Selling the Family Farm: Australian Farm Succession Planning and Retirement | Episode 177

So was it that period of time that was the most significant change in terms of the water as a commodity changing? So going back, maybe let's explain what water rights look like.

um what are they and what was the change what was the change that actually happened so you're on the farm my understanding was that you the the land back in the day you had access to water rights yes but they weren't necessarily a commodity that was tradable on a market yes so

pre 2007 so before 2007 when you bought another farm or block there was a water right linked to the title so it was part of the farm so you just you bought the title and the water right came with it a certain number of megalitres and that was sort of your security or what you agree your feed with your backup Then with the millennium drought in 2001 and 2002, normally you would get, a water right is made up of delivery shares, so you would get high reliable shares and low reliable shares.

Normally, you would get your full water right plus what they used to call sales water, which is now turned into low-reliable shares.

And generally speaking, back in those in the 60s, 70s, 80s, 90s, you would get your full water right 99% of the time plus 50% sales water or low-reliable shares.

So there was always sort of water.

There were sort of good years.

Mm-hmm.

And then, you know, things started to change in 1996 because we bought another block, a neighbouring dairy farm, and added it to us.

And from that year on, the low-reliable water shears or the sails, there was never enough water to have sails.

So we'll just all of a sudden have to start to operate on just our watering time, our initial watering time, or the one, the high-reliable water shears.

So that was the start.

But then in 2001, with the dry year, Eildon was nearly empty and we got 38% of our water right.

So it was a matter of, well, farming started to change.

You couldn't operate the way we'd operated for sort of 40 years.

You had to sort of either buy feed in and sell cows.

you had to sort of pivot and do something different to survive.

And that's when cow parking become, it sort of was invented overnight.

So cow parking is where, at the time, Gippsland and Western was sort of having a bad season.

So if you had somebody who you knew or some connection, you would actually, you could send your cows for the season to them and you'd work out just a, an arrangement, generally they were just handshake arrangements and they would look after your cows, milk them, they'd get the milk, get them back in calf and then the plan was hopefully by the end of that season you'd get a bit, you know, the season would change by the winter and you could get them back and keep going.

Some people, there was all different options, there was no right or wrong way to get through it because when you did your figures, if you kept your cows and And you had limited water, so you couldn't feed them.

You had to buy feed.

And to do the figures, to buy the feed that was required, you were going to make massive losses.

So either sell your cows or you park them, try to retain your asset base, and then start again 12 months later.

So that was in 2002.