Intergeneration Transfers and Retiring Farmers

The percentage of farmers who are approaching retirement age is increasing. The census of agriculture shows that in 2001 there were a larger percentage of farmers over 55 years of age than was the case in the previous censuses. The transferring of the assets held by these farmers to the next generation has important policy implications for the structure of Canadian agriculture. It also raises several policy questions for future research. Using data from 2005 Farm Financial Survey this paper examines the transfer of assets for both one and multi-generation farms. We have identified 73,900 farms where the oldest operator is 55 or older. Of these farmers 18,800 are operated by more than one generation of farmers. In the case of these farms the next generation is already involved in the farm business. The remaining 55,100 farms are operated by only one generation of farmers. The total assets based on market value for the one generation farms are estimated to be $47 Billion. The assets which are expected to be transferred to the next generation total $33.4 Billion. The majority of these farms are expected to be bought up by the multi-generation farms to achieve economies of scale or to be purchased by new entrants as lifestyle farms. In the case of multi-generation farms the total assets owned are estimated to be $40 Billion. The assets which are expected to be transferred to the next generation total $34.1 Billion. These farms are expected to stay within the family and be purchased by the next generation. They will continue to be operated by the next generation and in some instances on a larger scale.