“Succession and what to do next were the hot topics at the GYS”
Despite the rain on Tuesday, the Great Yorkshire Show delivered once again and we enjoyed welcoming clients old and new, friends and fellow professionals to our stand. It really does demonstrate what a great county we live and work in. There was quiet optimism around with all sectors of our industry seeing a slight resurgence in pricing and with hopes of a decent harvest looming, the bank managers were hopeful of some overdraft reductions.
Many discussions were had and a common theme was succession and what should we be looking at next. Brexit clearly was a hot topic; I can’t stand listening to the doom and gloom merchants, at present it could be argued that for the agricultural sector it’s just giving us a lift and yes, we are all aware that agriculture may be used as a pawn in trade negotiations, but don’t forget we are not self-sufficient in most produce and so we have a market within our own borders. Its pleasing to see that Coop are using all British fresh meat from now and we should be supporting them and working closer with the trade to ensure this is standard practice. I believe the consumers are getting more educated in provenance and locality of food but we still need to be competitive on pricing and that’s often the issue of those trying to sell direct to consumers. When asked about what to do next, my message is for farming business to look at the opportunities and sectors that are not subsidised in order to protect for the future and split the risk and reliance on brown envelope payments.
The show is a great family occasion, often with 3 generations all present and talk turned on how to pass the farm on. For those agricultural tenants, planning a transfer of a generational tenancy requires a bit of thought and time in order to satisfy the strict requirements of the AHA 86. Don’t forget it’s the one chance for a landlord to get the farm back or negotiate a better package and I can’t stress enough how vital it is to plan early; don’t wait until death when there’s often nothing that can be done.
The financial burden of succession planning is often the biggest hurdle. If you’re an owner occupier, a vast majority of farming businesses will not be able to sustain the living costs of often 3 generations and families from the farm. Unfortunately, many have been sceptical about pensions (probably justifiably) in the past and just assume that the farm will support them, but this leads to significant added financial pressures in an already tight business. I urge you all to consider how you plan for this and that starts when you leave college. If you do see an increase in profitability, instead of ringing the machinery dealer, think about your families and the farms future; it may be more prudent to put into pensions, particularly now that they are heritable and can pass down the generations.
Family Succession Planning – Avoid the Dispute and Professional Fees