Why Now Is the Time to Plan Farm Succession, Findex Says
OPINION: Succession and long-term planning are perennial topics because it is perpetually sidelined on busy farms.
The smart guys have clear plans that include what's realistic in making farm succession decisions. The rest massage the aching hips, complain about the dry weather (or too much rain) while denying any issues exist and soldier on.
The lack of direction in farm succession and incumbent retirement staggers me. The 'oldest son gets everything days' should be a thing of the past but there are still those who would follow that path rather than plan an exit and have the tough conversations with their partner, family and trusted professionals. The worst examples are those who give this son a go and don't set anything up.
How about this as a scenario?
A local farmer in his fifties has worked his whole life for the family on the farfm after dad had passed. One day the call came - 'the block's on the market'. Mum needs a top up of cash. The reality of this is the home and job of one sibling is sold while the rest of the family have had a lifetime of employment, their own homes and plenty of time to set up. To them it is eventually a cash injection. To him and his family it is the end of a job with the house also sold and future employment prospects looking slim to non-existent.
What about this one?
A sibling works his life for the family on the farm and has verbal agreement to run it in his own account and be left it in the will. Parents pass and suddenly there is a challenge to that outcome. He and his family have had use of the farm at no cost for some time. A successful case is mounted by the other sibling that it is now their turn. Same net result as the first scenario.
The old adage 'fair is not equal and equal is not fair' successfully challenged. Hypothetical examples maybe, but more probable in 2025 that they were 20 years ago. As land values have accelerated (and we are now talking millions, not hundreds of thousands), the appetite to contest wills and win has grown.
What do the succession professionals do? You can't outsource the decision and the more meetings they facilitate the more they get paid.
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Fenton Wilson |
Now I reckon farmers are some of the toughest business people in the country. They battle rain, sunshine, market conditions, council rules, buggered joints, sheep dogs with little to no hearing and pestilence on a daily basis with gay abandonment. Yet to have the conversation with family on the future is really hard.
Time to consider a change to this scenario.
Work out what you want to do post farm and where you want to do it and work back from that. Then have the family chat before you engage anyone, but still get the professional help if you need it. Start with the bank and the accountant.
Guess what, our children are pretty bloody smart! The answers might be right in front of you but if the conversation is avoided you will never know. A business professional I work with remarked the other day that farmers are hell bent on setting things up for the kids. But if that generation are good enough to take the business forward, they will build their own success in spite of our best intentions. Retirement is a secondary thought. You don't really see this thinking in any other form of business.
Food for thought...
Fenton Wilson is a farmer and professional director who is proudly rural.
