AUSTRALIAN farmers are becoming increasingly proactive when it comes to succession planning, with close to 70 per cent reporting they are actively looking to incorporate the next generation into their business through transfer of assets or shared ownership, according to a recent survey commissioned by agribusiness specialist Rabobank.
This is up from just over 60 per cent five years ago.
For larger-scale operators – those with annual turnover above $1 million – the interest in succession planning was even greater, with 87 per cent indicating they are looking to transfer assets to, or achieve shared ownership with, the next generation. This is an increase on the 73 per cent of larger-scale operators who indicated the same intention five years ago.
With succession planning regularly identified as one of the key issues facing family farming in Australia, Rabobank head of succession planning Rosemary Bartle said the increased willingness to plan for future farm succession was encouraging news for the sector.
“Our work with farming families suggests farming businesses with a well-developed plan and family members pulling in the same direction have the greatest opportunity to increase profitability and grow wealth, enabling the farm to provide for future generations,” Ms Bartle said.
“And this bodes well for the agricultural sector, as in so many cases the most efficient business model is the family farm.”
The recent survey of 1000 Australian farmers – which formed part of Rabobank’s latest quarterly Rural Confidence Survey – found 69 per cent of farmers overall are actively planning to incorporate the next generation into their business.
“This compares with 61 per cent in mid-2014 when farmers were questioned on this topic previously,” Ms Bartle said.
The latest survey found 46 per cent of Australian farmers are looking to transfer the farm operations to the next generation as part of the succession planning process, while 23 per cent want to share ownership of the farm with the younger generation of family members. Just 19 per cent said they are intending to sell the farm and exit the industry.
Ms Bartle said this increasing trend to incorporate the younger generation into the farm business was one Rabobank had been witnessing over the past 17 years since the bank began offering specialist succession planning facilitation services. Over this time, Rabobank have facilitated 550 family farming businesses through the succession planning process.
“We are seeing a greater willingness of families to talk about the future,” she said.
“This stems from a changing culture, with family members more likely to voice their issues and concerns, and understanding that communication is the critical component of successful succession.
“We are also seeing more children wanting to come home, with the increasing economic prosperity of the sector and the exciting development in technologies.”