Farm Table says:
What is the problem?
Family farming is uniquely characterized by an intimate interconnection between farm, family, work, career, tradition, and heritage. As such, the transfer of the family farm from older to newer generation is fundamental and complex. The transfer involves three inter-related processes:
- Inheritance – legal transfer
- Succession – transfer of managerial control
- Retirement – withdrawal of current manager
The aim of this report is to:
- Educate policy and decision makers who are involved in aged pensions and farm succession education programs.
- Assist landowners who looking to make more informed decisions about their inheritance.
Specifically, the report aimed to examine and compared the transfer of intangible farm business assets, including managerial skills and farm knowledge.
What did the research involve?
This project involved the replication of the International Farm Transfers Study Survey in Australia. The International Farm Transfers Study compares trends in farm succession and retirement across continents.
The Australian survey was mailed to 5,000 farm families across the country in 2004. The response rate to the survey after allowing for ‘return to senders’ was 36%, providing a sample of 1,180 farm families for analysis. The majority of respondents were full-time farmers.
What were the key findings?
- Younger farmers favoured newer forms of business structure.
- More Australian farmers prefer semi-retirement than those in other countries.
- 12% of Australian respondents had not discussed these issues with anyone although this was a low proportion in comparison with farmers in other countries.
- Just over half had identified a successor for their farm business. These successors were most likely to be a son.
- Fear of divorce within the farm family compounds and confounds farm succession planning.
- Similarities between Australian farmers and their English counterparts in attitudes and patterns in the transfer of managerial responsibility to successors, which occurred at a much slower rate than in other countries.
The report stated “As previous studies of farm succession in Australia have found, the present study revealed that issues surrounding retirement, succession, and inheritance tend not to be discussed with family members. While it cannot be concluded that all these families will face difficulties managing the succession process, the lack of communication increases the likelihood that problems will arise as plans are made on the basis of misunderstandings and mistaken expectations.”