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Farming is seriously hard work and truly is a lifetime commitment with research conducted by the University of Exeter in collaboration with NFU Mutual highlighting the unique approach farmers take to retirement and succession planning.

Nearly 700 farms across England, Scotland and Northern Ireland took part in the extensive research and unsurprisingly results showed that handing down the farm can often be an extremely emotional time for those farmers who have worked hard on the land or with livestock their whole lives, with many clinging on to ownership and “the way of life” long after traditional retirement age.

Children often find it hard to approach the subject of taking over, and many are not given the keys until they themselves are middle aged or older.

Professor Matt Lobley, from the University of Exeter, led the research. He has 30 years of experience researching farm transfers.
“Farming is a way of life, and it’s an identity,” he said. “Facing up to the reality of stepping back and being no longer in charge tends to put people off.
“It’s all a bit daunting; thinking about handing over management of the business – it reminds people they’re getting old.
“There is much greater awareness of succession as an issue facing UK agriculture than there was 10 to 15 years ago, but there is still a very pronounced need to move beyond the awareness stage to actually encourage planning. That struck me as something the industry desperately needs to address.”

Other key findings from the research
• Almost half (48%) of those planning to retire or semi retire will only do so after the age of 70 (average planned retirement age was 68.6)
• 18% of farmers hadn’t made financial plans for life after work
• 43% are planning to use income from the farm to at least partly support themselves financially once they stop working full time
• 44% of those with farms less than 20 hectares in size expect to never retire, compared to 11.1% of those with farms over 200 hectares
• Likelihood of discussing plans with children also increased with farm size
• 28% of respondents have not yet identified a potential successor.

Planning for later life
Like many people, planning for later life is all too easily put off. But for farmers, it can be more difficult when your home and business are so interconnected. It is therefore encouraging that despite issues around the age at which farmers are retiring, they are nonetheless making plans:
• 82% of all respondents said that they had already made plans for financing their retirement
• Horticulture/other farmers were more likely (96.4%) to have plans for retirement income than both dairy (72.4%) and cattle/sheep (77.5%) farmers
• Very small farms were more likely to draw an income from the sale of property, but less likely to draw in income from their current farm.

Whether they plan to fully retire or not, the survey found that 43% of farmers are planning to use income from their farm in later life. Sean McCann, Chartered Financial Planner at NFU Mutual, said: “Handing on the farm doesn’t have to mean giving away the ownership of all the assets on day one. It can be helpful to think about the management of the business and ownership of the farm as separate issues.

“The farmer could look to hand over more of the day to day management of the business while retaining the ownership of the assets to a later date.

“One option favoured by a lot of farming families is to set up a partnership – which can give the younger generation a stake in the business.”

Identifying successors
Less than half of farmers have identified a successor for their farm. In addition, a third of farmers over 65 had identified a successor who was 35 years or older. A sizeable minority of farmers thus appear to be delaying retirement and retaining overall control of the farm even though they have a successor who could theoretically take over the reins.

Professor Lobley said: “There wasn’t a lot of evidence that farmers were delegating or sharing decision making, and that’s an important part of the process.

“Farmers hang on to the cheque-book into their 70s and you meet farmers in their 50s who have never signed a cheque before.”

“You have to gradually share decision making, so when the successor finally gets to run the farm as a business, they’re not thrown into the deep end.

“I try to tell farmers you can get rid of those parts of the job you don’t like, such as paperwork, or getting up at 4am for milking and stay involved in the things you do like.”
Only around half (50.7%) of respondents with children have identified a potential successor.

Professor Lobley said: “This may be indicative of a reluctance among the younger generation to pursue farming as a career – or indeed discouragement from their parents to do so.”

One family with the help of NFU Mutual, has taken steps to secure the long-term future of their farm are Gareth Hutchings, a 29-year-old second-generation farmer from Launceston and he believes it is important to address the topic sooner rather than later.

He farms sheep and cattle with his wife Jess, across four small holdings. His father Mervyn began farming when Gareth was a young boy and by the age of 12, Gareth had taken on a few of his own sheep, inspired partly by his father.

Gareth, who is the current chair of Devon Young Farmers’ Club, says: “Dad has always encouraged me and my brother Greg to go our own way and to be independent. Having our own animals was part of that really. By the time I was 16 I was renting a small plot of land and farming my sheep on it.”

The family now farm across a number of sites in and around Launceston. Next year, Gareth and his brother will split the entire operation to take things on when their father semi-retires at the age of 55. It’s a plan the family have put in place together.

