March 12, 2021

Funding the agriculture sector is good business


Last week, the government sponsored AgriFutures released a report titled ‘Investing for the Future: Why Capital investments are key to the growth of Australian agriculture’.

The National Farmers’ Federation has outlined a roadmap to grow the output of Australia’s agriculture sector to $100 billion by 2030. From a base of just over $66 billion (2020), this ambitious target will require a more than 50% increase in the sector’s contribution to Australia’s gross domestic product (GDP). The report identifies a $7.5billion dollar gap per year in funding the sector (refer table 1). Debt to equity in the sector is low at a 20% Loan to Value (refer graph 1.) on aggregate and we expect 30-40% of the annual funding gap needs to come from debt.

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