Reducing the Stress of Transferring the Family Farm
Teagasc recently held a very well attended workshop in Claremorris on transferring the family farm that covered all aspects of farm transfer. Andy Ryder, Drystock Advisor, Teagasc Westport tells us it is a topic that always comes up when he is meeting clients, regardless of the time of year.
Clients frequently look for information in relation to herd number transfers, leasing of land, entitlement transfers and how it could affect farm participation in existing schemes.
I have learned over the years that no two situations are the same; some families find the process very straight forward and seek help to complete the process as efficiently as possible. Sadly, other family situations can be more complex leading to tension within the family, causing unnecessary stress and worry associated with the whole process.
Farmers and their successors are often their own worst enemies when it comes to farm transfers due to a lack of communication. They rarely discuss what their intentions are and consequently, no timeline is put in place. Assumptions are made, which is not ideal in the running and growing of a business.
What are the reasons farmers are slow to engage in farm transfer?
Loss of income
Many farmers need the income generated on the farm for their personal use as they have no other source of income.
Farmers are used to making all the decisions and in a lot of cases are never questioned. Some farmers are afraid to hand over the farm as they feel they will no longer be involved. For a lot of farmers, the farm is their life and they may have no other interests.
Inability to Start the Process
This is where an advisor can help move matters on. In this case, I listen and allow the farmer to ask questions. I try to provide answers that are easy to understand. I explain what has to be done with the herd number, entitlements and potential taxation issues.
What are the issues potential successors may have?
Working on the farm but not in receipt of any income and no sign of this changing in the near future.
Young people may not want to be seen as the ‘odd-one-out’ amongst friends who may have already taken over farms.
Young farmers like to be able to try new approaches and make their own decisions in relation to the running of the farm.
Young farmers may not know what is going to happen with the farm in the future if no communication is occurring.
Some of the options available to help improve the situation and avoid conflict include:
- Lease land to a son/daughter. The farmer retains ownership of the land but the son or daughter farms the land. Everyone can receive income from the farm.
- Joint herd numbers/partnership. This is a very popular way of getting the next generation involved while still farming. It ticks a number of boxes for both parties; income, decision-making, extra labour on the farm. It allows the young farmer time to settle into farming while allowing the older farmer time to slowly reduce their involvement in the farm.
- There are a number of schemes / tax reliefs available to farms to help move the process of farm succession. Many are centred on the young farmer having an agricultural qualification. Planning is vital to ensure farms can avail of these incentives.
Planning, good communication and trust is required by all parties to complete a successful farm transfer. Working together and talking makes things easier for all concerned in the long term.