Succession planning a challenge for Australian farmers

While many businesses and farms rightly place a high priority on making sure they have comprehensive insurance cover in place, there are many more contingencies to plan for.

One of the most important is to plan for what will happen when you, the owner, steps down from your position at the head of your business.

Just like business insurance and farm cover, though the details may differ, each business and farm will likely have similar needs when it comes to a succession plan.

However, recent figures from the Australian Bureau of Statistics (ABS) indicate that planning for succession could be more critical for rural producers than other businesses.

The ABS reported in January that the median age of Australian farmers in 2011 was 53 years, compared with 40 years for people in other occupations.

What's more, in that year, 23 per cent of farmers were aged 65 years or older. For other occupations this age group formed just three per cent of the labour force.

The ABS suggested that the higher median age was due to farmers being more likely to continue working beyond the normal retirement age, but also could reflect the decline in attractiveness of rural professions for younger generations.

That means that for many of Australia's 135,000 farm businesses (2010-11 Agricultural Census data), succession strategies may be high on the agenda.

AUSVEG spokesperson Hugh Gurney said that planning for succession was a challenge facing many rural producers.

"Succession planning has been identified as a major area of concern in the industry, with recent ABS figures detailing a fall of 11 per cent in farmer numbers over the five years from 2006-11," said Mr Gurney in an article published February 20.

Elders Insurance specialises in serving the needs of Australia's rural producers. Our agents live in the rural communities they serve and bring a personal touch to providing your farm with the financial protection it needs.