When CBS reported that in Limburg only 34% of farm businesses had planned for succession versus 41% in the rest of the Netherlands, alarm bells went off. It then became clear that there were some criticisms to be made of the study, but nevertheless LLTB and LAJK both see the importance of paying attention to the theme. After all, is there still enough of a future for young farmers in Limburg? Where are the opportunities and how do you proceed, as a successor and as an entrepreneur who slowly but surely wants to stop? Kiempunt talked to Mayco ten Kate, chairman of LAJK, Léon Faassen, chairman of LLTB and the Huids family from Vilt of Fruit Company Huids.
Small or large, less and less in between
"If the agricultural business is kept completely up-to-date, the young generation will be fine," says Mayco ten Kate, president of LAJK. But that's exactly the crux of the matter. For entrepreneurs who have postponed investments because of doubts about the future, lack of resources or other reasons, the bill is passed on to the successor. "If you suddenly have to invest a lot and you know that the rules will be changed in the short term, then as a young farmer you feel put on the spot. Ten Kate therefore predicts increasing differences between businesses. Small-scale businesses can more easily serve a niche market or develop a branch alongside the farm. Large-scale companies, on the other hand, exploit economies of scale, work more with staff and thus create a healthy revenue model. "Medium-sized companies will find it more difficult. They are often too big to serve a niche market or to expand. At the same time, further increases in scale require large investments and are becoming increasingly difficult. In the end, it's about what you as successor want to do with the company and you have to analyze what opportunities are there. During the acquisition process it is wise to already take steps in this direction."
Mayco ten Kate
Léon Faassen agrees that uncertainty about what the rules will look like in a few years' time is a major obstacle to finding a successor. "Three to four generations ago, it was natural for your children to take over the business. Now there is so much uncertainty about the regulations and government policy that many entrepreneurs do not dare to make investments that have to be recouped in 20 or 30 years. Everyone understands that there must be rules. But lay them down for at least 10 or 15 years! Then there is clarity and you know what you can assume." The positive side is that a future in agriculture has become a conscious choice, after thorough research. "The new generation of farmer has really thought about the future and goes about their business in a well-funded way. Generally they are also better educated, with a commercial or business-economic bent. Then you are better prepared for entrepreneurship and you see opportunities in the limitations."
"A future in agriculture has become a conscious choice, after thorough research."
Explore yourself and your possibilities
Also Ten Kate is convinced that there is still perspective for young farmers, even if it is becoming increasingly difficult. He has three pieces of advice for anyone still weighing their options.
- Test yourself: is this really your passion?. First, make 80-hour weeks for a while and ask yourself again if it's worth the hours and the headaches. Because one thing is for sure: you really have to want to go for it in order to succeed.
- Take the time to get a clear financial picture. Don't take any chances; it just won't work. With many acquisitions, it takes five, ten or more years for everything to crystallize. Gradually the challenges and opportunities will come along, just let it happen.
- Get off your yard and explore multiple options. It may well be that your first option turns out to be the best, but you won't know that until you broaden your view. Go work somewhere else, look abroad and talk a lot to other farmers.
From the practice: Fruit Company Huids
When at Fruit Company Huids frost and hail caused damage to the apples several years in a row, Germaine Huids decided to look into options for processing that fruit herself. "More and more light alcoholic beverages are coming on the market and consumers are open to innovations in that area. In Belgium I took a course to learn how to make apple wine or cider; the fresh taste of the dry fermented ciders turned out to be very different from what we know from the mass market, where the ciders are very sweet. With the help of LIOF and HAS, we did market research." Step by step, an own cider emerged under the name Cédarí, named after Germaine and Eric's three daughters: Céline, Danaé and Richelle.
The Huids Family
Studying and collaborating
And not only as a namesake, daughters Richelle and Danaé are involved. Richelle: "I studied Food Innovation at the HAS and it was of course very interesting to help think about marketing the cider. Surprisingly enough, my heart went more to the figures and steering of agricultural companies than to the creative part. That made me realize that I would be better off making the switch to Business Administration."
With her background in Facility Management, Danaé is involved in contacts with the hospitality industry and organizing activities. For several years a regional market has been organized at the fruit farm. Danaé: "The excise permit has just been granted and within the training I now have the opportunity to write a plan to further develop the regional market."
The catering industry and local produce stores in the region will be important sales channels. For example, De Reusch in Schimmert will sell the cider in its store and in the catering industry. Germaine: "We know it takes time, but the interest is growing. The new bottles have been ordered and the labels are being developed. Once the lockdown is over, we will be ready for the launch."
Daughter Céline is currently in her final year of high school exams and still has considerable time to discover where her interests lie.
"We are not pressured by our parents at all".
First to explore
But that does not mean that the daughters will take over the company. Germaine: "Of course it would be nice if they want to take it further. But first let them look around and discover what they want and what suits them. We have the time, we have only just passed the age of 50." Richelle also approaches it as an interesting case study for the time being. Richelle: "From my study I also follow the minor Business Successor and Director. Part of it is writing an acquisition plan, in which you outline several scenarios. Of course I use our situation as a starting point. I also definitely see opportunities, but I want to orient myself broadly. I am happy that there is room for it, we are not pressured by our parents at all." The Huids family is clearly taking their time to discover whether and how the business can be continued by the children. It is a frequently heard sound among farmers: involve family, but do not exert pressure, then gradually it will become clear whether there is a match.
"They learn the craftsmanship from mom and dad, they get the rest outside the door."
Innovation from outside
Léon Faassen also sees plenty of examples of business succession by sons or daughters. "I'm thinking of the very successful agricultural childcare center De Mukkenstal, which grew out of the parents' dairy farm. Such a concept really comes from the ideas of a new generation.
Another example: Susanne Görtz who sells her cherries to bakers all over the country, because from her commercial training she looks at her market differently. They learn the craftsmanship from mom and dad, for everything else they get inspiration and marketing knowledge from outside. That's why we thought it was important to set up the Young Agrofood Professionals program together with LIOF. Look at social developments and think about them together. Then you create cross-pollination between those young entrepreneurs and new concepts arise of their own accord."
Opportunities outside the family
Léon Faassen and Mayco ten Kate both mention Boer zoekt Boer as an initiative to facilitate succession outside of one's own family. Mayco: "With webinars and guidance from coaches and advisors, extra-familial acquisitions are supported. Often this is financially extra complex and you have to work with lease or hire-purchase constructions to be able to grow in it. For farmers between 50 and 60 years old, this is interesting: they are not in a hurry, but in this way they create opportunities for themselves and the young farmer. A good example is Niels Kwikken who started working in the poultry sector himself and later took it over. For those who really want to, there are opportunities, also in the future."
More about business succession? Also read the background article on business succession.