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Beyond the Bale : Aug 07 - Sep 07
19 PLANNING BEYOND THE BALE By Melissa Marino Meet the Barklys. Doris and Stan are both in their 60s and looking to retire. Their eldest son Frank, 38, is married with two children and left school in Year 11 to work on the farm. Younger single son Tim, 30, has a Diploma of Education and is trying to buy a house. Daughter Susan, 32, has three children and her electrician husband has just lost his job. The Barklys have been 'meeting' growers for 15 years. They embody the dreams and concerns of hundreds of farming families around the country, even though they do not exist. They are a model family used in farm-succession workshops, the brainchild of Mike Stephens, a farm- management consultant who, with Nigel McGuckian, created them as a tool to help farm families work through the often thorny issues surrounding succession planning. Mr Stephens says farm succession is crucial for the sur vival of the farm business through successive generations, but too many families are reluctant to raise the issue until time has almost run out. This is where the Barklys come in. "They are a way to discuss issues without discussing private information," he says. At the workshops, the Barkly family members are played by workshop delegates in role-play exercises that allow personal concerns to be raised -- at arm's length. The participants are given common information about the family and private details motivating their own Barkly character. They are then given a scenario, such as the future of the family farm, and are set loose to improvise. The issues that emerge are then analysed and discussed by the group. "What it enables people to do is hang issues they want to discuss on the Barkly family," Mr Stephens says. "They don't have to stand up and say, 'I've got three kids and they're fighting and I don't know what to do'. They can stand up and say 'Now, those three Barkly kids ... what are some of the things we can do to stop them fighting?'. " The AWI-funded, NSW-based Wool4Wealth program, which addresses the key issues in running a profitable wool business, identified succession planning as one of the problems with retaining and encouraging young woolgrowers. As a result, organisers planned a series of workshops -- the first of which was held recently in Orange. Mr Stephens says the Barklys are just one part of the sessions, which provide an overview presentation and specific advice from specialists such as lawyers or accountants. The workshops, he says, are about giving people the tools to get a succession plan under way. To facilitate a successful handover, the needs and expectations of all family members need to be ferreted out, he says, starting with the major stakeholders -- the people whose names are on the title. Then it is about gradually handing over the responsibilities for doing the work, the management and then perhaps eventual ownership. "But these things have to be planned over a long period of time so that succession is not something that suddenly happens when the old man's 65," he says. "When somebody asks 'When is the right time to start on succession?', the answer is 'Now'. " Solicitor and succession specialist Bill Thompson has seen real-life horror stories played out because people have not been prepared or discussed the issues. "If you're a 45- Finding success in succession Who gets what is a crucial issue for the survival of family farm businesses, but lack of discussion and planning often leads to horror stories GUIDE TO HELP WITH THE HARD DECISIONS "Unless the younger generation have won a lottery or have their own wealth, they'll never be able to pay market value. So it's about coming up with a plan" -- BILL THOMPSON, SOLICITOR SEVEN PRINCIPLES OF A SUCCESSION PLAN ú to work out what the exiting generation wants to do -- where they'll live and what they will do in retirement -- if succession is an option; ú to identify the needs and aspirations of each family member in each generation; ú to build, maintain and, if necessary, repair relationships between family members; ú to manage expectations amongst family members; ú to look at transferring management and control of the farm over time; ú to sort out how to transfer ownership of the farm; and ú what deal there should be for the incoming generation and what provision to make for the non- farming children. year-old with a young family, and you've been working on the farm earning $30,000 a year and the farm is sold and split between you and your non-farming siblings, what do you do?" he asks. "Unless the younger generation have won a lottery or have their own wealth, they'll never be able to pay market value. So it's about coming up with a plan that gives mum and dad security in retirement and the younger generation an achievable goal and recognises their contribution." Mr Thompson, who has also been invited to address the workshops, says succession plans can include practical measures to address such issues, including clauses to pay children in equity for years worked on-farm. The legal process need not be daunting. Mr Thompson suggests contacting known or trusted local lawyers and accountants in the first instance while seeking feedback from the family on their expectations. "The biggest mistakes people make are not talking, planning or investigating different options," he says. "I work from the bottom up and say why not consult people? People need to know where they're heading." Mr Stephens says the components of the farm -- the land, livestock, machinery and management -- need to be separated, individual wishes acknowledged and a common purpose understood before appropriate legal and business structures can be applied to transfer ownership. ú More information: www.wool4wealth.com; Mike Stephens, email@example.com The number of farms undergoing a succession- planning process is expected to peak in the next five years, and to help families move through this period, the Grains Research and Development Corporation (GRDC), with the support of AWI and other major agricultural organisations, has put together a Succession Planning Guide. Launched at July's Victorian Agribusiness Forum Summit at Ballarat, the guide was produced because farm succession planning is becoming a big issue for Australian agriculture. Although the average age of Australian farmers is 54, in broadacre farming 25 per cent of farm owner/managers are over the age of 65. Across all industry sectors only five per cent of owner/managers are over 65. Research also indicates that of the 15,000 primary producers in South Australia, 27 per cent will be retired or semi-retired in the next five years, with 47 per cent of them not having planned for succession The Succession Planning Guide contains case studies based on the experiences of 15 farm families.The guide covers 'front-end' options when people are entering a business, either through invitation or marriage, and 'back-end' options when they are leaving. More information: For a copy of the guide contact the AWI Helpline, 1800 070 099 PHOTO: KELLIE PENFOLD
Aug 07 - Sep 07 Supplement
Jun 07 - Jul 07 Supplement