Succession planning in the agriculture industrySubmitted by Agrawal Associates on September 19th, 2017
September 19, 2017
The average age of farmers is increasing but the younger generation isn’t joining the profession. This lack of succession planning is about to hit the agriculture industry in a significant way.
According to the 2011 census, more than 70 per cent of Canadian farms were operated by individuals aged 50 or older. Sean Holt, co-founder of Grand Basin Capital, told the Financial Post in 2016 that most of these farms are family-owned without a succession plan.
Many business owners address succession planning issues to ensure continuity of the family business. So why is this avoided by so many in the farming industry?
Family farm or not — it’s a business
In most professional situations, a succession plan exists because the business is seen as a business.
In many farms and other industry-related operations, emotions and tradition often get in the way. As a result, prudent decisions don’t get made. From emotional roadblocks impacting the decision-making process, to a basic lack of communication, there are obstacles this industry faces that are more unique.
Succession planning is more than a balance sheet. It requires a careful look at the organizational structure, complexity of relationships, communications systems and more.
Deferring a legacy
In many instances, a couple retains the farm assets into old age. While the children are involved in the business, they have no significant assets of their own.
Through developing a strong succession plan for the business, the farm has an opportunity to thrive and the next generation is given the chance to put their own personal stamp on the industry. The history that has been written to date about the family farm can continue for many years to come.
For assistance and guidance with your succession planning, speak to one of our advisors at Agrawal Associates Private Wealth Management.
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