Farm succession: ‘The best thing I ever did for me and my family’

It may not be an easy subject to discuss openly but the simple truth is that when succession planning starts on time, solutions can be found and concerns about farm viability, tax, lack of a willing successor, worries about income for the older generation, and the potential impact of marital breakdown can all be aired and discussed in a way that invites solutions.

The key, say the experts, is to seek advice early so that a plan suited to the individual farm’s needs can be established and for farmers to make a will that reflects the vision set out in the succession plan.

Tommy Cooke, meanwhile, is a dairy farmer in County Kilkenny, a member of the national council of ICMSA and former chairman of the organisation’s dairy and rural development committees.

He has an interest in renewable energy and is chairman and founding member of the Irish Wind Farmers’ Cooperative Society Ltd — Meitheal na Gaoithe.

Partnership

Tommy is currently in partnership with his son Adam and plans to bring his son Wesley into the partnership before he retires in four years time so that his two sons can carry on the business.

The process of going into partnership with Adam took about 12 months — it takes time, he added.

Six years ago, in 2015 — when Tommy was in his mid-50s — he decided the time had come to talk to his family about succession planning and the direction the farm would need to take going forward.

He took the bull by the horns, as they say, and suggested the family sit down together and discuss the future.

He says his four children — three sons and one daughter — always showed great interest and enthusiasm for the farm and the lifestyle that came with it, and so the time was right to bring the matter out into the open and allow everyone to have their say.

Tommy, himself, only took possession of the farm in 2009 and subsequently inherited it in 2012 and given the situation he had found himself in, he was determined that things would be different when the time came for him to retire.

Succession Plan

A succession plan, he believed, would afford him peace of mind and allow for the smooth handover of the family farm at the right time.

“I’m a lucky man that has two sons farming alongside me at the moment,” Tommy added. “Really I was determined to ensure that a smooth handing over of the farm was going to happen for my sons compared to my own situation with my father which went on for years.”

Tommy says that for succession planning to work, the farm must have a reasonable level of income to sustain two families.

“That is a critical part in all of this and often that is the pinch point in any farm,” he continued. “What really helped us at the time we were discussing things was the fact there was a model of partnership that already existed and we were able to tap into that and adjust it to our own needs.

“That was easy to do because we got really good advice from Teagasc — that’s a game-changer for farming now, the model that is there and the support and advice that is available.” Now, five years into the partnership everything is going well on the Cooke family farm.

At this point, Tommy is looking at an exit plan as he is leaving the farm at the age of 65.

Next generation

The plan is to bring his son Wesley into the partnership with himself and Adam so that by the time he is ready to retire, both sons will be in prime position to run the business in a joint partnership.

“It is really helpful of course when farmers have sons and daughters that are interested in farming in the first instance and are progessive enough to build the business,” said Tommy.

“We also found ourselves in a situation where we weren’t dividing an existing cake but rather we had to try and make the existing cake bigger. And if that couldn’t happen then the partnership couldn’t have worked either, so the bottom line is that the business is viable and the plan has to be economically sound, otherwise there will be financial strains and we all know that is not good for any business.”

He also says that the relationship between fathers and sons and sons and daughters, etc, is also an important factor in getting a partnership off the ground.

“There has to be respect — an honesty and practicality about the whole thing — if everyone is open and honest that is probably one of the most important things in any business.

“Succession is not something that should be left until the last minute. I think that in the normal run-of-the-mill scenario where a person spends a lifetime working on a farm and is looking at retirement, that is the time to start thinking about succession.

“It’s not something that can be worked out in a short period of time - it takes time and effort and there is also a period of transition and change that needs to be factored in.

“The reason too why I was probably a bit more focused on doing things the way I’m doing them now is because I learned from my own situation with my father which was fraught with unnecessary anxiety.”

Taking the bull by the horns

Tommy didn’t want any of that for his own sons.

“I wouldn’t want anyone else to suffer like that; there is a better way and the schemes and models that are how they work and their help and support available,” he added.

“I also think that the people who want to take on the business after their parents need to be motivated and willing to do it; it’s not about handing over an asset and saying ‘good luck with it’.

“There is a period in any farm partnership which I call the golden years of partnership where all partners are pulling together and everything is going well.

“I’m at the stage where I’m looking at other things to do and my young lands are full of energy and enthusiasm.

“One of my greatest joys is going down to the milking parlor in the morning and seeing the two boys there laughing, joking, having the craic and planning out the day for themselves.”

And, for Tommy, all of this indicates how successful his plan has been.

“This is the very positive aspect to all of this - everyone pulling in a direction, each knowing what direction they are pulling in; everyone having a role to play,” he said.

“What the boys bring to the business - which was missing in my day - is more discipline around family time and their own time.

“In my day it was sun up, sundown, and family came second to the farm; I see the benefits myself now of having a working routine; we finish up most evenings at 6pm unless there is something seasonal that has to be done.

