A focus on farm succession planning on Flow FM

The issue of succession planning for family-owned farms remains a touchy one in many rural and regional communities across Australia.

Image credit: FlowMedia

Farm managers often prefer not to make conclusive long-term decisions relating to family members inheriting key assets, though the slope is a slippery one with litigation and financial burdens popping up in the long run.

It is one of the reasons the University of New England recently invited farmers to participate in a survey on the topic - the first of its kind in two decades.

Dr Lucie Newsome is a lecturer in political economy, management and employment relations and recently appeared on Flow's Country Viewpoint program to discuss the importance of listeners considering to get the process of beginning a farm succession plan underway.

"I think it's really important to do it now [farm succession planning], particularly because the financial situation for many farms has changed, there's more debt, there's a focus on pursuing economies of scale for getting bigger and taking on more land and more debt in order to maintain viability...there's also a lot of social changes," Newsome said.

"Whether farm children want to come back on the land now that there's so many opportunities for careers and work outside of agriculture, but also changing expectations of farm children about what is fair when it comes to farm succession... we're seeing less likely acceptance of the eldest son inheriting the farm and its debt and this space being more likely to be open to challenge.

"There's also been some legal developments that enable an unequal distribution like at the stage of a will to be contested under family law."

Newsome noted that as opposed to trends seen in 2004, more families are now opting to devise a succession plan as early as possible.

"We've seen a lot more family farming families get involved in succession discussions early which, from our previous research, seems to be a thing that comes up time and time again when we're talking to experts - that's been a way to bring the family on board," Newsome said.

"So rather than kind of ambushing them in the cattle yards and saying, 'this is what's happening', it helps with getting a level of acceptance and then also bringing in those professional advisors, such as accountants and lawyers and business consultants to help guide through those legalities and the financial issues.

"There's a lot of different models around transitioning slowly, so you might transition decision-making and then you might lease some property to the successor before you hand over the whole family, farm, business and land ownership to the successor.

"There's some good models coming out and we're seeing more and more families

get involved in accessing that advice, which is good to hear."