DON’T BET THE FARM – CANADIAN FARMERS FACE UNCERTAIN FUTURE
1/3 of poll respondents expect new ownership soon, but succession plans not in place
From RBC Agriculture News
Business succession is an inevitable step for entrepreneurs and while a critical part of a business plan, few actually have a succession plan on paper. This is evident in Canada’s farming community as a recent poll of Canadian farmers shows that one-third of respondents indicated their farms are likely to change hands within the next few years, with the majority of those (62 per cent) expected to transfer to family members or partners, but only 30 per cent of these farm owners are doing any formal succession planning to ensure a smooth transition to the next generation.
The 2015 Canadian Agricultural Outlook Survey noted that, among the uncertainties farmers face each year, upcoming changes in the ownership structure of their business is a topic relatively few farmers are prepared to address with a formal succession plan. This survey was conducted by Ipsos Reid on behalf of the Western Producer; RBC Agriculture was a key partner in developing the survey.
“We know that farmers are often so busy with their day-to-day work, it can be difficult to even think about the day when they won’t be farming,” said Gwen Paddock, national director, Agriculture, RBC. “But we also know that the future success of their farms depends upon having a well thought-out succession plan in place. Working with a qualified advisor, accountant and lawyer to formalize a succession plan can help ensure a seamless transition to the next generation of farmers and provide the means for today’s farmers to enjoy their retirement.”
Paddock provided the following tips to help farmers prepare their succession plan:
- Timing is all-important: If possible, begin your planning process at least five years in advance of when you think you might sell your farm – whether you’re thinking of a partial or full sale. This will help you to better handle any bumps along the way.
- Tap into available expertise: Financial advisors and accountants have expertise that can be invaluable; bring them in as you start your planning process. You can also find useful information online, for example through the Agri-Food Management Institute.
- Share your plan: Involve key family members or partners – especially those you are considering passing the farm to – and do so early in your planning process.
About the 2015 Canadian Agricultural Outlook Survey
The 2015 Ag Outlook Survey provides key information about Canadian agricultural producer opinions towards their businesses, a short-term review of their major investments and some projections about what they are considering in the near future. The survey of 455 farmers, all subscribers to Western Producer and Glacier FarmMedia publications, the largest agricultural publisher in the country, was conducted between December 3 – December 22, 2014. RBC Agriculture was a key partner in the development of the survey. Sixty-seven per cent grain and oilseeds producers, 81 per cent from Alberta, Saskatchewan, and Manitoba. Sales of $10,000 to over $2 million. Farms with sales of $250,000 or more made up about two-thirds of the survey.
About Ipsos Reid
Ipsos is Canada's market intelligence leader and the country’s leading provider of public opinion research. With operations in eight cities, Ipsos employs more than 600 research professionals and support staff in Canada. The company has the biggest network of telephone call centres in Canada, as well as the largest pre-recruited household and on-line panels. Ipsos’ Canadian marketing research and public affairs practices are staffed with seasoned research consultants with extensive industry-specific backgrounds, offering the premier suite of research vehicles in Canada—all of which provide clients with actionable and relevant information. Ipsos is a leading global survey-based market research group. To learn more, visit www.ipsos.ca
About RBC Agriculture
RBC has provided financial services, investment products and expert advice to Canadian agricultural producers for more than 135 years. RBC's agriculture clients reflect all sizes of operations from hobby farms to commercial scale farms and ranches and Agribusinesses. Whether you are interested in expansion, transition or succession, one of our agricultural banking professionals across the country can be of assistance. For more information, please visit www.rbcroyalbank.com/commercial/agriculture/.