Document ID: chunk:federal_register_of_legislation:F2024L00767:reg:7
Version: federal_register_of_legislation:F2024L00767
Segment Type: reg
Provision Reference: reg 7
Character Range: 3906–6604

7  Whether a farm enterprise has a significant commercial purpose or character
 (1) For the purposes of subsection 13(1) of the Act, this section prescribes matters that the Secretary must take into account in deciding whether a farm enterprise has a significant commercial purpose or character for the purposes of the paragraphs 8(c) or 9(e) of the Act.
 (2) The matters are as follows:
 (a) whether the farm enterprise is being conducted efficiently and profitably;
 (b) if the farm enterprise is not being conducted efficiently and profitably—the steps being taken, or proposed to be taken within a period that is reasonable in the circumstances, to ensure that the farm enterprise is conducted efficiently and profitably;
 (c) the size and scale of the farm enterprise, including:
 (i) the level of production that is being achieved by the farm enterprise; and
 (ii) the level of production that could reasonably be expected to be achieved by the farm enterprise within a period that is reasonable in the circumstances;
 (d) the revenue generated by the farm enterprise, including whether the revenue generated over the preceding 3 financial years has on average been more than $60,000 per financial year;
 (e) the revenue that can be expected to be generated by the farm enterprise within a future period that is reasonable in the circumstances, including whether the revenue generated, on average over the period, could reasonably be expected to be more than $60,000 per financial year;
 (f) the commercial markets, and the potential commercial markets, for the agricultural, horticultural, pastoral, apicultural or aquacultural products of the farm enterprise and the extent to which they can be accessed by the farm enterprise;
 (g) the suitability of the land on which the farm enterprise is conducted, including having regard, among other things, to the agricultural, horticultural, pastoral, apicultural or aquacultural products of the farm enterprise;
 (h) the capital requirements for the farm enterprise and how those requirements are being, or are to be, met;
 (i) the operational and other costs associated with the farm enterprise, including the cost of servicing debt related to the farm enterprise;
 (j) matters that have had, and are reasonably likely to have, an adverse effect on the profitability of the farm enterprise and the steps that are being taken, or are to be taken, to manage those matters.
Note: This section does not limit the matters the Secretary may take into account in deciding whether the requirement that a farm emprise has a significant commercial purpose or character is met—see subsection 13(2) of the Act.

Division 2—Financial improvement agreements