Historically farmers have owned the total assets and the equity in farming operations. Growth has typically been achieved through borrowing. An increasingly common business model is the formation of equity partnerships where the farmer provides the skills and outside sources and investors provide the working capital according to Peter Anderson of Rabobank. Such partnerships divide the land ownership from the farming business and allow each party to drive their operation separately. Mr. Anderson states that there are currently approximately 1,000 such partnerships in New Zealand but predicts that within the next five to ten years more and more high net worth individuals will be investing in this way. These partnerships also allow investors to place their money with the top producers. Historically, the top 25% of producers have been achieving 7% returns. It also gives the investors access to the methods behind the achievement of these returns.
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