Requirement for Sugarcane Farmer to Divest all Sugarcane Farming Interests

Why must a sugarcane farmer divest all sugarcane farming interests?

One of the aims of RASF is to allow older sugarcane farmers to retire from sugarcane farming. In keeping with this, it is necessary for the sugarcane farmer to dispose of all their sugarcane farming interests if they wish to participate in RASF.

Requirement to divest all sugarcane farming interests

Where both the retiring sugarcane farmer and partner own the sugarcane farm enterprise, both partners must divest all their sugarcane farming interests. Where the retiring sugarcane farmer and another person own the sugarcane farm enterprise in a partnership, only the retiring sugarcane farmer and their partner are required to divest their share.    

Shares must be divested

Shares or units that the sugarcane farmer holds in sugarcane farming co-operatives essential to the running of the sugarcane farm enterprise and shares that the sugarcane farmer owns in other sugarcane farms are required to be divested. A sugarcane farmer who owns or has shares in more than one sugarcane farm is required to divest all sugarcane farming interests and properties.

Financial assets must be withdrawn

On retirement, a requirement of RASF is that Income Equalisation Deposits, Farm Management Deposits, etc be withdrawn. The rules of these schemes do not allow the deposits to be transferred to another person. If the sugarcane farmer withdraws the deposit and subsequently gives the cash away, the amount given away cannot be disregarded under RASF, as it is not a transfer of a sugarcane farm asset. That is, deprivation rules are applicable to such gifts. Sugarcane farm encumbrances must be transferred. Any sugarcane farm encumbrances, such as mortgages and overdrafts that are taken into account in working out the net value of the farm enterprise, must also be transferred.    

Home and curtilage exemptions from divesting rules

The only exemption to the requirement to divest all sugarcane farming assets is the dwelling, house and curtilage on the sugarcane farm, where the dwelling is the sugarcane farmer's principal home.