Third article by Jack Langley in the Innovation Generation Conference series.

Innovation Generation Conference: Insights for Young Farmers and Ag-Based Professionals:

Part Three:

The Importance of Successful Succession Planning in Farming Families.

Successful succession planning is crucial for farming families who wish to see their legacy continue.

Succession planning involves the transfer of assets and knowledge from the older generation to the younger generation, and requires careful planning and consideration. In this article, we will discuss the importance of successful succession planning and explore some of the key elements of the process.

It cannot be understated that succession is both a difficult and complex process, however it does not need to result in either an irrevocable breakdown of relationships or a ‘for sale’ sign on the front gate. Here are a couple of vital points to remember when planning for your farm, and your family’s future.

1. Communication is Key

Successful succession and transition planning remains one of the greatest preventable issues facing rural farming families. Communication and an openness to listen are crucial for both the younger and older generation. At the heart of the transition plan is the dynamics of the family as well as ensuring that all family members are aware of the desired outcome. It is crucial that the whole family is involved in the process and that their desires and concerns are heard and addressed. This includes on and off-farm family members, as well as those who may not be interested in farming as a career.

2. Transition Mechanisms are Available

Succession planning involves many factors that can make a plan complex. However there are mechanisms available to aid in the transition. For example, a tiered approach to the transition process is common, where the transfer of assets and knowledge occurs over numerous years. This approach allows the older generation to gradually reduce their involvement in the farm while ensuring that the younger generation has the opportunity to learn and gain experience.

3. Protecting the Older Generation During Retirement

During the transition process, it is important to have protective mechanisms in place to protect the older generation during retirement. This can include financial arrangements, such as vendor financing or a reduced purchase price, to ensure that the older generation is able to retire comfortably while also enabling the younger generation to take on the farm.

A Tiered Approach to Succession Planning

The tiered approach to succession planning can involve various steps, including:

Establishing a timeline for the transition process
Identifying the skills and knowledge that need to be transferred
Creating a plan for the transfer of assets, such as land and equipment
Providing mentoring and training opportunities for the younger generation
Ensuring that all family members are aware of the desired outcome.

Successful succession planning is crucial for farming families who wish to see their legacy continue. By prioritising communication, utilising transition and protective mechanisms, and implementing a tiered approach to the process, farming families can ensure a smooth and successful transition from one generation to the next.

The links to the other articles in this series are: