FARM TRANSITION READINESS

Many farms lack a plan, but awareness is growing

By Andrew Brooks

FARMERS IN ONTARIO and across the nation are facing a demographic challenge. Like business owners in other sectors, they’re approaching the stage of life where they will exit the business and pass the reins on to their successors. Many aren’t as ready as they need to be.

“There’s still a lot of room for improvement but there is an attitude change underway,” says Audrée Morin, Business Advisor with Farm Credit Canada. “I see more 45-year-old business owners with 15-yearold kids asking how they can make transition easier, how they can create opportunities for the next generation. They’re being more proactive.”

Statistics Canada’s 2021 Census of Agriculture shows 60.5 per cent of farm owners are aged 55 and up, a significant rise from 2016 when that percentage was 54.5. In Ontario, the average age of farm operators rose from 55.3 years to 56.7 years over the same period, while the younger age categories declined. The proportion of operators aged under 35 went from 9.1 to 8.6 per cent, while those in the 35 to 54 category decreased from 36.3 to 30.9 per cent.

Succession planning in farming… in Ontario

The number of farm operators aged 55 and above rose 8.1 per cent from 2016 to 2021.

In 2016, 8.5 per cent of farm operators had a succession plan. In 2021, that rose to 12.4 per cent, likely due health concerns raised by the pandemic.

Statistics Canada, “Ontario is an agriculture powerhouse,” June 15, 2022

Succession planning in farming… across Canada

Public policy – such as the passage of Bill C-208 to ease the tax burden on farm operators who pass their businesses to children or grandchildren instead of third parties – can help to promote succession planning. The real change has to come on the farm itself and Morin believes that by doing succession planning right, farmers are engaging in effective management planning that furthers excellence in Canadian agriculture as well as building their own legacy.

“Farming already comes with risks and uncertainty. Developing and maintaining a transition plan gives a clear path forward, both for those who want to exit the industry and for those who want to remain or become a part of it. It helps to manage business risk and it gives producers certainty and peace of mind.”

Figures from 2022 show that 22,873 farms in Canada have a written succession plan, with a small minority of those plans including one or more non-family members, while 41,502 have an informal, verbal succession plan. More than 125,000 say there is no succession plan in place at all.

Statistics Canada, May 2022