Succession planning in farming encouraged
28 July 2021 | Agriculture
Succession planning has proven to be a key strategy that has seen many families with farming businesses enjoy sustainable incomes that have enabled them to sustain livelihoods for many generations.
Agribank has recommended that farmers should identify those passionate to pursue farming as a business among their children and teach them all pertinent aspects of managing a farm as a business.
On average, it takes about 10 to 20 years for one to build a highly profitable farming enterprise, Hanks Saisai, Agribank’s technical advisor for crops and poultry, said.
However, he added that one of the critical concerns that most successful farmers face is a succession plan that will see the well-established agribusiness venture passed on to the next generation.
“Overall, most commercial farmers have succession plans for their farming businesses, and this is no exception in Namibia.”
According to Saisai, the average age of a farmer in Namibia is 62, and with agriculture being one of the main contributors to the country’s gross domestic product (GDP), it is important for those running these crucial farming ventures to ensure that such farming enterprises continue in the unfortunate case of death, or when they decide to retire.
“Therefore, to transform an agribusiness into a generational enterprise, an instrumental tool farmers can institute is a succession plan.”
By definition, a succession plan is the process of identifying and developing new leaders who can replace old leaders when they leave, retire or die, he said.
He added that this is equally applicable in the case of a farming business, for a farmer to identify from onset potential persons who can one day carry on the management and leadership of the farm to ensure continuity of business on the farm.
“Over the years, commercial farmers have utilised this tool very effectively, and this has helped them sustain their businesses for many generations”.
According to Saisai, farmers with well established businesses - such as stud livestock producers, crop farmers and even some communal farmers who are renowned in the industry - can transform their agribusinesses into generational business ventures by immediately involving their children from a tender age.
This allows the next generation to understand how the farm operates, makes its income and its crucial assets of production, he said.
“By the time the farmer retires or in the unfortunate case of death, the immediate children can take over the farming business and continue its operation until they also pass it on to their children and then later to their grandchildren as well.”
Moreover, Saisai said an easy way to encourage young people to be involved in farming is by availing information such as financial statements that will show them that farming is indeed a business that can sustain generations.