So why is a small farm in paradise up in front of you for investment ? And why did we get involved with cutting edge succession and funding organisations instead of the usual solution of calling the local real estate agent ?
In this installment of our blog I'll explain why we are working with Cultivate Farms.
Highclere farm is held in a 1/3 share and a 2/3 share. One of the owners (the 1/3 share) wants to get out of the farm and the other (the 2/3 share) wants to stay. That's me, I want to stay. This is a common farm succession dilemma; there are more kids to hand the farm on to than the farm can support, or some of the kids just don't want to farm and want to use their equity to improve their lives in other ways.
In the old days they solved this with the tradition of the eldest son inheriting the farm (or family fortune) and subsequent sons and any daughters pursued their future elsewhere. These days all the kids expect a fair solution and many a court battle and split family have resulted from an inability or unwillingness to properly address succession.
In this case the Deed of Agreement that covers the farm is relatively simple. If one party wants to exit and the other wants to stay, they have the farm valued and offer their share to the remaining party. If the remaining party can't buy them out, then the exiting party tries to sell their share to someone else for a period of two years. If the share does not sell in that time then the farm must go up for complete sale at the end of the two years.
Being "asset rich, cash poor" as they say, I was not immediately in a position to buy the 1/3. Selling 1/3 of a farm is not all that easy, and much of the interest so far has come from people who were also not in a position to buy the 1/3 share in full. The third option, sell the whole farm and try to pick up life somewhere else, is generally what most farm kids are left with when their siblings need to cash out their share of the farm.
Then I came across an article on Cultivate Farms. A new organisation exploring succession planning and working to get young farmers onto farms before it's their super fund coming out that does the buying. With a second house on the farm, Cultivate Farms might be the forum to find someone to buy that third share and start their journey as I began to scale back. So I emailed Sam and he called back and we talked through what Cultivate Farms could do and what my dreams and plans were. Highclere Farm is now on the Cultivate Farms match list (here) and hopefully we'll find a farmer who wants to take the land to the next level.
In the meantime, how to free up the other 1/3 so the owner can move on ?
In the next installment of the blog I'll tell you about DomaCom and why we are taking the plunge with a new wave of finance possibilities.
Highclere is an old English name meaning good or clear view.
Located at Scottsdale in NE Tasmania, it is 63 km northeast of Launceston and 20 km from the beach at Bridport. Scottsdale is a service town of 2,600 residents that provides for the farming community in and around Scottsdale and the smaller villages nearby. This is an agricultural area that specialises in vegetable cropping and dairy, along with sheep, beef cattle, pork production and timber plantations.
Scottsdale was featured on a Back Roads episode in July 2018. The dairy calves and sheep in the opening sequence are on Highclere Farm.
Back Roads Episode 4 - Scottsdale
Scottsdale is the sort of town where big green tractors with hay rakes park in front of the takeaway for fish and chips and small red ones buzz around on secret farmer business. You can see the round bales, dairy heifers and angus herds from the main street.
A mix of long time locals and tree changers, it’s a town that combines strong community bonds with the open welcome of people who can help re-invigorate the district after the loss of several large employers in the last decade.
Highclere Farm consists of 100 acres of basalt soil. The temperatures seldom get below 0C, and seldom above 30C. It's potato and dairy soil. We have frontage to the Brid River, mains water (untreated) connection, full power etc. and are just 2km from the edge of Scottsdale. Some areas could be cultivated, others are only suitable for grazing.
It used to be a dairy, milking 70 cows and supporting two families. Then times changed and they grew pigs and sold pork from the farm, very large operation for its time. Then the farmer died and it was mainly used for agistment by the dairy next door.
It's divided into two sections by the Sledge Track (a sealed road). 25 acres including the cottages and sheds etc, on one side and 75 acres on the other.
Highclere Farm carries sheep, mostly awassi (dairy sheep) x dorper (meat).
Both beef and dairy cattle in a variety of small and large breeds.
Chickens and geese.
There is plenty of infrastructure on the place, two cottages, a greenhouse, two chook house complexes, an implement shed, double garage, carport, large machinery shed, boiler shed, killing room, chiller, butchery, dairy, shearing shed, loafing shed, hay shed, feed bunks, piggery, cattle shelter and sheep shelter and a storage shed and silo.
Some of this was in disrepair, we have stabilised alot of it and are bringing it up to repair as we can. All the buildings are now usable.
There is a good sized vege garden, a small mixed fruit orchard and a cider apple orchard. Most fruits and vegetables will grow well here, as the temperate climate and low number of frosts provide a good growing season.
The 75 acres was put to bluegum plantation about 16 years ago and the trees were harvested in February of 2016 by the plantation company.
Before the trees were harvested
The same view after the trees were removed
There are several springs providing water as well as the river and mains water from two different mains. The farm produces a good supply of hay from 8 acres of mixed grasses and clover.
With several couriers to and from Launceston daily and flights from Launceston to Sydney and Melbourne daily there is potential to ship fresh produce to capital cities.
The soil, climate, infrastructure and proximity to markets/tourist routes mean the possible enterprises are only limited by your imagination. Just about any gourmet produce, value adding, smallgoods, grass fed livestock, medicinal or culinary herbs, tourism, education. Pretty much anything not requiring tropical conditions.
In partnership with the current farmer an Aspiring Farmer could be largely self-sufficient in home grown fresh food while bringing in an income from their farming enterprise.
Whether you are an investor, friends and family, or curious visitor we would like to welcome you to the Highclere Farm blog.
Highclere Farm is located in Scottsdale, Tasmania, Australia. Situated in the northeast corner of the island state, we have a temperate climate kept stable by the surrounding ocean.
One of the most beautiful parts of a beautiful island, Highclere Farm takes its name from the view of the surrounding farms and forests. From the top of the hill you can even catch a glimpse of the sea.
Highclere Farm is part of the Next Generation Farmers Strategy, linking retiring farmers with people who dream about farming but can't see a way to get their feet on the land. Cultivate Farms www.cultivatefarms.com.au and Domacom www.domacom.com.au combined to find a way forward to allow one farmer to step back a little and another farmer to get a start.
In the next installment of this blog I'll tell you about this wonderful farm, and in the subsequent one I will explain the process we will go through to secure the future of two families on the land.
