Farm succession is a hot topic at the Primary Industries NZ Summit in Ōtautahi. Photo: RNZ/Monique Steele
Farm or orchard owners - especially those approaching retirement age - are being urged to prepare for farm succession as a massive transfer of land and wealth looms.
A new report by Rabobank, Changing of the Guard showed more than half of New Zealand's approximately 17,320 farm and orchard owners will reach the pension age of 65 in the next decade.
It found that based off land values, agriculture and horticulture will need to prepare to manage the largest-ever intergenerational transfer of wealth, with farm assets estimated to be worth $150 billion.
Farm succession was a hot topic on day one of the Primary Industries New Zealand Summit in Ōtautahi on Tuesday, which coincided with the release of the report.
Agriculture Minister Todd McClay also spoke to the hundreds of guests, in addition to other industry experts.
Todd Charteris, chief executive of Rabobank. Photo: Neil Mackenzie
Rabobank chief executive Todd Charteris told the summit that economic, environmental and emotional were the drivers behind farm succession, including risks of disconnect between generations and the realities of servicing debt.
"Succession is not a moment in time - it's a process that takes years of planning, conversation and adaptation," Charteris said.
"The traditional model of passing the farm to the next generation is under pressure."
The report surveyed 450 farmers and found only a third had a formal succession plan in place.
A further half of the respondents had not discussed farm succession nor started a plan, whereas 17 percent had discussed it, it found.
It also showed while a third of farmers intended to pass the farm onto their children, 39 percent of them reported having no children seriously interested in farming.
Charteris said the findings highlighted the extent of the succession challenge ahead for the agricultural sector.
"We also found that the financial obstacles aren't getting any smaller to farm ownership and transferring of that," he said.
"But if anything, what we've seen is that may have plateaued over those years."
Charteris said there were new and innovative models emerging that could help families stay connected to their land, like a partial sale, turning ownership to iwi or whanau, or engaging private capital.
Agricultural Minister Todd McClay at the Primary Industries New Zealand Summit in Christchurch. Photo: Neil Mackenzie
The Templeton family of coastal Southland had undertaken its own farm succession plan, with the sons taking up much of the dairy farming business as fifth-generation.
Speaking at a panel discussion in Christchurch, Peter Templeton - also a Nuffield scholar - said farm succession could be a difficult process, but those interested should be radically transparent with family members.
"Succession is a 10 to 15-year process, so start when you've still got some energy left, don't start late," Templeton said.
"If you're on a family farm, talk about the farm outside of the individual people. So, 'how does the farm work for the families?' I think is quite a good way of looking at it."
Skye Macdonald of 16,000 hectare high country sheep farm Middlehurst Station in Marlborough's Awatere Valley shared the farm workload with her three other siblings, as parents Willy and Sue looked to the future.
Macdonald said succession was hard work, but many lessons had been learned along the way.
She said keeping the family and station legacy going was crucial.
"Succession doesn't really ever stop, does it? It just keeps on going down the down the line and if you work hard and be open about it, just keep going with it," she said.
The report also found while a third of farmers intended to pass the farm on to their children, just below 40 percent reported having no children seriously interested in farming.
The Primary Industries New Zealand Summit will continue into Wednesday.
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