Farming is one of the oldest professions in the world. And in the United Kingdom, the people who farm are a part of a rapidly aging workforce. Four in 10 British farmers are older than 65, while the average age is 59.
To attract younger blood into the fields, the U.K. government is running a temporary scheme to entice older professionals into retirement. The idea is that they can apply to receive a lump sum exit payment of up to $155,000 — as long as they either sell their land, rent it out, give it away or plant trees on it.
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This could enable new, younger and possibly more entrepreneurial farmers to enter the sector as land becomes available. However, the scheme is not solely designed for new entrants — others may benefit from the opportunity to buy new land, including neighbouring farms looking to expand, or investors seeking to diversify their portfolios.
On my family farm (and no doubt many others) the exit scheme is a hot topic. But my 69-year-old father, who owns a 250-acre upland farm in west Yorkshire, is not tempted.
For a start, he is confident that he will continue to receive government subsidies (albeit at a reduced rate), so would not necessarily gain financially from the plan. Instead, it would put pressure on him to transfer the farm, perhaps prematurely. Farm succession is a long and complex process, and my father has no plans to retire any time soon.
Nor is he interested in doing anything else.
But some farmers will gladly put away their wellies and take the government up on its offer in an increasingly challenging economic environment. Making a farm profitable is difficult for farmers across Europe, with a reported four million closing between 2005 and 2015.
Recent figures show that U.K. farms in hilly and mountainous areas made an average annual income of just $24,000 — less than half the national median salary.
As well, planned changes to farm subsidies may not work out. Formerly linked to European Union policy, they are being phased out in favour of new grants, which will reward farmers for their efforts toward environmental sustainability.
That transition could be troublesome. Prior attempts at similar schemes have often been a bureaucratic nightmare, with farmers facing delayed payments and uncertainty.
So given the challenges of making money in farming, the lump-sum exit strategy will be tempting, and could also bring benefits to the sector.
It could also be an opportunity to see more women farmers enter the traditionally male-dominated sector.
But starting out as a new farmer is not easy. Significant start-up capital is required and there are steep learning curves.
And as many older farmers quit, new entrants may prefer to use more cost-effective methods, reducing labour requirements and therefore local jobs.
We don’t know how many farmers will be drawn away by the lump-sum payment and retirement, and what impact their departure will have.
Those who stay, like my father, will do as they have always done and carry on farming. They know what is on offer for those wanting to leave. It is much less clear what will happen to those who remain.
Peter Gittins is a teaching fellow in the Leeds University Business School in the United Kingdom. This article was first published in Reuters’ The Conversation and has been edited for length.
