Dimensions of Intergenerational Farm Business Transfers in Canada, England, the USA and Japan

Abstract

Despite widespread concern that fewer and fewer individuals wish to enter farming as a career intergenerational succession remains an important objective for many farm businesses Indeed it can be argued that intergenerational transfer represents a fundamental aspect of the social sustainability of family farming Previous research has frequently focused on the transfer of physical assets while less attention has been devoted to the transfer of the intangible assets of the farm business such as managerial skills and farm specific knowledge This paper focuses on the succession process after a successor has been identified and analyses patterns of behaviour regarding the delegation of management responsibility Data from the international comparative studies is used to compare the main routes to succession in four countries and identifies how different routes to succession can influence the delegation of managerial responsibility In doing so the paper reflects on the farmer s boy problem and considers the implications for the successful transfer and survivability of the farm business Key words farm family business succession retirement intangible assets managerial skills routes to succession delegation

Farm Succession and Retirement: Some International Comparisons

“…To date over 15,600 farmers have completed the copyrighted FARMTRANSFERS questionnaire. The details of the survey in several countries have been noted in other papers (such as Uchiyama, et al, 2008;Barclay, et al, 2005;Errington, 1998;Errington and Lobley, 2002;Baker, Duffy, and Lamberti, 2001). Data is collected through a postal questionnaire covering basic background information about the farm (e.g., size, tenure, and enterprise structure) and farm family demographics (e.g., age and household composition).…”

“…Iowa has been found to have the slowest succession rate (Barclay, et al, 2005). Uchiyama, et al (2008) found a relationship between the age of the successor and the amount of delegation. Specifically, as successors grow older, more tasks and decisions are delegated.…”

“…Successors will then make decisions such as when to hire more employees, and the recruitment, selection, and supervision of employees. Further up the ladder of many different international contexts (e.g., Uchiyama, et al, 2008). Decides level of inputs used 13 11 6 6 3 9 10 8…”

“…Intergenerational succession represents the renewal of the family farm and can potentially act as a helpful corrective in addressing the apparent increasingly aged population of principal farmers. In contrast to many other professions in contemporary society, farming remains a largely inherited occupation and one in which the transfer of business control and ownership to the next generation is arguably one of the most critical stages in the development of the business (Uchiyama, Lobley, Errington, and Yanagimura, 2008). Moreover, evidence suggests that rates of intergenerational succession are much higher in farming than in other self-employed occupations (Laband and Lentz, 1983).…”

“…In most cases the successor is a child of the manager, and in addition to physical assets, intangible assets (e.g., tacit knowledge) are transferred to the new business principal (Uchiyama, et al, 2008). The highly detailed and locally specific knowledge associated with successful intergenerational transfers can prove vital for effective agricultural and environmental management and can engender a sense of intergenerational accountability (Burton, Mansfield, Schwarz, Brown, and Convery, 2005).…”