Survey finds farmers faced with dilemma

How to successfully pass the farm along to the next generation without creating a ‘‘hell of a nightmare’’ is one of the most pressing long-term issues faced by farmers, according to New Zealand’s most in-depth business survey.

‘‘Simply handing over the farm to a son or daughter and retiring from the business is becoming increasingly problematic for many farmers,’’ said Graham Turley, managing director of ANZ Commercial and Agri.

‘‘Today, like all New Zealanders, farmers are living longer so they want to continue getting an income from the business. Farms are also incredibly valuable assets and selecting an offspring to take over can create huge rifts in families.’’

ANZ has released the Agri Insights from the Privately-Owned Business Barometer, New Zealand’s most comprehensive study of privately owned businesses.

The survey provides critical insights into a key sector of the New Zealand economy.

Now in its sixth year, it questioned 4870 business owners from different parts of the economy about the issues affecting them and their views on the challenges ahead.

For the first time in its six years, the barometer included a section dedicated to agribusiness.

About 750 farmers and agribusiness owners contributed to the survey.

The barometer shows that issues of growth, planning, people, and change were tightly interwoven in the agri sector.

Farmers spoke of the challenges of managing immediate issues, such as weather, commodity prices and exchange rates, while also addressing long-term management and ownership issues.

‘‘One of the main concerns was succession – how to keep the farm in family hands but in a way that is fair and ensures the future viability of the business,’’ Mr Turley said.

‘‘The stories of contested wills and family estrangements are all too common in the rural industry.’’

In some cases farmers did not want their children to feel obliged to take over the farm and were having to balance their desire to keep the farm in the family while allowing their offspring to follow their own path.

‘‘What we’re seeing is farmers exploring new models of succession that ensure the business stays strong and all involved members of the family, including themselves, derive a long-term benefit from it and have a level of involvement they are comfortable with.’’

Family farms that have made the transition to longterm sustainable business are generally highperforming businesses that are disciplined with planning and willing to engage all stakeholders in honest discussions about the future.

‘‘These discussions have to tackle the hard issues – assets and liabilities, and the wants, needs and aspirations of each member of the family,’’ Mr Turley said.

‘‘Farms that are in a good financial position often have fewer succession issues.

‘‘Many of these owners recognise the need to involve advisers and managers in the business to inject new ideas, maximise performance and introduce new systems,’’ he said.

Like other commercial businesses, the agribusinesses surveyed were most concerned about issues they could not control.

Four of the top five issues were those over which farmers had little or no influence, such as exchange rates and the end-price of their products.

The only consistent issue of concern between agri and non-agri businesses was balancing family and