Succession stakes worry for the future of farming

OPINION:Uncertainty over inheritance means land not being used to its full potential

Almost half of Irish farmers aged over 50 years do not have a farming successor and the majority of them have no worries about succession or the future of their farms. So states a report launched recently by Macra na Feirme.

Why should policymakers, farm organisations or the general public be concerned? Many would think that there should not be any concern – farm land was here before us and will remain after us and someone will always place a value on it and do something with it. Sure who would turn down the potential of inheriting a farm worth a fortune?

However, the laissez-faire attitude of “someone will do something with it” should be a concern for us because farm land is a valuable national asset and its value to the wider public and economy may have increased since the decline in prosperity.

The Government’s Harvest 2020 strategy sets ambitious targets of a 50 per cent increase in milk production and a 40 per cent increase in the value of beef output. The targets will only be achieved by maximising the potential of the land and farmers in a manner which minimises negative environmental impacts.

One of the biggest threats to Harvest 2020 is the ageing profile of Irish farmers. In 2010, more than half of our farmers were aged over 55 – these farmers will be aged 65 when it comes to Harvest time. Will they have the energy, enthusiasm and strength to reap the harvest on our behalf?

Undoubtedly, many of them will be fit and healthy and on the top of their game in terms of production as much of our mature population is today, but the industry does need an injection of new blood to carry us across the line. There are over four times more farmers aged over 65 than there is aged under 35 (26 per cent of the farmers in the country are over the retirement age).

So, you may ask, is this a case of the old farmers holding on to the farm until they are called to tend the pastures beyond the clouds? Yes and no is the answer. Some are eager to hold onto the land until the day they die, the land that has been within the family for generations and land that has been nurtured by the sweat of their forefathers. Others have encouraged and supported sons and daughters to work the family farm and entered partnership arrangements or transferred the farm asset to the next generation.

However, there are many of our older farmers who do not have a family member who is interested in farming – they may be interested in inheriting the asset after the parent dies but not in actively farming it.

Full potential

In Macra’s report, 40 per cent of farmers stated that it was important the land remained farmed by the family. Herein lies the problem for the older farmers, younger farmers and the national economy. The problem for the economy is that if the land is not farmed to its full potential and maintained through ongoing investment in infrastructure, technology and best practices, then there is a loss to the local and national economy which puts pressure on the achievement of the Harvest targets.

Farming is not only a source of income, it is a career, a lifestyle and a pastime for many farmers. Family succession provided the ideal scenario for many farmers as it allowed them the opportunity to gradually transfer management control to the next generation and wind down from active farming at their own pace, but critically always having the opportunity to be involved at some level, even if only as the wise old head to provide advice and guidance.

There are a number of recommendations made in the report on how to encourage land mobility between older and younger farmers. Government tax incentives which encourage long-term leasing, farm partnerships and land transfer, must be maintained. Farm organisations should take an active role in providing the necessary information to farmers on their options when they are seeking to retire.

Physical ability

Those farmers without a natural successor are uncertain what to do and, as a result, many do little which is not good for them or the industry. Yes, they continue to farm but this can become limited due to age and physical ability, but farming full-time may also become a struggle.

The land is not producing to its full potential and the attainment of the Harvest targets becomes more difficult, while younger and developing farmers are at the same time eager to gain access to land on which to develop their enterprises.

The agricultural industry, as a whole, has a responsibility to ensure they each have the tools and information to realise their dreams.

Dr Pat Bogue runs Broadmore Research