Early Start a Good Start for Succession Planning
Aging farmers without farm succession plans to help them step into well earned, enjoyable retirements are among the greatest concerns for realtors, financiers and farm advisors in New Zealand.
As the farmer population ages, with it the number of farmers who are considering ways and means to exit their farm properties is also growing. But with this is the risk of confusing retirement and succession. The two are two very different issues, with one having to be managed properly for the other to become a comfortable reality.
Census data shows the average age of cattle farmers in 2013 was 56, up from 53 in 2006, while sheep farmers on average were 53, up from 50 in 2006.
Dairy farmers were relative spring chickens, with an average age of 41, compared to 40 in 2006, with the slower rise in age average reflecting the steady inflow of younger farmers moving in to a rapidly expanding sector at that time.
Regardless of land use, more statistics and studies supported the need for greater thought to go into how the farm’s succession would be managed when the average of those years became too great.
Rabobank research that found less than 20% of farmer respondents had a documented succession plan, 48% had an informal plan and a third had nothing in place at all.
That was despite two thirds of respondents aiming to hand over the farm in the next 10 years as they approached 65.
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