The ground must go to my sons

An arable farm cannot do without land, which is quite logical. Time has also shown that the company needs more and more land to have continuity. We see economies of scale, farming tradition and sentiment giving way to large, modern and mechanized. Something that was preached by Agriculture Commissioner Sicco Mansholt as far back as the 60s and for which he has not received nothing but compliments.

The fact is that it is not only arable farmers and dairy farmers - they own by far the most land in the Netherlands - who are behind on this. Whether we like it or not, our country is already showing more signs of a very large city with parks. Hard ground is needed to develop it further. Land for housing, infrastructural facilities, nature reserve and recreation, with the effect of pushing up prices.

What's your plan?
I was recently with a farmer in his mid-fifties, like me, by the way, and we concluded that we are still young enough to handle it. I asked him: "What is your plan for the coming years and where do you want to go with your company?" The answer was straight-forward, namely: "My sons want to become farmers and I want to too. They now work outside the home, think, work and undertake fully. From this year on we also want them to be formally and fiscally We would like to ask you to help us fill in the partnership and what else is involved."

He continues: "In addition to working hard, they learn to be entrepreneurial, build wealth and when I'm 65 they take over everything." I can fully follow his ideas and ask how he sees that with the large capital that is in his land. After some hesitation and looking at his wife, the high word comes out. "It goes to my sons in the same way as I took it over from my father. Everything at the lowest possible value and that can also be done fiscally via the Business Succession Scheme (BOR). In the coming years we will try to acquire more hectares through purchase or leasehold. , that should be possible given our financial position."

I understand what he means and wants. As far as I know he also has two daughters, so I ask if it is completely fair to the ladies. Then there is silence for a while and he sums up his arguments as to why this is the case. "The farmer must have land, period. They (the daughters) don't work for it, they study in the big city at our expense. We will also make some money available for them if they want to buy a house or something. The boys do not get it, they are allowed to work with it and there will be an added value clause of at least fifteen years or longer, so that in the event of a sale there is still sharing."

Something to think about
This method is still widely used and in my opinion it is questionable whether this can still be explained to each other and to other children who do not take over in view of the large capital. I also suggest this to him. He says he knows the possibility that you (partly) split ownership and exploitation, but that does not appeal to him at all. He says, "You have stimulated me and I have food for thought." There is still time enough and we agree to discuss this further specifically next time. His position remains upright, namely: the ground must go to his sons. Whether that is fully owned or perhaps otherwise, we will further define together.

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Peter Pals

Peter Pals is an entrepreneur at Farmers Funding & Advies and grew up on a farm. From his farming heart, he has decided to build up a business for business, financial and tax advice for agricultural entrepreneurs.