SUMMARY
Our preliminary research on generations in farm families suggested that Canterbury farmers at least continued to value family transfer of their farms. However, family transfer can be a long and somewhat difficult process. The decision concerning whether there will be a family successor and the process by which a successor is chosen or eliminated will determine who will be farming in the next generation. Those who delay transfer for economic or family reasons may find that their retirement options are limited. How the farm family handles the process of retirement and succession is critical as the farm parents age and if a successful transference is to be achieved.
This study has provided data comparable to that gathered in a similar project in Canada also conducted by the University of Alberta.
The ageing of the New Zealand population should be encouraging an increased interest in the quality of life for those approaching retirement. For those reaching the retirement years two factors become especially important. The first is the timing and nature of retirement itself. Successful exit from work sets the stage for the next phase of life. The second factor is the quality of family relationships among the senior generation and their adult children. Families are expected to provide emotional support.
In the past, most urban New Zealanders retired at aged sixty, but no longer. Recent legislative changes to state guaranteed retirement income has forced all ages to focus on planning for and making provision for their retirement. Retirement for urban workers has always been distinctive - a clean but sometimes brutal separation from the workplace identified by the presentation palliative of the gold watch, the easy chair or the water colour painting. Nonetheless the process of retirement for rural and urban societies contains both commonalities and differences.
In general, urban families at the retirement stage of life place high value on their relationships with their family members, especially their children. However, although close personal relationships are important, independence of the generations is also seen as highly desirable The ideal is, "intimacy at a distance" which means having close contact with children but also maintaining separate households. From the perspective of older adults, independent living is seen as critical to the maintenance of personal power at a period in life when the power of the younger generation is ascendant. From the perspective of their children, having a separate home and career are symbols of achieving adulthood.
In contrast to urban families, farming families provide a special case both of retirement and of family relationships. The business life cycle and the family life cycle of both generations of the farm family are bound together. An action in one cycle creates a reaction in the other. A decision made by one generation impacts on the other generation. Rather than having occupational and residential independence, farm families have traditionally lived in close proximity and have encouraged occupational following. Therefore retirement for these self-employed families becomes a major business and generational issue. The timing and process of retirement may be dependent upon the availability of a child who is interested in and skilled at taking over the business. The decision to retire therefore cannot be made in isolation if a retirement goal is the perpetuation of the family farm. As well, family adjustments include decisions of non-farming children about what careers to follow; decisions of parents about who will inherit the business; and family involvement in the process of transfer of management from one generation to the next. The very nature of generational relationships in these families make them unique.
Older urban dwellers often have fewer assets than their children while farmers frequently have control over a large capital asset. In terms of the urban parents, their assets are theirs to use freely, in support of their retirement for instance, and normally only become of interest to their children on death as an inheritance, if there is a remaining asset. In the farm family seeking a successful retirement it is the capital asset in the form of the farm that is handed on intact. Generations in these families are bound by sharing their occupation and by living closely together. Because older parents own a business that children may wish to take over, it may be children who have the greatest stake in maintaining close, congenial family relationships.
Farm families are of interest for other reasons as well. Although farmers may value family transfer of their farms, the transfer process can be long and somewhat difficult. The decision as to whether there will be a family successor and the process by which a successor is chosen or eliminated, will have an influence on the future structure of agriculture. Those who delay transfer for economic or family reasons may find their retirement options are limited.
The purpose of this research was to broaden our understanding of the transfer process within generational farm families.
The method for this study was survey research conducted through face to face interviews with groups of farm families in North and South Canterbury and Southland. Interviews were conducted with each parent, with the child most involved with them in the farm operation and his spouse. In every instance the most involved child was male. Each member of the farm family was interviewed individually and separately.
The interviews were carried out by a team of field researchers who had undergone an intensive training seminar that included familiarisation of the survey interview methods and techniques. We were fortunate to have four women who were familiar with agriculture and rural society. Questions in the interview included information on the history of work, management and ownership of the farm; on retirement plans; on personal investment in farming; and on family relationships.
The first objective of the study was to describe the process of movement out of farming by the retiring generation and movement in by the receiving generation. Findings showed that entry was not a similar process for men and women and that the timing of entry and the ultimate levels of farm involvement are quite different. Receiving generation men expect that their greatest involvement in the work and management of the farm operation will be during their early forties. Their expectation of ownership involvement is that it will peak during their late forties. The involvement of receiving generation women ranged from those who described themselves as homemakers through to those whose description was homemaker and full time farmer. Women tend to be partners in financial management rather than in other forms of farm management. Ultimately they have a percentage ownership of the business and are active partners in the transfer process.
Of the retiring generation men, only a little over half planned to retire. These older men expect to retire in their mid sixties while for the older women retirement is expected in their early sixties (the difference being the age gap between the husbands and their wives). A startling finding in this study was that just under half the older men do not plan to retire and expect to be involved in their farms into their seventies.
The second objective of the study was to consider the relationship between retirement attitudes, plans and behaviours. We found that family members had different definitions of retirement. While retiring men and women did not see transfer of ownership as an important element of retirement, ownership was an important symbol for those in the receiving generation. Families were involved in informal and formal planning for retirement but women in the receiving generation were least involved in these plans.
The third and fourth objectives of the study were to further explore the questions of the level of stake in farm and family and the levels of stress of different family members. Respondents in general had low levels of stress, although families with high levels of cohesion were best able to deal with the stress associated with transfer.
Five types of stake in farm and family were identified: stake in the farm, in the success of the business, in the family, in farming with the family and in "throwing off the stake". The different elements of family stake are useful in understanding the intricacies of family relationships in farming families. For example, it is possible for family members to have a high stake in the family but low stake in farming with the family. These may he people in the receiving generation who choose to leave farming or are relatively unhappy working in such close proximity to other family members. All the families in this study plan to stay in farming.
In summary, we felt that farmers in this study represent a group of people who are generally handling the transfer process well. However, there are differences in expectations both within and between the farm family generations and between the men and women of both generations that need resolution if unfulfilled expectations are not to turn sour and threaten the continuity of succession.
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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