Effective Ownership Strategies: The Key To Farm Family Business Success Over Time.
Ownership has the potential to make or break a family farm business and farm family, yet has long been the neglected area of family farming in Australia.
A lack of understanding of the effects of ownership, by both farm service providers and the farm family, can result in the following:
1. Turn a viable family farm business into a non-viable family farm business OVERNIGHT, due to a family crisis and particularly, at the time of farm succession.
2. Due to the traditional process of the son/daughter, who receives the farm and paying out siblings their share of inheritance, leaves a family farm business in a liquidity trap, which will significantly impact the future rate of, and uptake/use of recommended applicable agricultural, environmental and business innovations/technology.
All family farm businesses need to grow to keep up with inflation, for providing for increasing cash needs as the farm family grows, both in number and age, and for providing farm family members business opportunities. Traditionally, partnerships and single ownership structures have been used. These structures, whilst cheap to set up, may be costly and difficult to exit and are inflexible for growing the family farm business and intergenerational transfer. Continues …..
Author(s): Tually, Geoffrey G.
Organizations(s): Institute of Land and Food Resources, The University of Melbourne