Succession planning, government co-operation required to ensure success of future farmers

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TRURO - With many of today's farmers reaching the age where they are ready to hand the reins down to someone else, succession planning is reaching ever more critical stages, agriculture officials say.

But the cost of setting up a farm operation for young or entrant farmers can often be extremely prohibitive, said Dennis Boudreau, president of the Nova Scotia Federation of Agriculture, during a break in proceedings at the annual general meeting.

"The industry is very capital intensive. It's hard to jump into the industry to make a living," he said. "We need to find the right tools, working with government so the middle-age farmer can pass their farm to somebody that wants to start (up)."

But raising the capital for such ventures is a "huge challenge," Boudreau said.

"Probably $100,000 wouldn't start you too far in much of a farming venture," he said.

One initiative available to new farmers is the FarmNEXT program, offered through the Nova Scotia Farm Loan Board, which can provide up to $30,000 in interest subsidy for those who qualify.

"With most commodities it could be a year or two before you even have any profits coming," Boudreau said. "This gives you that little bit of operating money so you can get to that profit point."

Henry Vissers, executive director of the federation, which is based in Truro, agrees with the merits of the FarmNEXT program. But he also believes that budding farmers could use further assistance with obtaining capital to ensure their future success.

"It creates challenges to make that major investment to get started," he said. "Most lenders will look at your business plan and think you've got a good idea and all the rest of it. But if you are low equity then it is a challenge to get the loan. We think the government should be working towards trying to remove some of those barriers through public policy."

One way to do that, he suggested, is for the Farm Loan Board to take a bit more risk with new farmers by reducing the amount of equity required to qualify for a loan and to also offer loan guarantees.

"There could be a risk of losing a couple of loans but overall we think it would be something positive for farmers," Vissers said.

More controls could also be put in place, such as reviewing a new farmer's progress on an annual basis.

"They have the capacity to do that as well and it would help the new entrant to make sure they stayed on track," he said.

"The farm community is getting a bit older and we need to roll over to the next generation. We have to make it possible not only for the new person to get in but for the person that's leaving to be actually able to get out, to be able to sell that farm so they can transfer it on to the next generation."

Before the recent provincial election was called, he said, the NDP had announced more funding to add to a succession program already in place.

And, so far, the new Liberal government is showing signs of continued co-operation.

"This government has promised to carry on with that," Vissers said. "I think we're getting some good signals from them."

Twitter: @tdnharry


Organizations: Nova Scotia Federation of Agriculture, Nova Scotia Farm Loan Board, NDP

Geographic location: Truro

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