News Release

Farm Leaders stress need for succession planning

Canadian farmers nearing retirement will transfer billions of dollars in assets in the next decade, but there's a lack of coordinated services to help them plan and carry out the transition.

This concerns many people in the agricultural industry, who are helping farmers prepare for a smooth transfer of assets when they retire. A coalition of agribusinesses and farm organizations has initiated a study of family farm succession issues to determine the need for a coordinated national centre.

As part of the study, researchers at the University of Guelph are conducting surveys with 50 farm families, 50 farm organizations and 50 service providers across Canada to develop a clear picture of the barriers, issues, needs and available services for succession planning.

"We are gathering information to scope out the issues and identify common areas where there is a need for further support and training to make the whole problem less onerous," says John FitzGibbon, director of the U of G's Faculty School Environmental Planning and Rural Development, who is conducting the surveys with the assistance of graduate students. The survey findings will be reported to coalition members in the fall.

Studies of farm succession in Canadian agriculture have found:

-- 120,000 farmers will reach retirement age in the next decade;

-- $50 billion of farm capital will be transferred, at an average of $402,000 per farm;

-- farms are five times as likely to be transferred than other family businesses;

-- nearly 50 per cent of farm operators in Ontario are over 55 years of age.

"The social and economic impact of passing on farm assets to the next generation of farmers is enormous," said Bob Aumell, Past President, Ontario Institute of Agrologists. "It has an impact not only on the family, but also on the community and the marketplace."

If studies identify the need for new services to deal with succession issues, the coalition will work towards implementing a national centre.

The creation of a national centre was the key recommendation of a summit on succession planning held recently at the University of Guelph. At the summit, participants from the legal, accounting, insurance, government, education, counseling and financial sectors discussed their experiences and initiatives.

Among their findings:

-- Succession planning requires a team approach and must be viewed as a process, not a single act.

-- Soft issues such as interpersonal dynamics and lifestyle differences between generations is the biggest barrier to successful farm succession planning.

-- A lack of planning — 90 per cent of family businesses have no documented succession plan --is a major drawback in the successful transferring of assets.

"There is plenty of expertise available but coordinating this in a useful and economical fashion is a challenge," said Ken Kelly, vice-president of the Ontario Federation of Agriculture, and a member of the coalition.

The proposed centre would offer accredited advisors and service providers, coordinated education efforts, specialized counseling and follow up assistance for Canadian farm operators.

Coalition members include University of Guelph, Ontario Federation of Agriculture, Junior Farmers, Christian Farmer Federation of Ontario, the Ontario Ministry of Agriculture, Food and Rural Affairs, Ontario Institute of Agrologists, and Agricorp.

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Contact: Bob Aumell, Past President, Ontario Institute of Agrologists, (519) 763-4261

John FitzGibbon: (519) 821-8592, Ext. 6784

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