Who will be farming this farm in 5 years time?
If you as a farm family or landowner cannot answer this question it is time to explore and evaluate your options.
Thankfully there are options and support services to help understand and evaluate all options. The Land Mobility Service supported by Food Processors and The Department of Agriculture are an independent confidential expert service who are there to help.
The facts are that 26% of farmers are over the age of 65 and 48% of full time farmers have no identified farmer successor. On the other hand farms are an important family asset capable of generating an income. Any discussion and plan must take into consideration;
- Protection and Maintenance of that asset
- Income security for older family members
- Protection of BPS/EU entitlements and of course tax.
- The farm business must be capable of generating a return for all parties involved. For these reasons accurate relevant information is key so that informed decisions can be made.
For those thinking about change or for whom there is no plan options do exist.
- There may be a solution within the family or extended family, family partnerships provide an excellent mechanism for young trained farmers and the older generation to work together without the need to transfer assets. The partnership can be tax efficient and can qualify for young farmer supports.
- Leasing is another option whether you are looking at stepping back or to grow the business. Long leases provide security and certainty to all parties. They are very tax efficient.
- Share Farming is another option that can suit people who may want to stay more involved.
Some Questions for Landowners to ponder
1. Am I better to do nothing? Doing nothing is not a plan, you need to look at options with a view to a long-term strategy. Allowing a farm slip back and get run down is usually regretted in the long term.
2. Should I Lease? Long Term leasing is a simple tax efficient arrangement, provided you identify the right person your farm and income is safeguarded. One concern with leasing is that the owner effectively retires and may cease to be an active farmer. For many landowners it is a trade-off between the tax relief and active farmer status.
3. What about Share Farming? Share Farming is a definite option, key to share farming is that the owner continues to take a risk and remains an active farmer. The owner receives a share, or percentage, or payment related to output/performance rather than a fixed rent. In reality over time the actual return to the land owner and conversely the cost to the farmer differs little whether the arrangement is a shared one or a lease.
4. What about following the Schemes? Subsidy or Scheme Farming is again a definite option however experience and expectation is that it is a route to diminishing returns unless done with a Young Trained Farmer or as part of Generational Renewal.
To Lease or Share?
There is now a greater acceptance and appreciation for long term mutually beneficial collaborative arrangements between farmers and landowners. People are seeing first hand where they are working to the benefit of all parties.
There has been an obvious shift away from short term and one-sided arrangements, the ethos of “Get the best price possible and to hell with the consequences” is thankfully disappearing. Instead the focus is “The Three P’s : Person, Price, Period”.
Government support through Tax Relief for Long Term Leasing, Department of Agriculture recognition of Partnerships and Share Farming, Teagasc education and independent facilitation through The Land Mobility Service have all helped to deliver this favourable shift.
We are now moving towards the end of the present round of CAP with 2022 the last year of the current BPS. From 2023 farm supports and Entitlements will continue, however value, rules and criteria in the claiming of same will change especially as regards the Greening component of historical BPS. Talk and headlines regarding these rules coupled with active farmer comments, clawbacks, national reserve etc. etc. is confusing and are best ignored until the rules are decided and documented.
The Land Mobility Service is both independent and expert, options provided are without obligation, and engagement is confidential. The Service has no vested interest other than to help. It is a subsidised service and at the very least you will be armed with relevant factual information.
The service is about providing options for land owners and opportunities for young farmers.
The Land Mobility Service firstname.lastname@example.org can help you
- Explore your options and make informed choices
- With expert independent advice
- Independent facilitation
- Documenting any agreement
Finding your Land Mobility Opportunity
A key element of the Land Mobility Service is matching people to opportunities. To facilitate this and help you find your ideal match we have linked up with the Irish Farmers Journal 01 4199555 where with confidentiality assured, you can have your interest passed onto identified opportunities or you can determine without obligation what interest there may be in your opportunity.
This is a perfect discreet way to test the water. Once you have identified someone or an opportunity that might work for you, we at the Land Mobility Service can help you explore the options and formulate a workable arrangement. Simply call Austin at 086 2541425. The Service is an independent expert facilitator that will help put an arrangement in place that works for everyone.
Step 1 Test the water or find out more Call 01 4199555
Step 2 Putting an arrangement in place Call 086 2541425