Nuffield Australia 2015 Scholar
How to best bring family members into the fold
Transitioning the next generation into a farming business is a great idea in theory, but what are the practical realities of bringing more family members into the fold and how can families overcome these challenges?
2015 Nuffield Scholar Andrew Baldock used his scholarship to identify the best approaches for building farm enterprises to accommodate growing families in a changing business environment.
“Farm succession planning has traditionally been undertaken by the accountant and family lawyer and has focused on minimising tax through carefully managed asset transfer and retirement planning,” Mr Baldock said.
“While these are extremely important considerations, positive succession planning starts with open and honest communication. It sounds simple, but most successful family farm businesses allow all existing family members to have input into succession planning, even if they are not a part of the day-to-day operations. Clearly defined business roles and responsibilities are also an essential component of management transfer and building the family farm.”
Mr Baldock is a fourth generation farmer from Kimba, on South Australia’s Eyre Peninsula, who returned home in 2010. Farming with his wife Dale, parents Jeff and Jenny and brother Mark with his wife Libby, the Baldock family runs a mixed cropping and livestock operation comprising of 2,000 breeding ewes and 6,000 hectares of cropping across 7,400 hectares of owned and leased land.
Andrew says with multiple siblings wanting to be involved in the family farm, they have a need to expand the business to support growing families.
“Having both recently been married and having our own children, Mark and I face the same scenario our family faced 30 years earlier; how do we want to move forward and what can the business handle?”
To help answer this question and help other farmers in a similar position, Mr Baldock visited successful multi-generational family farms in North America, Brazil, Eastern Europe and Africa, thanks to a Nuffield Scholarship sponsored by Grain Growers.
“My Nuffield Scholarship has been a fantastic experience and there are certainly some common trends associated with succession planning and building farm enterprises with family members. It is a common mistake for farming families to dismiss business capacity to support returning children on the basis that the current business can’t provide a living for everyone involved. But where there is little capacity to support family members returning to the farm, new methodologies of wealth creation such as collaborative business models, value-adding and contracting can be adopted.”
Mr Baldock said family farm businesses are somewhat unique in that there is usually a diverse framework of family members linked within it.
“An important aspect of unity and business success is understanding ourselves and the differing views and mindsets of others. New family members can improve the viability of the enterprise. Farmers are too commonly caught up in the day-to-day running of the farm. Without setting aside time for reflection and future planning, much of the hard work will be in vain.”