Nearly half of British farmers have no formal succession plan in place for when they retire, according to research by Barclays.A quarter of those without a plan admit that it was because they had not thought about it. A further one in four (27 per cent) claim they do not have anybody to leave their farm to and 16 per cent believe they do not need a plan.
This lack of formal succession planning could add considerable risk to the agricultural sector, which contributes £85 billion to the UK economy each year and employs 3.5 million people.
An added concern highlighted by the research is that 38 per cent of farmers who do have a succession plan in place do not involve their successors in the actual running of the farm or the business on a day to day level. This lack of involvement could impact negatively in both the short and long term, losing the farm valuable time and money. Interestingly, 24 per cent of farmers who plan to hand over to a family member, which in the majority of cases is a son (75 per cent), admit that the successor should be more hands on.
Martin Redfearn, Head of Agriculture at Barclays, said, “Many farms have been in the same family for several generations. To ensure the transition from one generation to the next is done smoothly, careful planning is essential rather than it being left to chance.
“Planning who will take on both the business responsibility and the assets of a farm can be a sensitive subject and not necessarily something people want to address. However, without that vital plan, future years, if not decades, of hard work are being put at risk.“Importantly, succession planning doesn’t need to be an arduous or expensive process, but it does need to be considered far earlier and in a more formal way than it currently is. We want farmers to feel confident about their own future and that of their farm. To do that, we advise them to seek the best possible specialist advice on matters such as financial planning, tax and legal issues. There is lots of support available to help farmers make the right choices.”Meurig Raymond, National Farmers’ Union (NFU) Deputy President adds, “The importance of succession planning, and of having a live and formal plan in place, can’t be underestimated. We would encourage all our members to think about how the next generation can be brought into the family business and develop with them a more formal plan for how succession and handover will work. The NFU’s Next Generation Policy Forum members show the huge potential of the next generation, we’d encourage all our members to harness their enthusiasm and energy.”