Marriage breakdown a ‘core concern’ for farm transfers
The possibility of a farm successor becoming divorced is a “core concern” among older farmers looking to transfer their farm.
This is making those farmers reluctant to pass on the enterprise, according to the Agricultural Land Market Review and Outlook 2019 report.
The report, compiled by Teagasc and the Society of Chartered Surveyors Ireland (SCSI), found that this was a major issue among a majority of farmers interviewed in the course of the study.
Even among farmers whose would-be successors did not have partners at the time of being interviewed, this issue “remained to the forefront for farmers regardless”.
The report also broke down the percentage of farmers in each county who are over 65 and under 35 years-of-age.
These figures found that the highest proportion of farmers in any county to be under 35 was only 8%. However, only four counties achieved this figure: Donegal; Cork; Waterford; and Monaghan.
Counties Dublin and Mayo were joint lowest for this figure, each having only 4% of their farmers aged under 35.
Co. Mayo’s position was reversed when the over-65 figures are considered; in this case, the county had the highest proportion of farmers in that age profile, at 33%.
Co. Galway was also noted for a high proportion of farmers over 65, at 32%.
The study found that farmers had “varying” opinions on the issue of capital taxation, which generally differed by farm system.
Beef farmers were particularly concerned about the negative impacts that capital tax would have on them and their successors, while dairy farmers highlighted that planning in advance of a farm transfer would avoid this impact.
Dairy farmers also noted that “regular contact” with accountants or farm advisors was a “key element” of their financial planning with regard to farm transfers.
The report says that beef farmers had less contact with these professionals.
Retirement and long-term care
In terms of retirement income, the report found more differences between dairy and beef farmers.
Dairy farmers were more likely to have a private pension, while beef farmers “faced the possibility” of depending on a contributory state pension, where “low income from farming in old age was required to provide for them financially later in life”.
The unpredictability of long-term care and the high cost of nursing homes were additional factors that made both sets of farmers reluctant to engage in land transfer.
According to the report, farmers felt that the cost of care may put too great a burden on their successor, resulting in the failure and sale of the farm.
The report summaries these findings by saying economic factors were the main reason farmers were reluctant to transfer their farms.
It argues that: “Ensuring financial security for farmers intending to retire [or semi-retire] must be a central aspect of future generational renewal policy, in order to encourage the timely entry of younger farmers to the sector, while also facilitating the gradual exit of outgoing farmers.”
This policy may include improving farmers’ knowledge of taxation reliefs, and a pension top-up for those who do not have private pensions, the report added.