GEOFF Daniel is involved in one of the most complex of farming enterprises yet he maintains the basics of success are simple.

Geoff says a good farm manager, either owner or employee, must understand the nature of the business and the role of technological change and be able to implement change cheaply and effectively.

    AT A GLANCE
  • Who: Geoff Daniel
  • What: corporate farming
  • Why: scale is the key
  • Were: Tumbarumba
  • Report: JOHN PARRY

He should know.

Geoff is a founding member of Growth Farms Australia, a diverse agricultural company managing 40 properties valued at $300 million across eastern Australia.

Its portfolio ranges from wool, beef and lamb, to large-scale dryland and irrigated cropping of cereal grains, oilseeds and cotton.

The total area under management is more than 80,000ha and farm sizes range from typical family farms to large-scale corporate businesses.

Geoff, who also runs his own farm at Tumbarumba, told the annual conference of the Grasslands Society recently that agriculture was continuing to move away from the traditional family farm to a more corporate model.

"Often that is driven by larger family farms which I think is the clearly the best model," Geoff said.

"We are seeing a trend towards the separation of ownership of land and the business and certainly the business and management. And this is leading to a lot of opportunity."

Geoff said the world was now looking at agriculture as an "interesting investment".

"I have been wearing out shoe leather in the big end of town for many years and the people who laughed at me five years ago when I went asking for money are now ringing us," he said.

Since the global financial crisis, agricultural land had become an asset class.

"There is a perception out there that Malthus was correct and the world is finally running out of resources," he said.

"I haven't seen any evidence for that view, but there are players out there who believe it and who are prepared to put money on it."

Then there were wealthy oil nations and some Asian countries concerned about food security.

"I am not sure how good the decisions they are making are but they are pouring billions and billions of dollars into food security, ranging from Third World countries to others like Australia," he said.

Geoff said these developments represented real opportunity.

"But if we are going to benefit from them as farmers we have to get our minds around scale," he said.

"Scale is crucial and I'm not saying getter bigger is better, nothing is that simple. But it is clear to me that farms need to be a lot bigger.

"Quite frankly, 20-30,000 DSE (dry sheep equivalents) is becoming minimal if returns on capital are going to be made."

Agriculture also needed to attract good people.

"Good people are our best asset and in some sectors of agriculture we don't have them," Geoff said.

"For generations, the smart ones have been going off to the city.

"To get the best people you need scale to employ them and compete with the city."

Geoff said that a decade ago his current partners decided to "try to do something on a decent scale".

"We were all running 50-100,000 DSE and we were starting to compete with each other, which was a worry," he said.

"We decided we needed to get together to build a seriously large enterprise.

"But we needed skills other than farming, business skills, legal skills and corporate skills, and that has been evolving over the past decade."

Geoff said the business was now of a scale where it could attract the best people, pay them "reasonably well" and take a corporate approach to deal with the opportunities that were evolving.

"Intrinsic in the business, which isn't intrinsic in most family business, is accountability, the ability to report at a corporate standard," he said.

He said the recent collapse of managed investment schemes showed that corporate governance was crucial.

And then there was continuity, Geoff said.

As for the future, Geoff said Growth Farms Australia was cognisant of the climate change debate and carbon schemes.