BDO agribusiness expert says communication and planning key to maintaining family farm’s legacy

Disputes over the future of the family farm can often cause relationships to disintegrate so it makes sense to consider all your options when succession planning, says BDO expert.

BDO business services partner Jodie Knowlton.

Growing up on a cattle property, I saw first-hand how vital communication is within a family business, particularly when making decisions about the farm’s future and succession.

Different family members can hold assumptions about the farm’s future without effectively discussing this with each other.

When these conversations eventually occur, it’s often time critical, emotive, and possibly ill-informed. This can lead to the disintegration of family relationships, which is all too common.

Communication breakdowns can occur if family members don’t know the range of options available when considering family succession.

The struggle with finding a solution to balance what is fair versus equitable between family members is the assumption they must either divide up the business or pass the entire business to one child. While these solutions can result in a positive outcome in some circumstances, either option can leave a business non-viable or upset some family members as they have missed out on an inheritance.

Communication is key to succession planning on the family farm.

An alternative that may be appropriate to certain families, is to explore the option of keeping the farming business together. This could allow wealth to be kept in the family, equality, fair remuneration for effort, and the ability for the family to leverage the farming assets for future expansion plans, both on and off the farm.

Splitting up the farm or keeping it together may not be the right option for some, as the best solution may be a combination of the two. Factoring in where the business is at - not just financially but also emotionally - is key before thinking about the outcome.

We understand that emotion will always be part of these conversations. Having an independent party assisting in the process can allow families to have the frank conversation required in a safe environment. The process then becomes more entrepreneurial and business focused, and different options can be considered.

By knowing and understanding the available options and making a collective decision through open and clear discussion in a safe environment, families can arrive at the right solution without conflict – and continue the family legacy into the next generation, and beyond.

Jodie Knowlton is a business services partner, specialising in the food & agribusiness sector at BDO in Brisbane.