A Lincoln University study says multiple farm ownership is complicating succession planning, especially for dairy farmers
More than 40% of farmers own more than one farm, complicating their succession planning issues, a Lincoln University survey has found.
The survey of 800 farmers was carried out by Lincoln's senior lecturer in farm management Kevin Old, and senior research fellow Peter Nuthall, to gauge the current state of succession planning on New Zealand farms.
The researchers were surprised to find that although owning one farm was still the norm, with 58% of respondents reporting single farm ownership, the other 42% reported owning multiple farms, with some of them owning up to eight.
Multiple farm ownership was particularly common among dairy farmers, the survey found.
It also found differences in the way farmers intended to divide their assets among their children.
In many cases, farmers' children did not want to become farmers themselves but still expected a share of the family assets in due course , the researchers found.
Just under half (47%) of the respondents said they would divide their assets equally among their heirs, even if they had to sell the family farm to achieve that.
But the majority, (53%), said the distribution of assets would not be equal, with some farmers noting they would favour a particular heir if he or she was chosen to take over the farm.
However that was often done with an expectation that the chosen heir who took over the farm would compensate the other children in some way.
Some farmers reported they had off-farm investments which they intended to leave to those children not following in their farming footsteps.
Fifty eight per cent of the farmers surveyed said they intended to pass most of their assets to the next generation, but 27% said they intended to pass on less than half of their assets.
The survey also found that farmers appeared relatively reluctant to prepare a succession plan, with only 30% reporting that their net assets had been assigned to their heirs.
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