value-adding businesses, and the farm businesses I’ve visited/observed in my three weeks away – the subject of my next post.

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