Many farmers would love to stay on their farm as long as they live. As a profession, agriculture has more “older workers” than any other profession or industry, with the average age of farmers approaching 60. It is obvious that farmers love what they do, however, there is more than one reason why farmers keep working beyond the normal age of retirement. If they don’t have kids they can hand their farm on to, they don’t see a way out without selling up.
So, why is it a serious problem that many farmers don’t have a way to pass on their legacy? Here are 5 reasons why:
1. The pool of next generation of farmers is shrinking
Australian farms have traditionally been passed on to the next generation within a family. With farming families supplying most of the farm labour, family farms have been the cornerstone of agriculture in Australia. However, the number of farming families decreased by 31% between 1986 and 20063, mainly due to the migration of youth from regional areas to major cities. This has usually been the result of better employment and education prospects in major cities and has meant that many farmers have been left with the hard truth… They have no one to hand their farm on to.
2. There are serious concerns for the health and wellbeing of Australian farmers
Farming ranks as one of the most hazardous industries. Farmers can be challenged with the physical demands of farming as they age, impacting their health and well-being. Though many farmers are inclined to keep pushing if they don’t have the help that they need, at times, farmers are also forced to make premature decisions to give up their farms. This may mean selling their farm to a neighbour or a corporate organisation which can often lead to extremely serious ramifications for their mental health, not to mention the loss of their life long legacy.
3. If the next generation can’t afford it, they aren’t going to show up
The new generation will require around $400B in investment to take over the farms that are available. Without investment strategies or the start up capital to get started, the next generation of farmers will not show up.
4. The sector is growing with a demand that is not being met
Australian production is set to increase from $60B to $100B by 2030 and 50% of Australian farmers are expected to retire within the next 15 years. There has also been a huge reduction in the skill-levels of agricultural employees, with approximately 59% of low-skilled and 45% high-skilled agricultural employees leaving the ag sector between 2011 and 2016 alone4. What this means is that we are going to be facing a serious deficit of skilled farmers if we don’t take action now.
5. Farmers don’t know that they have the option to stay and age on-farm
Most farmers don't realise they can age on-farm, even those who don't have kids to hand the farm on to or whose kids don't want to take the farm on. Ageing on-farm takes time and resources and requires the consultation of many people.This can feel truly overwhelming for farmers wanting to retire.
So what is the solution?
Cultivate Farms have been working for years to find farm ownership solutions for the next generation of farmers and believes the solution is supporting farmers to age on-farm by sharing ownership with the best next-generation farmers. Our approach is to find next-gen farmers, educate them and connect them with retiring farmers. We also bring investors to the table to enable the co-ownership of farms.
We have already met hundreds of retiring farmers who are eager to see their farm transition to a young couple who love the farm and farming as much as they do. Based on our long-term work and research, we estimate that there are thousands more farmers who would be eager to understand how they can age on-farm but haven’t discovered how to do it, yet. This is why we are calling out to you to spread the word. We are here to make this happen.
Cultivate Farms will work alongside farmers looking to step back but stay on their farm to identify the steps and options that give them the "choice" and 'know-how' to age on-farm. If you are one such farmer or know someone, you can start by referring them to check out our Ageing-on-farm guide. This is a worldwide premier guide on how to get started on the process. We also have a program, but we believe it’s crucial to supply the information first so that retiring farmers understand that they are in good hands and that we can work together as a team to make the process smooth and comfortable.
Over the next decade, the potential for the sector to grow into a $100 billion industry will depend on its ability to work collaboratively, grow sustainably, understand the needs of future customers, unlock the value of new technologies across the entire supply chain, and attract people and capital.
By Meg Wright, Marketing & Community Manager at Cultivate Farms
References:
1Wu W, Dawson D, Fleming-Muñoz D, Schleiger E and Horton J. 2019. The future of Australia’s agricultural workforce. CSIRO Data61: Canberra, Australia.
2 ABARES 2022, Snapshot of Australian Agriculture 2022, ABARES Insights, Canberra. DOI: https://doi.org/10.25814/s0hc-2d58. CC BY 4.0. ISSN: 2209-9123
3 Binks, B, Stenekes, N, Kruger, H & Kancans, R 2018, Snapshot of Australia’s Agricultural Workforce, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra. CC BY 4.0. https://doi.org/10.25814/5c09cefb3fec5
4 Binks, B, Stenekes, N, Kruger, H & Kancans, R 2018, Snapshot of Australia’s Agricultural Workforce, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra. CC BY 4.0. https://doi.org/10.25814/5c09cefb3fec5