Farming: Planning for the future of your family farm
For most farming families, succession is not a single event but a journey – one that can span years, emotions, legalities, financial concerns and social dimensions.
By transferring skills, roles and ownership along the way, farm owners can create a business that’s robust, sustainable and valuable. But, where to start?
The ultimate exit, one which sees the farmer sell or hand over to the next generation, isn’t easy. Between the daily grind of farm work and the emotions tied to the land, it’s no surprise it gets pushed down the list.
But, ignoring it doesn’t make it go away.
In fact, it makes it worse; family rows, financial headaches, and uncertainty about the farm’s future are all risks when there’s no plan.
The good news? More families are starting to tackle this, and it’s making a difference.
How does succession affect the modern farmer?
The message is clear: some families are getting ahead of the game, but for many, succession planning is still a big unknown.
So, what’s stopping people from being prepared?
For most farming families, succession is not a single event but a journey – one that can span years, emotions, legalities, financial concerns and social dimensions, each of which can complicate or delay the succession process.
It’s important, when succession planning, to remember that every family is different. That said, the same issues come up time and again:
For one in five farmers, the farm just doesn’t generate enough income to support two generations at the same time.
Therefore, it is hugely important to have a pension to deal with this issue.
The average Irish farm is 34 hectares, and the average dairy farm has about 93 cows. That might support one family, but stretching it to cover two - or even three - generations is undeniably tough.
Farming is hard work. Long hours, physical labour, and an unpredictable income. As a result, it’s not surprising that one in four farmers say their children aren’t interested in taking over.
That figure is a sharp increase from the previous year, and growing: today, it’s the number one challenge for succession planning, an unprecedented act since we started the Irish Farm Report, seven years ago. Adding to that is the comment that one in eight farmers have: insisting that the next generation has no interest in the business at all, or the lifestyle that comes with it.
No one wants to open a can of worms at the kitchen table, but avoiding the conversation won’t make things easier. About one in 14 farmers say succession is too sensitive a topic to bring up. That number has improved slightly, but it still shows how difficult these discussions can be.
About one in 12 farmers admit they don’t know how to plan for succession. This highlights the need for clear, practical advice to guide families through the process.
Over one in five families say they can’t decide yet because their children are too young. While this makes sense for some, it shows the importance of starting early so there’s a plan in place when the time comes.
It's not all bad news, however. There are some positive trends worth noting.
More farms are picking successors - nearly one in three farms now have a farming successor, a small but encouraging step forward.
Fewer farmers see finances as a roadblock - the number citing financial viability as a challenge has dropped from one in four to one in five over the last two years.
More families are tackling tough conversations - the number avoiding the topic is falling, showing that awareness and action are improving.
Half of farmers in partnerships have a clearly defined successor - which clearly shows this is a model that helps succession.
Everyone wants to avoid a row, but it’s better to talk things out than leave them hanging. Do your research, sit down with your family and have an honest conversation.
Is the next generation interested in farming? What do they want, and what do you want?
These conversations might take time, so don’t rush them – but putting them off helps nobody.
Can the farm support two families? If not, what needs to change? A trusted accountant - like your local ifac team - can help you make sense of the finances and figure out what’s realistic.
Not every farm can go straight to the next generation, but that doesn’t mean it has no future. Leasing land, exploring shared farming, diversifying into renewable energy or agritourism could help keep the farm running.
Across the U.S. today, around 55% of all cropland is leased out from landowners who are, in many cases, not resident in the near vicinity of the farm.
Tax reliefs like Agricultural Relief and Retirement Relief can make succession easier and cheaper.
But you need a plan to take advantage of them. Ifac's tax advisors can guide you through what applies to your situation.
Sorting out succession takes time, so the sooner you start, the better. Getting ahead of it gives you time to work through family discussions without pressure; make the most of tax reliefs and avoid unnecessary costs; prepare the next generation to take over when the time comes.
Talking about succession might be awkward, but it’s one of the most important things you’ll do for your farm.
Without a plan, you’re leaving the future of the farm – and all your hard work – up in the air.
