Research carried out by Irish Country Living shows that 70% of farming families surveyed have no formal succession plan in place for their farms.
The study, analysed by ifac surveyed readers across all adult age groups involved in dairy (38%), suckler (21%), cattle finishers (17%), sheep (8%) and tillage (3%) with the remaining respondents comprising other farming enterprises.
With an equal split between male and female respondents, the survey shows 61% of men are farming in their own right, more than double the number of women farming in their own right, at 28%.
When asked if they have a succession plan in place, written down and agreed with all, 30% of respondents said yes. A further 42% stated that they hadn’t anything written down, but had discussed their intentions. However, 28% said they did not have a succession plan.
Over half (53%) of the respondents said they had identified a successor for the core farm – overwhelmingly identified as a male family member (72%) with less than a quarter (22%) choosing a female family member.
Irish Country Living research
Speaking about the results, Ciara Leahy, editor of Irish Country Living says, “Succession is a topic that comes up every year at our Women & Agriculture conference, which takes place on 23 October. We carried out this research to reflect the views of some of our readers in terms of their plan for the farm, and their future financial security.
“The equal split of male and female participants garnered very interesting results in terms of attitudes to succession and pension planning.
“Reflecting on the last decade, visibility of women in farming has improved, according to 88% of male participants and 78% of female participants.
“We would like to think that Irish Country Living has had a role to play in this through our editorial content which reflects the role of women across all farming sectors and with our Women & Agriculture conference, which celebrates farming women each year.
“However, looking forward, it is still males who will be running farm enterprises, with 72% of respondents identifying their succesor as a male family member.”
Given land ownership continues to be dominated by men, 76% of whom own land in their sole name, the survey asked respondents if they felt there was a reluctance to hand over farms to daughters/females.
A quarter of male respondents felt there was no reluctance, yet only 15% of female respondents felt the same, with 50% of all respondents believing there was a reluctance ranging from ‘somewhat’ to ‘extreme’.
The main reason for this reluctance was recorded at 56% for the ‘traditional assumption that the son will farm’, while 44% believed it was linked to ‘concerns around the continuation of the family name’.
More women (61%) than men (46%) believed the traditional assumption regarding sons farming were a block to handing on a farm to a female relative, and women also tipped the balance in their views on the continuation of the family name, (48%) compared to 36% of male respondents.
Speaking about this mindset, Philip O’Connor, head of farm support in ifac says fears surrounding what will happen to a farm in the event of a marital separation or divorce have heightened these concerns, in some cases.
“It is a complete myth that a farmer goes up the aisle with a full farm and comes back down with half but it’s a myth that continues to linger,” he says.
“I’ve dealt with many cases involving divorce and the key is not to let it get to the courts, and resolve things amicably through mediation.
“Regardless, a farm is not carved down the middle when a couple split up and that should never be used as a reason not to transfer land.”
Commenting on this, Ciara Leahy says: “It is clear that traditional mindsets still prevail in terms of land ownership and succession plans.
“It can take a long time for mindsets to shift and that is why, in Irish Country Living, it is important to continue to reflect the voices of women who are actively farming, to celebrate their successes, to change the dial in terms of attitudes to females farming.
“The more we see women succeed and lead in this area, the more that we inspire younger females – and their parents – about their own potential.”
However, access to land is a significant issue facing female farmers. The survey asked respondents if they felt there is a reluctance of male farmers to have their spouse jointly own the land.
Almost two thirds of those who responded to the survey, (63%) felt there was a reluctance, with this figure rising to 73% for female respondents. Just over half of the male respondents (53%) agreed there was a reluctance to add their spouse to the land title, with 73% of those aged 35 to 44 believing this to be true.
Philip says there can be tax implications surrounding joint ownership and some professionals will advise spouses not be added to the title.
“There is a reluctance among male farmers to add their spouses to the land as you have to be on it 10 years to qualify for the Retirement Relief and if this is only a consideration for an elderly couple, then it doesn’t make sense from a tax perspective,” he says.
“The ideal situation is to put the spouse’s name on at marriage and get that 10 years out of the way at the start. This way, you have a double entitlement to the lease land exemption which makes perfect financial sense.
“There is a lot more impetus surrounding the succession conversation in recent years, which can only be a good thing. The tax system around inheritance is favourable to land as there are a lot of reliefs out there for the transfer of land to the next generation,” Philip says.
The Department of Agriculture is allocationg more money to succession and the need to get people planning, but communication within families and with legal and tax professionals is key.
“We need to get more people talking about what they want and need from the family farm going forward.”
Respondents were also asked to comment on what role the Government could play to support female land ownership. Overwhelmingly, respondents felt more supports were needed across the board to facilitate good succession plans, for both male and female respondents – and that neither gender should be discriminated against. However, the need for better childcare was a recurring theme with one female respondent stating: “[It is the] age-old question of childcare, traditionally seen as a woman’s role... until this is properly supported by the State, women won’t be in a position to advance as they might, regarding responsibility of farming and farm ownership.”
Pension plans
Finally, the survey asked the respondents about financial planning for their later years.
A worrying statistic is the lack of qualification for the non-contributory pension, with 38% of respondents not receiving one, or due to receive one in the future. Analysing these figures in more detail, it is women who are more financially exposed with 43% of women not due to qualify while 33% of males do not receive it, or expect to receive it in the future.
The figures for private pensions are also low, with 40% of respondents saying they do not have one in place. The figures on this are more consistent across the gender profiles with 44% of women saying they do not have a private pension set up and 37% of men.
“Pensions took a hit in the last recession which has made people reluctant to take them out,” adds Philip.
“But a private pension can take the pressure off for farmers, particularly those on less viable farms which wouldn’t need to provide income for multiple generations. It’s a buffer and a good idea for people to consider in the overall succession scheme.”
The Irish Country Living survey found that 35% of respondents had no will in place, with this figure slightly higher among men (37%) than women (33%).
Concluding on the research overall, Ciara Leahy says, “The results of this survey will lead to some interesting discussion at our Women & Agriculture conference. Succession and planning for the future of the farm can be an emotive subject, but it is one that is extremely important. Often it is the woman in the family who is driving the conversation forward but it is one which all family members need to be involved in, at different points.
“We know that it is a conversation that often starts at the kitchen table, but then has to move beyond that in terms of getting the proper financial and legal advice to make sure a good, solid plan is in place, and communicated to all relevant parties.
“This is an area we will continue to cover in Irish Country Living, to help readers faciliate the best succession plan for their family, and their farm.”