Lachlan Baird, chief executive of Australia’s $2.5 billion superannuation fund, Prime Super, says that the fund is unlikely to make further commitments to investments in agriculture or rural farmland unless the government helps create more professional investment opportunities of greater scale within the market.

 

Although originally established to service the agriculture, timber, and horticulture sectors, the fund currently carries only $23 million in agriculture assets, or 0.90% of the fund’s total portfolio. At one point the fund controlled over $70 million in ag-focused assets, but drought and other factors cut asset performance.

 

Mr. Baird is calling on the government to pool smaller agriculture operations into larger entities worthy of large-scale investment, adding that ag-related infrastructure including rail, port facilities, water, and bulk handling facilities would be the most likely segments for scalability and superfund investment, given proper government involvement.

 

"As a super fund we can't go out and do that ourselves – there is too much risk involved," Mr Baird said. "I can't get past the point that government must be involved. As a nation we need to start investing in the longer term."

 

Anne Lockwood, BDO’s leader of agribusiness and food agrees, stating that potential investment opportunities would need to scale to $100 million to attract investment from super funds. "There is a lot of scaling up that needs to happen," Ms. Lockwood said, "The government needs to provide assistance for grant funding to allow business plans and projects to create such scale and remove the gap between farms and super fund investment.”