A fierce desire to grow their equity, and the unpredictability of the Bega seasons, has seen Tom and Gemma Otton take up a share farming role with Peter and Jeanette Clark at Kongwak.
However, when that business is also a family with multiple members, both on and off farm, emotions and conflict can easily arise.
It’s a difficult process to achieve in a way where everyone is pleased with the result, but it can be done.
Shane Gee farms 350ha at Jerry’s Plains in New South Wales, milking 440 Holsteins, in partnership with his parents and brother. The farm has been in the family for close to 100 years, taken up originally by Shane’s grandfather and passing to Shane’s father on his death.
The farm has seen several successions and with a new generation entering the workforce has experience to share.
Growing up both Shane and his brother Paul has aspirations of taking over the dairy but “Mum and Dad wouldn’t let us go straight to the farm from school,” Shane says.
“It was the late 80s, early 90s when it was quite dry and they were flat out and doing it hard. They wanted to build it up so it could support two extra-people full-time. They wanted us to go out and get a trade, to have new experiences and to work out if the farm was where we really wanted to be.”
“Paul became a fitter/machinist and I got a trade as a mechanic. We had a five-year plan for the farm but it kept getting turned over because the time was not right for everyone to come back so I ended up joining the police in Queensland.
“I did ten years up there but eventually I’d had enough, and whether the five year plan was ready or not, I came back to the farm and we made it work.”
Making it work meant engaging everybody within the family and employing the services of a professional succession planner.
“We all sat down - Mum and Dad, myself, Paul, Paul’s wife and our two sisters and their husbands – and talked about what we wanted, and having a facilitator was very important to that.
“The facilitator can run meetings and give them structure and manage the different personalities. They can tone down the overbearing ones and get more out of the quieter ones so everyone gets to have their say.”
Isobel Knight from Proagtive, a specialist succession firm for farming families, has been a succession planner for 17 years and concurs with Shane’s comments.
“Involving off-farm family members and in-laws allows everyone the opportunity to feel valued,” she says.
“It also ensures there are no Chinese whispers and potentially dangerous assumptions being made, and it allows for rational discussions when someone neutral is involved. It is better to know what you are dealing with rather than pretend an issue doesn’t exist.”
Using a facilitator aids the difficult conversations that arise in any business change-over. When should the older generation hand over the reins?
Should farm management go to the eldest son?
Would a daughter be a more appropriate choice?
What skills can in-laws bring to the business?
How are off-farm members compensated?
And through these discussions different roles within the business can be assigned.
For the Gees this means Shane deals with the bank, finance, benchmarking and accounts – “if there’s a form to be filled out it seems to end up in front of me,” he laughs, while Paul looks after herd management and parents Colin and Rita are still actively involved in the day to day running of the business.
Succession planning has also allowed the sisters to retain a connection to the land they grew up on, and is making provisions for the next generation to be involved with the dairy business.
Surprisingly there may be succession opportunities unique to dairy farms.
“It is very hard to establish oneself in a dairy operation without the capital backing of an existing family business and this should not be underestimated,” Isobel says.
“There can be financially rewarding arrangements made that wouldn't exist in the commercial world.”
Those financial arrangements can lead to another advantage of early succession planning: increased profit.
“A study undertaken by Harvard in the late 1990s looked at family businesses across UK, USA, Australia and NZ,” Isobel says. “Those who had any kind of a written succession plan were up to 30% more profitable.”
So what advice would Shane give to those considering how to tackle succession?
“Have an independent facilitator and start early and work on it over a few years. It gives everyone time to have a proper think about what they want to do.
“Then you have a few meetings and talk it out and eventually you might come to an agreement that everyone’s happy with. But just make sure you do it.
“There’s no point in waiting till a will reading. You’re better off knowing in advance.”