An Examination of Farmer Perceptions of the Economics of Farm Succession and Inheritance

The rising average age of farmers and low level of young farmer entry is viewed as problematic on a global scale. Intergenerational farm transfer in particular is increasingly viewed as fundamental to the sustainability and... [ view full abstract ]

The rising average age of farmers and low level of young farmer entry is viewed as problematic on a global scale. Intergenerational farm transfer in particular is increasingly viewed as fundamental to the sustainability and development of global agriculture. In the majority of EU countries, the average age of farmers is increasing, while the number of farmers under 40 years of age is decreasing. There is growing concern that this demo-graphic trend may have negative impacts on the agricultural industry because it is younger and not older farmers who are associated with more efficient and effective production practices. Using the example of Ireland, this research investigates the complex phenomenon of farm succession and inheritance. The specific focus for the project is on the economic and financial aspects of the farm transfer process, a realm in which a significant portion of agricultural policy is rooted. The research is grounded in the notion that farmers in many cases perceive farm transfer as a risk to their future in economic terms, with Ireland lacking a farm retirement scheme meaning farmers may not have income security should they chose to exit farming. Problem Centred Interviews were used to collect data from farmers in different regions of Ireland, additionally different farm systems were chosen to ensure farmers with varying levels of income were included in the sample. In this instance dairy and beef producers were chosen as these are the two most dominant farm systems in Ireland, with dairy farmers generally receiving higher incomes and beef producers attaining significantly lower returns from their agricultural activities. Preliminary findings indicate that farmers in lower income systems are averse to farm transfer due to the lack of financial support they would receive once they have handed their farm assets on to the next generation. Several interviewees involved in beef production also raised concerns that their son/daughter would not be able to live solely on farm income. These findings illustrate a need for generational renewal policy to not only assist those entering the farming sector, but to encourage those exiting also.