Chris Kooloos is a senior agribusiness manager with National Australia Bank. He was raised on a dairy farm in NSW, and a brother owns a dairy farm in South Gippsland.

“The bank’s role is about helping people to build up equity and build up asset ownership. Transferring ownership of assets is about accessing capital, and providing capital is the bank’s role,” he said.

Chris said there were multiple pathways to build equity and therefore wealth in the dairy industry, before investing in land ownership or expensive machinery.

People could leverage capital through banks to buy cows and add these into the herd they milked, if their arrangement with the farmer enabled that.

Chris said this was a pathway favoured by farm workers, aspiring sharefarmers, lessees and farmers’ children — adult or underage.

Buying cows-in-calf enabled them to leverage further equity, as the value of their investment effectively doubled within a few months.

Chris said bank staff could also advise on how to leverage one generation’s assets to benefit the next generation.

“This enables lending by leveraging equity for the next generation through the joint arrangement of ownership,” he said.

This was particularly helpful when succession planning enabled multiple generations of the family to be in a formal business partnership.

“Depending on the formal nature of that partnership — it could be a family or unit trust — this demonstrates to banks that there is joint or shared ownership of the farm’s assets,” Chris said.

“A plan identifies the financial roles and expectations set up for each generation — identifying who’s involved in the business, and who’s making decisions about the business.

“This can help the bank to make decisions about helping the next generation to grow their assets especially to take over the farm when that time comes.”

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