2016-03-11 |
   |
Succession Planning Concerns for Farmers
The fifth in a series of agricultural surveys conducted by MHA MacIntyre Hudson - a member of the UK wide group of accountancy and business advisory firms MHA - reveals that, for the majority of farmers’, the “elephant in the room” topic of succession planning and handing down the business is becoming even more of an issue.
The MHA Agricultural Insight Survey was conducted in January at LAMMA 2016 and compares this year’s findings with those of 2015.
Key findings include:
-
A growing concern about succession planning and the next generation
-
Continued desire for growth and diversification, but less optimism than in 2015
-
A slight decrease in the number of those undertaking co-operative farming arrangements
-
Continued confidence among respondents in approaching their accountant as their main source of guidance and support
David Missen
David Missen, head of the MHA Agricultural Sector commented: In addition to the pressing immediate concerns about profitability and cashflow, the longer term worry about passing on the farm is becoming increasingly important. The two things are of course linked because there has to be a viable business to pass on.” 67% of those surveyed stated that succession planning was a concern with 18% declaring it was of ‘great concern’ – an increase of 7% when compared to 2015.
The survey also highlighted that diversifying into areas such as renewables, leisure & tourism and property development are areas in which farmers are keen to develop. It is hardly surprising that, with commodity prices so low and the uncertainty of Brexit, farmers want to develop an area of business over which they, potentially, have some control. David Missen remarked “diversification isn’t for everybody, but one can certainly see the attraction of developing an income which arises outside the farm – and of course many farmers have strong management skills, land and buildings. Those who can add a sound business idea and the necessary financial backing are now looking at a vast range of different opportunities.”
Of those surveyed, 44% would consult their accountant when making decisions about their business. Sound financial advice is essential whether a farmer is planning to expand or looking to hand over the reins to the next generation. Agricultural accountants are well placed to comment on both the practical and taxation aspects of the business, as well as provide an independent assessment of the business.
