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Rural Funds Group (ASX:RFF) buys sugar cane farms for $81.1M
  • Rural Funds Group (RFF) has purchased sugar cane farms in Maryborough, Queensland from MSF Sugar for $81.1 million
  • The farms equal to a total of 5409 hectares and of this, around 2200 hectares will be converted into a macadamia orchard farm, while the majority will be used for cropping
  • However, approximately 25 per cent of MSF land is leased to cane farmers
  • Rural Funds will offer a two-year off-take agreement to the farmers who are currently operating cane farms
  • On the market close, Rural funds is down 0.49 per cent and trading for $2.03 per share

Rural Funds Group (RFF) has purchased sugar cane farms in Maryborough, Queensland from MSF Sugar for $81.1 million.

The farms equal to a total of 5409 hectares and come with associated plant and equipment. Additionally, the purchase also includes 8060 megaliters of water entitlements.

Around 2200 hectares of this land will be converted into a macadamia orchard farm, with the majority of the remaining land being used for cropping.

The settlement is expected to occur in October 2020.

What about the cane farmers?

However, with a big chunk of the land is going to grow macadamia orchards, that leaves a lot of farmers worried. Approximately 25 per cent of MSF land is leased to farmers.

Rural Funds did say that the rates the farmers are currently paying is similar to the company's other assets and will offer the farmers a lease deal. The deal will be a two-year off-take agreement as long as they keep producing cane or there will be a reduction in the purchase price.

On the market close, Rural funds is down 0.49 per cent and trading for $2.03 per share.


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