FORMER banking sector advisor and Liberal Member for Hume Angus Taylor says farming urgently needs to look at longer-term solutions for success rather than get too bogged down by short-term priorities, including how the industry responds to drought.
Mr Taylor said agriculture's greatest challenge probably lay in finding sufficient long-term capital to absorb seasonal and market risks and support human resource renewal and farm enterprise expansion.
"Agriculture has been necessarily preoccupied with short-term issues, like the collapse in the live cattle trade and droughts," he said.
"However, there is an urgent need for Australia and New Zealand to overcome more fundamental problems.
"Perhaps our greatest challenge lies in raising sufficient capital to absorb risks, fund growth and support farm turnover.
"Farm debt levels are already high. Few external sources of equity capital are available to farmers, particularly in Australia.
"New structures for supporting young farmers into agriculture are desperately needed."
He said these structures could potentially include rapidly evolving equity partnerships, modern variations of share farming and using off-take agreements, as used in the mining sector.
"It is time for the banks, farm organisations and governments to sort out a sustainable solution - we can't keep putting band-aids on a gaping wound."
Mr Taylor, who headed the management consultancy firm Port Jackson Partners before entering federal parliament, was a joint author of the ANZ bank's Greener Pastures report into agriculture's capital requirements and market expectations in the Asian Century.
His agricultural experience has also included executive roles with progressive farming ventures Farm Partnerships Australia, Growth Farms Australia and Eastern Australian agriculture.
Mr Taylor welcomed ANZ's drought support package and 12-month moratorium on farm foreclosures in drought-savaged North West NSW and much of northern and western Queensland.
He called on the big lender's major rivals to match ANZ's assistance and commit to further measures themselves.
Notably, he applauded ANZ's offer of relocation assistance for farmers in drought distressed financial or productivity positions, as well as more funding for rural counselling help in the sector.
Food and agribusiness lender Rabobank responded saying the vast majority of its clients were actually managing "extremely well in the challenging drought conditions".
Rabobank had an "extremely small number of problem loans" in drought-affected regions of NSW and Queensland. It had less than 0.2 per cent of its loan portfolio in these areas subject to current receivership action.