Aidan Gent, General Manager-Rural, ASB
“How can I make sure the next generation can farm our land successfully in 30 years?”
It’s a question weighing on many in the rural sector, and over the tables in the ASB Farmhouse at Fieldays, there were many discussions around the way forward.
Conversations with our customers have moved from “What can I do to improve the family farm?” to “How can I set up a diversified business model that thrives across generations?”
Farmers have a deep emotional connection to their land and hard work is etched into every fence line and gateway. While that connection is part of the fabric of our country and what makes it so special, it also creates a barrier to looking at land in a way that optimises every hectare and supports inter-generational wealth.
Yet to future-proof our food and fibre industry, looking at our land differently is exactly what’s needed. When you layer generational responsibility on to rising costs, volatile markets and shifting weather patterns, we understand that the way forward isn’t easy.
Building a legacy for the future requires a shift in mindset about what a successful farm looks like 30 years from now. At ASB we’re leaning into this opportunity. Topics such as resilience, energy infrastructure, financial viability and environmental issues aren’t new, but how we’re approaching them as a bank is. Just as our customers are changing up their approach, so are we, as we work with them to build rural businesses that succeed across generations.
Farmers have spent generations turning sunlight, water and soil into top-quality products and we’re seeing a rise in farmers using these natural assets more broadly. More than a way to just manage costs, on-farm solar offers a way to build energy independence, maximise land value and reduce risk when there are extreme weather events or power outages.
With confidence among farmers growing due to stronger commodity prices and lower interest rates, now is a good time to make longer-term decisions and investments. We’re already seeing this in action, with one of our customers in Canterbury investing in solar panels for his dairy farm, shortly after we launched our market leading offer of 0% fixed interest for five years, for up to $150,000 towards eligible, on-farm solar installation costs.
As well as being a banker, I’m a farmer and a dad, and I understand the importance of every financial decision. I see our farm power bills rise each season and I’m well aware we’re only one pylon bolt or weather event away from periods of no electricity at all. From high-tech milking sheds to irrigation, farmers need affordable, reliable and sustainable energy.
The biggest barrier to installing solar is the upfront cost and ASB is helping to tackle this with innovative finance solutions. Research ASB engaged in with energy advocacy charity Rewiring Aotearoa found a 250m² ground solar system could save farmers up to $598,200 over the lifetime of the panels from avoided grid costs, at a median installation cost of $110,600. While every farm is different, in this scenario, a farmer could expect to pay back their solar set-up from as early as their 6th year of power generation.
A bigger conversation that may take time to work through is land optimisation - maximising every inch of your land’s potential. As custodians of land, diversifying means farmers are creating a blueprint for how future generations can create value. It is a decision that carries a lot of weight, and we’re supporting farmers through this.
This conversation isn’t new – there have been many pioneers leading the way with tales to tell from it, including ASB customer High Peak Station. A south-facing steep slope with average grass could be perfect for native tree planting, the old woolshed could become farm-stay accommodation, the roof could be fitted with solar panels through to infrastructure enabling more efficient red meat production, or alternate crops. These small diversifications can create surprising returns.
The first step on this journey is knowing where to start, and data can help farmers get clear on what will have the most value. Grounded in the recent Future Use of Land Report we partnered on with Lincoln University, our new Every Hectare Matters programme will support farmers to diversify and future-proof their businesses. Starting with a small group of farmers, the programme pairs participants with independent agri-consultants, who will use our new land transition model to help guide them through diversification and implementation scenarios, with wrap-around support and tailored funding from ASB to bring their new business model to life.
Finally, recent events have taught us lessons about export dependency. As someone who has watched commodity prices swing based on distant decisions, I know the worry of having your family’s future tied to markets you can’t control. It’s important to have a business model that has flexibility and simplicity in its cost structure, giving you enough resilience to weather the ups and downs.
Global uncertainty is a reminder that having a diversified market mix, a reputation for premium products on the global stage, and local connections is important to manage risk in an increasingly volatile world.
Our location gives us many strategic advantages, providing year-round growing conditions and opposite seasons to major markets, combined with our clean, green reputation on the global stage. Leveraging these natural assets to produce food and fibre will be critical to our ongoing success in premium export markets.
The real shift happens when these three strategies work together in harmony. Solar installations reduce operating costs, freeing up capital for diversification projects. Multiple revenue streams reduce dependency on volatile global markets, and local relationships provide increased stability and community connection.
The forward-thinking farmer sees their operation not as a single-purpose food producer but as a diversified rural business that creates a legacy their children will be excited to run, not obligated to continue. In today’s world, “better” doesn’t just mean a farm that’s more productive or more profitable – it means more resilient, more sustainable and more adaptable to challenges.
Our purpose at ASB is to accelerate financial, social and environmental progress for all New Zealanders. Our focus on the food and fibre industry is us living this purpose across all three interwoven strands. We recognise that rural New Zealand’s strength lies not just in our natural advantages, but in our ability to adapt and innovate. The farmers thinking about these changes today aren’t just securing their own futures – they are ensuring that rural New Zealand remains the backbone of our economy for generations to come. That’s a legacy worth building, and a future worth investing in.
For more information on ASB’s commitment to the Food and Fibre industry (and our support for farm solar and land diversification) visit asb.co.nz/food-and-fibre.
· ASB is an advertising sponsor of the Herald’s Agribusiness report