20 Apr Ian Robinson: Friend of the Farmer

SOURCE: The Advisor Magazine, March 2022. Written by Annie Kane

Australia’s Broker of the Year 2021, Ian Robinson of Robinson Sewell Partners, was championed at last year’s Australian Broking Awards for his dedication and hard work in supporting Australian farmers to not only manage some of the toughest conditions they’ve faced in a generation – but thrive in it too. We find out how this friend of the farmer does it.

 

Broker of the Year 2021 and Commercial Broker of the Year last year, too, recognising all your hard work in supporting your agri and commercial clients. Why do you specialise in agri loans?

I grew up in a sheep station way out west, so I guess farming has been part of my DNA from the onset. But I was a career banker from the start; a lot of it was investment banking in the early days [and] a lot of it was overseas.

When I came back (to Australia), I moved into traditional banking with a big four bank so I could transition into regional Australia.

After a period of time, I realised that a lot of farmers didn’t really know how to present their businesses to the banks… that was very apparent being a bank manager myself. And

because there was no one really specialising in that arena, we took it upon ourselves to fill that void.

And that’s when Brad [Sewell] and I stepped out, it was probably 10 years ago now, to become agri brokers.

 

Agri-finance broking is a niche area of finance broking. What skills do you need for it?

Because AG’s so varied, it’s a knowledge that takes a long time to attain. In that regard it’s very difficult. But, once you do have it, then it becomes a very powerful tool in communicating with your clients and just being able to pre-empt situations.

For example, we all know that pre-harvest is a pinch time in the liquidity cycle, so you call your croppers to see how their working capital’s going and whether they need any more assistance. It’s the small things that actually remind the client that you really understand their business and understand their needs.

If you weren’t brought up living and breathing farm life, then that has to come through via osmosis through education or joint venture partnering with people who do.

 

What do you think really has been the mark of success for Robinson Sewell?

It comes down to the strength of the relationships. I know that sounds a little bit cliché, but a lot of our clients become our second families and we’re effectively on their speed dial.

Anything that comes up front of mind, whether it’s banking or non-banking related, they do just give us a call and have a chat to share their own on-farm experiences with us and whether it has any sort of impact or relatability to the bank or bank requirements.

Those types of relationships are enduring. And it’s just amazing how you then ride shotgun with the farmers during their highs and lows; with their seasonality events or floods or fires… whatever it may be and you become a part of their family, in a sense.

I think that that endurance and that relationship translate into a good commercial business relationship, as well.

 

 

Speaking of highs and lows, Australian farmers have been busier than ever feeding the nation during COVID, but it comes off the back of a very hard few years. How has the sector been faring recently?

It’s shifted from the worst 100-year drought that all the farms experienced (pretty much across all of Australia, but definitely the eastern seaboard) and the adverse impact it had

financially and emotionally for our clients… That was hard; particularly because of the duration of it all; it went for two and a half years. And all farmers pretty much live on their farm, so they’d look out their kitchen window and see the dust blowing and the livestock suffering. That creates a burden in itself for the farmers, emotionally.

But there was really good government support underpinning farmers… there was a lot of levers that the farmers could pull from the government to help them get through those trying years. There were interest- free loans, and subsidies for fodder, and grants. And also the banks were very supportive as well. It was quite incredible to see them stand up with their fortitude and really underpin and carry the clients without putting them under duress or financial oppression as well. I take my hat off to the banks and all lenders who carried the burden with the farmers until the drought broke. So that was probably the tough side of it.

Then, breaking out of the drought into good seasonal conditions, strong commodity prices, etc. The farmers had to reposition themselves to take advantage of good conditions and pretty much absorb the financial hit and the losses that they incurred during the drought years, and brush the dust off and get themselves up for growth and expansion once again. So, a lot’s changed in the last 12 months in that regard.

 

What impact has COVID-19 had on farming?

Last year was very different compared to the previous years, in a number of ways. COVID probably didn’t have a major impact, but the driving forces and the fundamentals behind agri (AG) really shifted.

The positive side was when the drought did break, it did coincide pretty much with COVID coming into play, which lowered the interest rates. The cost of capital for farmers on borrowed money to carry on and restock from the drought had a positive impact (due to) the falling interest rates.

Also the commodity prices increased dramatically. And that helped underpin the future cash-flow position of the farmers and the profitability as well.

Obviously, the banks saw the strong fundamentals of ag and ag as an asset class for the medium and long-term. So we really saw the banks lifting up once again and providing that extra capital support for the farmers. The farmers then, in that instance, were able to capitalise on that liquidity event to really get their business back into full throttle and into 100 per cent production very quickly.

 

What advice would give to brokers writing agri loans for the first time?

If they’ve got agri lending experience coming out of a banking system, then that step is quite an easy transition to make. But getting exposed to agriculture for the very first time can be quite daunting; just because of the dynamics and the characteristics of ag in its own right. Understanding the cyclical volatilities and income and expense drivers can be quite complex. The language that is used in the industry, the jargon – is very unique.

They’ve got to understand that they’re dealing with people’s livelihoods as well. So they’ve got to be very careful that if they’re going forward and working with a particular farmer that they have the experience – or access to that experience – to be able to support that client all the way through.

If they have a knowledge gap themselves and can’t quite get a full grasp of what’s needed and required, then they can easily reach out to maybe other professionals and work on a formal or informal basis, on a joint venture basis, with other brokers who do have that experience. Then they can dovetail and ride shotgun and learn by osmosis over the course of the journey. If they do that several times, they’ll find they’ll get more competent and more experienced to be able to write those loans by themselves.

So, I think it’s really just seeking out support you need to make sure that the client has a good experience.