“The normal routine is 6am-6pm and everyone is at home then enjoying family and personal time.

“I’m one of the lucky ones really in that I have two lads who are super keen, work well together, and have great respect for each other.

“And, that is the model everyone should aspire to.

Setting the wheels in motion

Tommy Cooke began thinking about succession when he was in his 50s which would be considered a young age to start thinking about such things.

But he says he has always been aware of disasters within other farm families and this makes him acutely aware of how things can go wrong and sometimes do.

“I know of people who were promised land and then they didn’t get it and it caused extraordinary hardship,” he continued.

“There is a bit of an obsession with land and possession of land and while okay, it’s important, it’s not more important than your family.

“For some people the land is everything and the family comes second and I think that is a generation thing where change is thankfully beginning to take shape now.

“A lot of farmers have gotten the farm late in life and the pattern is set for late transfers, difficulties, and disputes thereafter.

“I suppose there are two ways to do things - the hard way, and the easy way - the easy way is to plan and prepare, the hard way is to leave everything on the long finger; if people want to avoid trouble then planning is key.”

Retirement

At 61, Tommy is just four years away from retirement now.

He says the succession planning has given him the time and space to deal with it and that now “mentally I am nearly there too”.

He is looking forward to pursuing new interests and spending time doing the simple things with family and friends.

“I’m looking forward to seeing my two sons progressing the business and enjoying it all.

“I want to see them being proud of what they are doing and what they will achieve.

“There is no dodging the final bullet in life; everybody has a different situation but I wanted to make sure that what was done to me wasn’t going to happen to my children.

“If none of them had been interested in the farm, I would have been very disappointed because there are a lot of benefits to farming that you don’t get from other jobs - a sense of freedom, achievement, peace of mind.

“Most farmers are decent, honest, progressive people and they instill that in their own children - that is something I really like about the industry.

“It’s the same for anybody brought up in business, they have a work ethic, a sense of purpose because they can see first hand the results of their work.”

He says he is very much in favour of planning because of the huge “sense of freedom” that comes with it.

“I don’t have any fear for the future; in terms of agriculture we really don’t know what’s coming down the road and the best way to deal with all of this is to be prepared,” continued Tommy.

“My sons have the business set up pretty well financially now and that in turns means the farmer is ready for whatever does come down the road.

“I do think as well that a retiring farmer must have other interests and other plans so that as soon as they hand the keys over they are able to move on to something else.

“When you work things through a partnership it allows a farmer time to mentally prepare for retirement because it is a five or seven-year process down the road.

“And, as you are going on down that road, the farmer is getting more and more ready for the change that lies ahead.

“It means then there is no big dramatic transition point and the transition is more gradual and easier to cope with.

“None of us like getting older; but if farmers could only look around or family situations where things weren’t prepared or planned and where everything went very wrong, then that should encourage them to do things the right way,” said Tommy.

“It’s important for farmers to take advice and look around and see what other people are doing.

“There is any amount of information out there now in relation to partnership and succession planning and it’s there for everyone to access.”

A model for any generation

Five years ago, Adam Cooke and his father Tommy entered into a farm partnership and Adam hasn’t looked back.

He says there are “horror stories” in relation to land and its impact on families that everyone is aware of.

The arrangement on his family farm, he adds, is working well and everyone involved is content.

“The important thing for us was how the matter was talked about early and a solution was found,” he continued. It has also given myself and my brother time to work things out and establish the direction we want to go in.”

Meanwhile, Adam feels that the setup on his farm places him and his brother in an ideal situation to deal with the changes that are coming down the road in agriculture.

“My father has put a lot of infrastructure into the farm and ensured at all times that it was the best farm that it could be.

“Myself and my brother are in the best position that we can be right now because of that and whatever comes down the road now, I feel that we will be able to deal with that. “The farm is like any other business - it has to change and adapt with the times and by handing over the reins to us, we will ensure that the business stays going.”

Partnership on rise in farming

IFAC’s recent Irish Farm Report 2021 found that 50% of respondents have given ‘some thought’ to succession planning.

Of that, 29% have identified a successor while a further 21% have a possible successor in mind — although decisions have still to be made.

The report also highlighted how 58% of farmers are currently planning to retire with 31% wishing to remain involved in the farm after retirement.

Some 31% of farmers surveyed expressed concerns about the economic viability of their business while 9% were facing a situation where there is “no interest among the next generation”.

The survey also found that 40% of farmers have not yet made a will despite the risks this presents for farms and families.

“When carefully designed and implemented, succession planning achieves a smooth transition of farms from one generation to the next,” the report goes on to say.

“A carefully designed plan will protect the senior farmer’s income, provide for family members, and position the successor to take the business forward into the future.

“It is important to recognise that succession planning is a process and not a single event, therefore, it takes time to identify and develop a successor. Care must be given to ensure that tax incentives and reliefs are maximised as this can affect the future viability of the business.”