Farms need to be prepared for succession instead of preparing a successor on farm

A farm needs to be prepared for succession instead of preparing a successor on the farm, according to a book recently published by Rabobank International

Future of Farming suggests that formalising the succession, ensuring transparent communication, rethinking the governance structure and hiring a specialist to facilitate the process at an early stage are crucial steps.

However, according to Rabobank, and the farmers who contributed to the publication, even more needs to be done to enable the next generation of farmers.

The findings will be of keen interest to Ireland where the age profile of farmers and the rate of succession have been causing concern for years.

Macra president Kieran O’Dowd focused on it during his inaugural address in Charleville, Co Cork, earlier in the summer.

“There are more farmers over the age of 80 than under 35. This is unbelievable. If those statistics were applied to any other profession, trade or sector there would be an outcry and proper provision made to address the serious imbalance,” he said.

Mr O’Dowd said Ireland must also develop and promote more effective means of collaboration between farmers through partnerships, share farming and similar arrangements.

He predicted these arrangements will establish a bond and strong relationship between the parties involved and lead to increased productivity.

“A further symptom of the problem is that 48% of full-time farmers over the age of 50 do not have an identified farming successor,” he said.

The Rabobank book notes that the farming population globally is aging rapidly. In the United States, the average age of a farmer in 1974 was 45, while today it is 58. In the European Union, only 6% of farmers are under the age of 36.

The situation is similar in the Asia-Pacific region, with 52% of Australian farmers aged 55 or older, while over the past 30 years the average age of farmers in Australia increased from 44 to 55.

Bart IJntema, senior vice president, Food and Agricultural Development at Rabobank International, said the numbers show a clear problem.

“There is an undeniable trend of aging farmers while at the same time the next generation is not exactly keen on taking over the helm,” he said.

Mr IJntema said there is a need to improve the economics of farming. Farmers will have to reach out to other players in the chain and look for ways to work together, join forces, share and gain knowledge and innovate.

In the long term, this will benefit all players in the chain and result in more efficient food production.

“On an individual level, we see that the best performing and viable farms have, in 70% of the cases, a potential successor in place. So, in line with expectations, a sound economic business will enable a smooth succession.

“Additionally, the image of the agricultural sector needs some polishing to make farming a more respectable and desirable occupation.

“We need to reconnect producers with consumers, possibly using the potential of online and social media to tell the farmers’ beautiful and inspiring stories and to make people aware that farmers feed the world.”

Dutch crop farmer Joris Baecke, former chairman of CEJA, the organisation of European young farmers, said another challenge for succession is the position of farmers in the supply chain.

“Although food prices are rising, farmers’ margins have increased much less than agricultural commodities prices would suggest.

“Farmers get squeezed between highly consolidated upstream farm input suppliers and downstream customers,” he said

Rabobank International notes, however, that the world population will grow from seven billion today to nine billion in 2050.

“To feed more, longer-living, wealthier people global food production needs to increase by at least 70%. Farmers worldwide will play a vital role.”