“What can I do with my small farm?” is a question I’m regularly asked. My response is usually: Well, what would you like to do and what will your farm allow you to do? If you are thinking of buying a small farm, you should always have a vision of how you would like your prospective farm to look.
|You should also have an understanding of the livestock or enterprises that you would like or are capable of running. Purchasing a small farm and realising later that it won’t suit your needs due to its location, resources or climate can be a costly and disheartening mistake.|
Things to consider before buying a small farm
Before you purchase a farm – but also if you already own one – it’s worthwhile to consider the following:
If the farm’s resources (water supply, soil type and location) are limiting and you haven’t purchased yet, keep looking. If you already own a farm, work towards an upgrade and don’t make the same mistake twice – make sure you get exactly the farm you want the second time around, particularly if you are looking for a reliable small farm income stream. It is important to be realistic. Farming is a tough game and being unrealistic about your level of farming skills or your farm’s resources will only make it harder and less likely that you will achieve your desired goals.
Farming as a hobby or lifestyle
|Small farms provide a great place for families to live and relocate to.|
A small farm purchased as a lifestyle provides a family with a great
farm experience without the farming pressures associated with relying
on making a living from the land (e.g. fluctuating commodity prices,
increasing inputs costs and extreme weather).
Many lifestyle farmers successfully achieve a self-sufficient lifestyle by producing their own food, energy and fuel.
Similar to buying a small farm for a change of lifestyle, farming as a hobby is a recreational pursuit with no intention of making money. There is often an overlap between lifestyle and hobby farmers. In both cases, income is derived from off-farm sources with no pressure to make money from the farm itself. Both farming as a hobby and as a lifestyle can be easily achieved from a farm as small as 1 hectare (2.45 acres). A farm of this size can produce vegetables, fruit, berries, nuts, and some meat along with the potential to sell excess produce.
Small farm income: Supplementary or sole income source
If the reason you decide to start farming is to provide supplementary or a full family income, then this is serious business. Setting up or running a small farm should be approached like any other business: It requires thorough preparation and planning and you must be able to dedicate sufficient time and money to the farm with the intention of making a profit. It is important to be realistic; in farming, there are more aspects than in most other businesses that are out of your control – such as weather, markets and input costs – and that can adversely impact future earnings.
Land prices of small and lifestyle farms are often disconnected from larger farming land. With farm returns averaging 1.5-2% per annum (excluding capital gains) it is unrealistic (although not impossible) to expect your farm to generate enough money to pay for the land, let alone the house and other farm improvements. The area of land needed to make an acceptable living from your small farm income will depend on the farm’s resources (irrigation, soils, infrastructure), climate and enterprise type. For extensive grazing and grain production, a minimum area of 408 hectares (1000 acres) would be required plus some supplementary income. In contrast, running an intensive farming enterprise that value adds and sells its product direct to consumers – such as flowers, chickens and fruit – can be viable on a land area less than 10 hectares (25 acres).
Where to from here?
If you are looking at buying a small farm and are unsure about whether it suits your needs, we recommend you get one of our experienced farm consultants to conduct a pre-purchase inspection.
|The author Charlie Roberts is one of the FarmStyle Australia experts, he runs this website along with a successful farm near Dubbo in Central New South Wales, so he walks the talk. Charlie has a Bachelor of Farm Management and is currently completing a Masters of Business Administration. He has worked for a number of agricultural companies in both New Zealand and Australia. He has a wealth of experience working with farmers in a range of environments.|