Company succession and business start-ups in agriculture

Background and Objective

The transfer of farms to the next generation ensures the continuity of agricultural enterprises, but in many cases it is not secure. Consequently, affected farmers are confronted with the question of the future of their farm or the possibility of giving it up. On the other hand, it is often difficult for interested parties without a family farm inheritance to find a production basis for an agricultural business start-up or a lateral entry. Access to land and capital is one of the greatest challenges for new and lateral entrants into agriculture, in addition to the increasing demands of society and changing technical legislation. Farmers, potential farm owners and new entrants are confronted with individual transfer or entry situations, the reasons for which have not been extensively researched.

The aim of this research project is to address the various facets and contexts of agricultural generational change in Germany. The project will identify opportunities, deficits, and possible solutions. This study focuses on three areas of investigation: the issue of business succession and its impact on agricultural businesses and rural areas due to farm abandonment, factors that may influence the takeover of farms by women, and the relevance of non-family farm succession, including the success and failure factors that determine the outcome of this form of farm succession.

Approach

The analysis proceeds by examining the three areas of investigation in the order described above. Firstly, relevant literature contributions were analysed, and suitable datasets, including agricultural censuses, were examined to determine the farm succession situation in Germany. Associations and advisory institutions interviewed experts to assess the situation on farms and record the impact of farm succession and abandonment on the regions and the sector. The second research area is based on existing data from the Thünen study on the living situation of women on farms. This data will be used to analyse potential factors that influence female farm succession by statistically comparing female farm successors with non-female farm successors. Finally, the challenges, including possible success and failure factors of non-family farm successions, will be analysed qualitatively based on interviews with experts, affected farm transferees, and farm donors.

This research project focuses on agricultural business succession and start-ups in Germany. Other sectors, such as skilled trades, and other countries, including selected EU member states, the UK, and the USA, will be used for comparison.

Data and Methods

The collection of information and data is a crucial step in conducting the research due to the limited available resources. Qualitative, oral interviews will be the primary method used. The theoretical framework of this research is based on existing scientific theories of behavioural economics, investment theory, institutional economics, and the agricultural household.

Our Research Questions

1. What are the consequences of farm abandonment, particularly due to a lack of farm succession, and how does it affect farms and rural areas?  
2. Which factors are important when women take over a farm? What are the personal and operational characteristics that define them, and how do female farm successors differ from non-female farm successors?  
3. What challenges, including possible success and failure factors, do non-family farm successors and farm donors face during the non-family farm succession process?

Preliminary Results

The first research area revealed that the lack of farm succession is just one of several reasons for farm abandonment, often intertwined with other causes.  Alongside the well-known effects, such as the growth in farm size, other factors affecting farms and rural areas were also identified. This work identifies the alienation of agriculture and society, the decline of volunteers in villages, and the potential psychological stress experienced by farm managers who give up farming as the main findings. 

No further results are currently available.