Just half of farmers involved in a European Innovation Partnership (EIP) project in Co. Mayo have a farm succession plan, according to the findings of the project.
The official launch of the Béal Átha na Muice Farm Succession and Well Being EIP final report took place today (Wednesday, October 25) at the Fitzwilliam Hotel in Dublin.
A total of 30 farmers from Béal Átha na Muice, or Swinford, participated in the project, of whom the average age was 65.
Only 50% of participating farmers had a succession plan for the future of their farm enterprise, but none of them had a formal written plan documented and many of them had not communicated the plan to the successor.
Speaking at the launch today, Minister of State for the Department of Agriculture, Food and the Marine (DAFM), Martin Heydon, said the “biggest challenge around succession is fear of the unknown.”
“Once people have access to experts and they realise they can plan far better, it’s a much better outcome,” he said.
“I think this project was ultimately about taking fear out of the process that people weren’t sure about.
“I firmly believe this project will contribute to the best practices regarding how farmers engage in developing a comprehensive succession plan to ensure the viability of their farming enterprise for future generations,” Minister Heydon added.
EIP project
Breian Carroll of Carroll Consultancy was lead partner for the project and was also the agricultural consultant for the project.
Carroll told Agriland: “I came up with an idea that maybe we would have an EIP where the farmer would get access to all the relevant experts about farm succession, hence we had a tax expert, a solicitor, myself to make sure the farm was still viable, and the entitlements and all the other farm payments were transferable.
“In my profession as an agricultural advisor, there isn’t a day goes by that farmers aren’t talking about farm succession and the challenges with that in trying to deal with their family.
“I knew talking to people on an individual basis, and some of them were my customers for 30 years, on an individual basis, that this at the back of their mind was causing them stress.”
The project found that key issues which caused stress to farmers included:
- Deciding on who the right successor for the farm enterprise is;
- Frustration regarding potential successors not being interested in taking over the farm;
- The uncertainty of knowing the correct timing and execution of a succession plan;
- Retirement income concerns for the retiring farmer after the transfer of farm assets.
“I thought it was important to build up something like this group and I’m delighted that 85% of the farmers have said this alleviated the stress by bringing the experts together,” Carroll said.
“That was the main objective of the group – that within a couple of months they had access to all of the experts and could refer back to them,” he added.
Key findings
30 interviews were conducted, 26 were with male farmers, one was with a female farmer
and on three occasions the interview was conducted with the farmer while his wife was present.
The experts reported that where the farmer’s wife was present, she was most anxious that a
farm succession plan be commenced and seriously discussed.
When farmers were asked if they ever discussed the process of farm succession in any meaningful way (apart from making a will) with a solicitor, only seven of the 30 farmers acknowledged that they did.
11 farmers had not made a will which clearly provided for farm succession, and of the remaining 19 farmers that stated that they do have a will in place, nine of those stated that it needed to be updated, as it did not reflect their current succession plan / wishes.
Other key findings included:
- Three of the 30 farmers acknowledged that they discussed financial/taxation issues surrounding farm succession in any meaningful way with their accountant;
- 16 of the 30 interviewed, emphasised that their spouse had a good occupational pension and this appeared to be an important source of retirement income for both the farmer and his wife;
- Of the 30 farmers interviewed at the outset of the project, only one farmer was operating their farm in a farm partnership.
It was discovered that in seven of the 15 cases where a succession plan was in place, an identified successor did not have a required farm education qualifications but had the potential to complete one before reaching the age limit of a young trained farmer.
Farmer involvement
Dr. Michael Hayden of Maynooth University was lead researcher in the project, and interviewed all participating farmers.
Dr. Hayden said: “There was a very keen uptake, people were very interested.
“It was unanimous that everybody was delighted they took park in the project. A lot of them said it helped them to get information from the experts on the concerns they had.
“The succession process takes a toll on farmers stress and mental wellbeing and a lot of those stresses were alleviated by participation in this project,” Dr. Hayden added.