Stuart Hulme – Holbrook, NSW
Justifying capital expenditure in the face of long-standing drought
The impact of longstanding drought has prompted the provision of government-funded grants to assist in improving infrastructure on farm and allow for capital expenditure in testing conditions. One such initiative is the (RAA) Rural Assistance Authority’s “Farm Innovation Fund.”
According to the RAA, the NSW Government has committed $1 billion to the Farm Innovation Fund under the Emergency Drought Relief Package 2019-20.
Farm owners who meet the eligibility criteria can borrow a maximum of $1 million (per project) with a total of $1,000,000 outstanding at any one time to build on-farm infrastructure. The loan team can be up to 20 years with repayments on a monthly, quarterly, half yearly or annual basis.
The loan scheme can be accessed to improve permanent farm infrastructure, ensure long term productivity and sustainable land use, as well as aiding in difficult seasonal conditions.
The improvements can lead to productivity gains, reduced costs, labour efficiency, improved animal welfare and importantly, longer-term viability and profitability for a farming operation.
One livestock producer who has accessed the fund is Stuart Hulme, a mixed sheep and grain farmer from Holbrook in NSW, who is taking the opportunity to modernise sheep handling equipment and infrastructure on his 1,600-acre property.
A fifth-generation farmer, Stuart knew this fund would assist in updating his 50-year-old sheep yards.
“The Farm Innovation Fund was a good option for investing and for infrastructure that was badly needed. It means our repayments are approximately $2,600 every quarter for the next 20 years and that’s achievable from a cashflow perspective.”
The loan scheme provides access to funding which in some cases is not viable through commercial lenders or from a cashflow perspective.
“I knew I’d be spending between $50,000 and $100,000 to get what we needed and that’s just not money we have in cashflow. We don’t have the scale to do that but whether you’re running 1,300 or 5,000 head, you still need good facilities”.
“The fund is reasonably cheap money to borrow – you just can’t get that sort of a term with commercial lending”.
Investing in new facilities was not a knee jerk reaction. Stuart had been thinking about updating the infrastructure on his property for some time and believed the fund was his best option.
“Before our new facilities, it was hard to do the job at the right time and required more person-power. Now we’ve been able to reduce our labour requirements and improve animal welfare”.
Designing yards specific to the operation was an important consideration of the project. Stuart approached ProWay and worked closely with stock yard designer Damien Halloway to achieve the final result. For Stuart having confidence in the supplier was the other key to the investment.
“I always had plenty of faith in ProWay that they knew what they were doing. When it comes to building new facilities, you have to have trust in the people you’re working with. You think about it, you go and concrete all these posts, shed and everything else, and if it’s not right you have to put up with that for a long time.”
While drought has inevitably impacted much of NSW, the RAA innovation fund and other state funding initiatives are a good catalyst for improving infrastructure in testing times. For Stuart it’s provided an opportunity too good to ignore.
“If you are lacking in infrastructure or you’ve got infrastructure that’s substandard and making your job harder, then you really want to consider doing this. It is absolutely worthwhile.”