Australian budget: a positive commitment, say agri managers

Agriculture fund managers in Australia had a generally positive view of the recent Australian budget, despite general dissatisfaction among other sectors, some have told Agri Investor.

“It is business as usual, if not positive,” said Andrew Sliper, senior manager of farm investment at Aquila Capital, which  is currently fundraising for a $400 million dairy fund in Australia. “All the rhetoric surrounding the budget implied that there would be cuts to agri.”

The impact on agriculture comes down to the government’s planned spending on infrastructure, said Sliper. The government stated that it would invest A$50 billion ($46 million; €34 million) into infrastructure across Australia over the next seven years, catalysing a total of A$125 million including funding from the private sector, according to the budget website.

“Any improved transport and connections from farms to ports and the city are an advantage for us and for anyone in the agri sector,” said Sliper.

Peter Ryan, business development manager at AID Corp that is currently raising capital for direct buy-and-lease investments into Australian farmland, said that the budget has produced mixed reviews from various market participants.

“From speaking to various industry participants the view is that this year’s budget has been a tough one and the response has been mixed; you either have people who love it or people who are not happy with it,” said Ryan. “Generally the review of the budget is that the government has maintained its commitment to strengthen the sector and try to drive farm gate profitability, with funding going towards practical measures that help farmers and producers be more competitive.”

The National Farmers Federation said that the budget had largely delivered on the government’s election commitments to agriculture and acknowledged the A$110 million commitment to agriculture-specific research and development over the next four years.

“The benefits from agricultural research and development to the Australian community are enormous,” said Brent Finlay, president at NFF in a statement. “We are, however, disappointed to see major cuts to the Cooperative Research Centre Programme and the Rural Industries Research and Development Corporation.”

Other provisions for the sector included A$15 million to assist small exporters, A$8 million to improve access to agricultural and veterinary chemicals, and A$10 million in support for small exporters. It also included A$20 million to build stronger bio-security and quarantine systems that will help the country “have heightened preparedness and response capabilities,” according to Ryan.

NFF was disappointed by the abolishment of the country’s Brand for Food Programme and reduced funding for the International Agricultural Cooperation Programme and National Landcare Programme.

“The cuts to, and realignment of, the National Landcare Programme that we saw tonight will limit the ability of farmers to achieve the natural resource goals and expectations of the broader community,” said Finlay.

Other agri managers said that the budget made little difference to their business, including Paul McMahon at SLM Partners, the asset management firm currently fundraising for a A$150 million regenerative livestock fund in southern Queensland and northern New South Wales.