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Farm Business Management fact sheet: The benefits of separating land assets from the operating business (High resolution version)

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The benefits from separating the real estate (farm land) from the operating business relate to alternative options for farm scale expansion, succession and retirement... , land owners should apply rent to the land to get an ROC. Rent paid by an operating business to the real estate business can account for any opportunity capital cost... While land values have tended to increase steadily at an average of four to five per cent over the long term, operating profits from cropping farms have become more volatile underlying the need for the operating business to leverage the land as security...