Posted on 17th August 2022
Feuds and disputes in farming are more common than you’d think. This year, in particular, we’ve seen an increase in the number of people asking us to mediate on their behalf.
The rising cost of living, soaring fertiliser prices and fuel costing more are just some of the things contributing to the pressure of everyday life. And then you have the added stress caused by the unique nature of farming businesses – the farm itself is both home and workplace, the family are the workforce, and there is often a strong emotional connection with the land the family owns.
Recently, we’ve been asked to get involved in several cases where the issue of succession has been central. In the UK, we understand the average age of a farmer is around 60 years old. At this stage of life, people are less inclined to take a risk – diversify, for example – and as the UK’s inheritance tax favours people retaining their agricultural and business assets, most farms are owned by people who don’t want to change and want to protect what’s theirs.
So, when the time comes to hand over the reins, things can become fraught.
Do you have a business plan?
Avoiding and resolving disputes and disagreements can be achieved by having a business plan. A good business plan will look at the structure of the business – both its legal status and the role people within the business perform. Paying for professional advice in this area can pay for itself in a few years or less. Moving from a non-incorporated partnership to an incorporated, limited company can sometimes open significant opportunities to save money.
Finding a good accountant who can offer financial advice is also money well spent. We know of some farmers who don’t open the letters their accountants send them, let alone understand the balance sheet. Knowing which areas of the business deliver the best return and your income and expenditure in both the short and long-term are essential and form part of the business plans we help to develop.
A good business plan will also set out how younger generations will assume control of the family business and how older generations will reduce their input. Having this in black and white is an excellent way to avoid arguments.
Sadly, many farming businesses don’t have this in place, and we are seeing more people falling out and asking us to mediate.
Do you have a will?
Another area which can cause tension is after someone has passed away, especially when their will is out of date and doesn’t take into account changes that happened after it was written. So, for example, if, in your will, you plan to leave your farm to your two sons, and one of them decides to leave farming altogether, make sure you update your choice accordingly.
If you divorce and remarry, this will revoke any previous will. Even if you had made a new will leaving your assets to your children, marrying again would see the laws of intestacy favour your spouse over your children.
Is it time for a change?
As we said earlier, older people are less inclined to take a risk or make a radical change. Younger people are not, and we are seeing an increasing number of families fall out over the future direction of their farmland, with sons and daughters wanting to diversify – open farm shops, venture into campsites, glamping and holiday accommodation. Knowing what to do for the best can be tricky and cause frustration and disagreement. As mediators, we have been asked to intervene and help people find the right way through challenging situations.
What is mediation?
Mediators, as recommended by bodies such as the RICS, are there to help people find a way through a disagreement and reach a common and accepted outcome.
Mediation sees all parties coming together over the course of several sessions in which the mediator encourages people to share their views calmly. Mediation is less stressful (and cheaper) than litigation and often a lot shorter process, making it an attractive alternative to going to court.
If you’re facing an issue that is proving difficult to resolve and would like to know more about how our mediation services might be able to help, please call us on 01522 696 496, email email@example.com or fill in our contact form.
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