Following the Agriculture Bill, we now have an idea of what post-Brexit farming policy and payments might look like. Basic Payment Scheme payments are likely to be phased out between 2021 and 2027 theoretically giving farmers a window in which to review their business and develop sustainable future plans. But what does this actually mean? Farming is a cyclical business by nature and farmers are used to amending their farming practices to cope with outside influences beyond their control. They are used to planning ahead – which crops; which sires; which milk contract; which fields; which rations - to name but a few. But change is about much more than natural cycles. It is about facing the real possibility that we might have to fundamentally change the way we do things. Farmers may have to controls costs (even more than usual) to compensate for the erosion of margins post Brexit. They may need to embrace innovation and technology, investing accordingly to give them a competitive edge. They may need to secure planning consent to facilitate an enterprise change, diversification or exploitation of existing assets. All of this takes time and time is running out rapidly. Make no mistake. Change isn’t coming – change is here.
Succession planning is really just business planning with emotion
The most important thing that farmers can do is ensure that they have planned the succession of the farm. A sustainable and workable succession plan is really just a business plan but it is often complicated by emotion. Future plans are often permanently deferred due to the inextricable link between the business assets and the family home. An engineering firm with a factory on an industrial park is so much less emotive than the farmhouse which has bred and nurtured generations of farmers. Add to that the complication of the expectations of relevant stakeholders or non-farming siblings and the fear of conflict can paralyse the process. Tenant farmers and owner-occupiers face many of the same issues, although tenant farmers on ’86 Act AHA tenancies have the added complication of needing to identify an ‘eligible’ successor. Often one of the prohibitors to making a plan is that the farming enterprise just isn’t big enough to sustain those who want to rely on it and feel they have no viable alternative either because they are dedicated to the farm or have no other formal training. There is no doubt that the single most important thing ~~a farming family can do is talk about the future, however difficult it may be. Last month I was talking to a group of farming accountants about helping families talk about the future and they asked the best time to seek help with the succession conversation. The answer is always yesterday. Families can’t start soon enough in my opinion.
Keep the toffee moving
Whilst there is a great deal in the press about ‘starting the succession conversation’ this is really only the tip of the iceberg. Succession planning involves change and effective change needs careful planning, empathetic management and constant review. A bit like a pan of toffee – you need to keep it moving once it is warm or it solidifies and becomes static. Author Jack Dixon wrote “If you focus on results, you will never change; if you focus on change you will get results.” Fear of change can be terrifying but it can also be liberating and energising and it can transform your business if you approach it right. Whilst there is much to be treasured in the history of farming, we need to be able to forge forward to an uncertain future and change management will be one of the key skills which farming families need to develop. And I reiterate ‘families’. Change doesn’t have to come from the top down and there are many Young Famers ambitious to take the farm forward with fresh eyes and renewed energy. Furthermore, farmers don’t have to become change agents overnight – there is plenty of support for those ready to engage in the process.
Louise Taylor MA, MSc, Dip HRD is Managing Director of Taylor Millbrook Ltd and Partner in Barbers Rural Consultancy LLP. She is an RICS Accredited Mediator and specialises in Succession Planning. Contact Louise on 01630 692500 or firstname.lastname@example.org