Time to decide who will take on family farm
Has your family farm got a future? In 1979 the Northfield Committee concluded that between 60 per cent and 65 per cent of agricultural land in the United Kingdom was "owner occupied" and subsequent surveys suggest that the proportion has remained relatively unaltered, writes Louise Taylor.
Even with comparatively little data on the total amount of land being farmed it is clear that a significant proportion of UK land is controlled by farming families.
Succession planning, or the formal identification of a successor to take full responsibility for managerial control of the farm, in any family-owned business is generally considered to be an essential part of a business development strategy. However, despite its perceived importance, the subject of succession tends to receive insufficient attention in many farming families in the UK.
The lack of focus on future planning and the fact that succession tends to happen only once in each generation means there is very little opportunity for the farming family to develop and perfect this important managerial task.
In 2005 Saffrey Champness commissioned a report which concluded that "the way we pass on our wealth helps to shape the UK economy, the countryside and the society in which we live". The close interrelation between the farming business and family assets is a particular issue for farming families and a key objective is often to provide a secure and sound business for the next generation rather than focusing solely on the maximisation of profit.
There has been a suggestion in the past that the presence of children in the farming business can both encourage and inhibit the expansion and growth of the farming enterprise and therefore the attitude to risk by the family as a whole could be a key component in the succession planning process, as could the number of potential successors.
The general move away from sole trader to a more formal business structure might result in an increase in the number of stakeholders in any decision making.
The objective issues are generally easy to discuss and resolve – it is the subjective criteria which are often the "elephant in the room". This is particularly difficult where families live and work together and find it too emotive to discuss future succession.
But failing to plan means planning to fail.
* Louise Taylor is a partner in Barbers Rural Consultancy and is currently studying towards an MSc in Rural Estate & Land Management