Gareth says: “My situation is quite unusual really as my dad has always had quite a fixed idea on what he wants for the future. A lot of farmers simply don’t. We never sat down formally as such to discuss it, it kind of fell into place really as dad knew he wanted to pass the reins over to us. He wants to be able to see us develop and grow so it’s a great opportunity that he has given us. It’s a fantastic platform. I think he will enjoy having the choice of dipping in to do some work, or not if he doesn’t want to.”

Gareth says he would recommend every farming family considers putting a succession plan in place. He adds: “I think it’s very important. People should consider it before they need to, and sit down and have that discussion. There’s nothing worse than that decision being forced upon you when someone has passed in the family and there is no plan in place.”

Gareth and Jess have two children, a daughter and son aged 4 and 1, respectively. He’s open minded about the future and whether or not they follow their parents into the industry.

Gareth adds: “This year Jess and I are converting from farming sheep and beef to sheep and dairy. We’ve sold our beef cattle and have purchased 80 heifers. As to whether our children will one day take things on, I don’t mind if they don’t want to. It would be nice to see it though, if they did decide they want to do it in the future.”

Millie Fyfe’s experience also echoes the importance of planning early and also highlights another issue – that of bringing someone in from outside the family:

Milly lives on a mixed farm in Northamptonshire, near Rugby, with her husband Andrew and their two young boys.

While her husband farms, she runs her own Marketing agency, and their busy lives coupled with the prospect of having children prompted the couple to discuss the future with Andrew’s family.

Milly explains: “My husband was made a partner about ten years ago with his Dad and his Uncle.

“There was always the assumption we would move up to the farm one day but it was never pinpointed when we would do that and I’m a very organised person. I was thinking ‘Are we going to start a family in the bungalow down the lane?’

“Four years ago we made that change and we’re now on the family farm which is fantastic. We’re in our mid-30s and we feel very fortunate to have had those discussions early.

“Before the move, we were not on site and Andrew was getting up in the middle of the night to do checks during lambing season, now he can just roll out of bed.

“When you’ve got livestock you’ve got to be on site during those busy times, and it also helps from a security perspective as well.

“After we got married we were talking about having children, that side threw a new element into the conversation.

“It’s my husband’s family so I’ve got to be sensitive to their wishes and wants. But after having that conversation there was a huge sense of relief.”

However, handing over a farm to the next generation is not always done in one fell swoop, and as Milly explains, there are now new conversations to be had.

Milly explains: “Andrew’s Dad and his Uncle are beyond retirement age and they only know farming. Although they’re now easing off in terms of the tasks and responsibilities, I don’t think they’ll ever retire.

“The next challenge we face is bringing somebody else in because my boys are only one and two, they’re not going to be helping out too much! Next year they may bottle feed lambs but that’s it.

“My husband works very long hours, he’s on his own a lot of the time and actually our family really suffers for that.

“I suffer because I’m on my own so much with two very young children but equally my husband misses out on so much and we don’t have time to invest in our relationship. We’re like ships crossing in the night.

“There needs to be an extra pair of hands but it takes time to find the right person. It’s a big thing, because I’m not sure the family has recruited anybody before. It’s very alien to them that we’d bring somebody else into it.

“The farm works at the moment but what happens if something goes wrong and someone falls ill or there’s an accident?”

It’s clear that in common with many business owners, the challenge of succession planning for farmers is not only important, but complicated. When you throw into the mix the added uncertainty of the UK leaving the EU and the impact that will have on the industry, a lot of farmers will be thinking long and hard about the future but, Professor Lobley believes that technological innovation in agriculture is key to enticing the next generation of farmers to the industry and could help deal with the shift in payment schemes following the UK’s exit from the European Union.

“The future is going to be very different but that technological change can help speed up the transfer between the generations.

“I’ve talked to farmers who have gone over to totally robotic milking parlours and their successors are interested in that side of things, working with computers and software systems.

“Technological advances have helped attract people who hadn’t previously thought about working on the farm.”

Whatever the future does bring, change is inevitable but planning will be key.

Research notes:

  • 688 farmers (415 in England, 122 in Scotland, 151 in Northern Ireland) completed and returned a postal survey between June 2019 and January 2020.
  • Surveys sent to farms selected by DEFRA to represent the main farm types
  • On average, respondents have been running their farm for 29 years. 62% have been running it for at least 25 years and 10% for at least 50 years.
  • The original research plan was to also survey farms in Wales. However, due to various difficulties and delays in obtaining an appropriate sample, survey distribution had not commenced before the start of the COVID-19 pandemic in Spring 2020. Conducting a survey under lockdown restrictions was not deemed possible or appropriate and, since the pandemic continues to have significant implications for the farming industry (with consequences for the issues covered by the survey, making the findings incomparable with those emerging from the other UK countries, the decision was taken not to proceed with the Wales survey at this time.

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