COMMUNICATION among family members is the key to transitioning the next generation into a family farming business, according to Nuffield Scholar, Andrew Baldock.
“Farm succession planning has traditionally been undertaken by the accountant and family lawyer and has focused on minimising tax through carefully managed asset transfer and retirement planning,” Mr Baldock, a farmer at Kimba on South Australia’s Eyre Peninsula, said.
“While these are extremely important considerations, positive succession planning starts with open and honest communication.”
Mr Baldock used his 2015 Nuffield scholarship to identify the best approaches for building farm enterprises to accommodate growing families in a changing business environment.
Mr Baldock and his brother, Mark, both want to be involved in the family farm and they need to expand the business to support growing families.
“Having both recently been married and having our own children, we face the same scenario our family faced 30 years earlier; how do we want to move forward and what can the business handle?” Mr Baldock said.
“It sounds simple, but most successful family farm businesses allow all existing family members to have input into succession planning, even if they are not a part of the day-to-day operations.”
“Clearly defined business roles and responsibilities are also an essential component of management transfer and building the family farm.”
In order to help solve the problem in their own family enterprise, and to help other farmers in a similar position, Mr Baldock visited successful multi-generational family farms in North America, Brazil, Eastern Europe and Africa.
“My Nuffield Scholarship has been a fantastic experience and there are certainly some common trends associated with succession planning and building farm enterprises with family members.”
“It is a common mistake for farming families to dismiss business capacity to support returning children on the basis that the current business can’t provide a living for everyone involved.
“Farmers are too commonly caught up in the day-to-day running of the farm. Without setting aside time for reflection and future planning, much of the hard work will be in vain.”
“But where there is little capacity to support family members returning to the farm, new methodologies of wealth creation such as collaborative business models, value-adding and contracting can be adopted.”
Mr Baldock said family farm businesses were somewhat unique in that there was usually a diverse, linked framework of family members.
“An important aspect of unity and business success is understanding ourselves and the differing views and mindsets of others. New family members can improve the viability of the enterprise,” he said.
The Baldock business
The Baldock’s are fourth-generation farmers at Kimba. Andrew returned home to the farm in 2010.
Their farming operation includes Jeff and Jenny Baldock, and both sons and their wives, Andrew and Dale, and Mark and Libby.
The Baldock family runs a mixed farming operation comprising 2000 breeding ewes and 6000 hectares of cropping across 7400ha of owned and leased land.
Mr Baldock’s Nuffield scholarship was supported by Grain Growers Ltd.
Source: Nuffield Australia. Applications for 2018 scholarships close on Friday, 16 June.