NZ Dairy Spring 2021

16 | nz dairy Corporate farming narrows equity pathways for young Richard Loader DAIRY PEOPLE » David & Barbara Hands W ith a farming career that has traversed the traditional pathway, Tararua farmers David and Barbara Hands reflect that there are now diminished opportunities for young people to build equity. “The dairy industry went through a huge growth phase and struggled for enough people with capital to take advantage of it,” says David. “Those young people were head-hunted and taken into corporate farming as managers. But we’ve got to the end of that growth phase and there are now many corporates owning multiple farms. Who will be able to purchase those farms once the investors decide they want to divest their farming interests? Unfortunately it is unlikely to be New Zealanders.” Barbara agrees, saying the advent of corporate farming has minimised the different pathways, including the traditional sharemilking ladder, that enable young people to build equity to invest in farm ownership. The 50/50 sharemilking systems enabled young farmers to progress from a 200-cow herd to 400 cows to 700, building equity along the way enabling them to buy smaller farms from farmers looking to retire. “But there’s no-one there to buy them, no-one there to milk the cows,” says David. “There needs to be various pathways worked through to help young people build their equity and skills to enable them to own those farms. The biggest thing that has broken that chain is not just corporates but our own Government’s farming pathways like Pamu, which moved away from 50/50 partnerships. They went straight to managers.” David and Barbara’s own career spans 33 years. Neither came from a farming background but decided in their mid-twenties that farming was the life they wanted to pursue. From the initial rung in the ladder as farm as- sistant, David and Barbara progressively built their equity from a series of sharemilking opportuni- ties, buying their first farm in equity partnership in Norsewood in 2007. Milking 320 cows, David and Barbara were able to buy their partners out six years later and when their son Adam and his partner Zoe returned home two years ago the four of them formed 247 Farming Ltd, a sharemilking partnership. At the end of last season, David and Barbara, operating under the name Totara Grove Farms, sold the original Norsewood farm and bought an 188 Photos: Local discussion group at the Hands farm. Milking herd in the lane (below) and a Spring cold snap (bottom). hectares farm just around the corner, continuing with 247 Farming Ltd. The farm includes an adjoining 430-hectare lease block, part of which forms the milking platform and the cow herd has gone from 320 cows to 750 cows. “If we hadn’t got bigger with the purchase of the new farm, Adam and Zoe would have bought Barbara and me out of 247 Farming Ltd, purchasing all the cows and sharemilking in their own right. “But because we got bigger, it was too big a jump for them so we will have the partnership for another two or three years. Once Adam and Zoe own the whole herd they will have the opportunity to build equity and consider their futures, whether that’s staying on the family farm as 50/50 share- milkers and buying us out of the farm or looking at opportunities beyond this farm. That will be up to them.” Barbara says one business goal has always been to get to a point where a passive income would support their retirement. “By having a sharemilker on the farm that provides that passive income, while we retain an interest in the farm.” Proud to be providing David & Barbara Hands with tailored accounting and advisory solutions. 196 Broadway Avenue, Palmerston North 11 Ward Street, Dannevirke 06 323 0309 | Logan 027 224 7679 | Aaron 027 224 7677 | Peter 027 224 7678 43 years in tractor industry Workshop & field service Hydraulic hose service Total Oil distributor Factory trained mechanics Engineering Air conditioning YOUR SPECIALIST SALES & SERVICES TEAM Y O U R O N E S T O P T R A C T O R S H O P , U S E T H E B E S T 8 Makirikiri Road, Dannevirke Ph 06 374 7731 Craig 027 246 8540 Proud to be associated with David and Barbara Hands