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Is the Lump Sum Exit Scheme the answer to a succession plan?

Father and son thinking about succession planning

Every farmer has a system.  Precision farming according to their own individual goals and KPIs; according to the weather, landscape, location, soil, terrain. Never mind whether they’re farming crops or managing livestock. Every farmer, every farm unique. But what every farmer has in common is that stage in life and farming, when it’s time to think about a succession plan.  Handing over the reins to the next generation or transitioning into something new, leaving farming altogether.  But, how?  What happens to the future of your farm and livestock?

It’s not as simple as hanging up your hat and walking away.

You need an exit plan.

DEFRA’s Lump SUM Exit Scheme (LSES), launched in April this year, offers to pay farmers in England to exit farming. By receiving their BPS payments up front, in return for giving up future BPS payments, it also means transferring out of their land (keeping up to 5 hectares) or turning it over to a woodland creation programme. The scheme offers up to £100,000 (based on a BPS payment calculation with a 2.35 multiplier). So far, it looks like this scheme will only run for this year and will only accept applications between April and September 2022. So is there enough incentive to really consider it? And will it really help new farmers enter the industry?

Sheep farmer Derek is not sure. “It seems only natural to want to have a succession plan in place, but it isn’t always possible.  However, the farmers I know, who don’t have children interested in taking on the farm, are finding other ways of continuing the legacy. For example, training a worker to carry it on.  In helping people get into farming, perhaps the government could look elsewhere.

“The challenge is, unless you inherit a farm, finding land and capital to set up is really hard. It feels like there are increasing numbers of amalgamated farms being bought up, pricing most people out. What the LSES offers, doesn’t really seem that advantageous after, what might be, 60-plus years of working really hard to build up your livelihood”.

Technology Crucial to Successful Farm Transition

Whatever your stance, technology is undoubtedly going to be crucial to the successful transition of farms from one generation to the next or for young farmers who dream of running their own operation.

Precisely why AgriWebb started.

Founder, Justin Webb, experienced these very challenges first-hand, during a generational shift in the management of “Eddington”, his family’s 150-year-old sheep and cattle farm back in 2014.

Like most sheep and cattle farms, Eddington was primarily managed from experience. And ‘trial and error’. Pen and paper the record-keeping tool of choice!  Time-consuming double entry records and “paper mountains” to meet compliance standards the norm.

Business decision-making based on best guess, rather than best data-driven insights. This then can make it really hard to get a really transparent view of the farm business. Whether to get investment or when passing it on to the next generation.

Livestock Farmers Deserve Better

That’s why AgriWebb focused on innovating to serve the livestock industry. Determined to empower livestock farmers with the best tools to feed the world sustainably and for generations to come: it can form part of the succession plan.

A relatively new adopter of AgriWebb, Derek told us, “I can already see that you can use AgriWebb to evidence your business in terms of the size and breadth, stock, and what to sell and when. You can see where you might make efficiencies, which can form part of the business plan. It helps us understand where roles might be important in the future, for example, will we need administrative help in the same way we do now? Or could we redeploy that labour to other tasks that can grow the business?”

Undoubtedly, profit, efficiency and future proofing is key to sustainable farming. Record farm operations to create powerful insights. Understand trends or anomalies. Then it is easy to see what has happened and what could be improved.

Forget those scraps of paper. Data can be handed-over easily.

Data – Historical and in Real-Time

The younger generation comes with an in-built appreciation and expectation of innovating technologies.  After all, it’s been a fully immersive part of their education both in and out of the classroom.  And it makes them perfectly placed to embrace the sometimes “novel” practices of capturing data and valuable insights from industry-leading livestock management tools. It makes being part of a succession plan easier for them, by being able to understand the business visually.

Assessing farming practices and utilising available technology to make insights-driven decisions and predictions for the years to come.

So, for the next generation, technology will be their in-the-pasture, back-pocket companion.

Move your farm forward today. 

Sign up for your free trial today or read more in our State of the Farmer Report.

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