Page 2 - National Poultry Newspaper

Why family run egg farms should consider succession planning
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HANDING over the family farm may be the only way to ensure young generations can get a foot in the poultry industry.
A good place to start is by seeking advice from your accountant and other professional business prac- titioners.
home today is don’t leave it until it’s too late.
This is because, if they were to start from scratch, the capital costs of setting up a modern-day egg farm could prove prohibitive.
Another good starting point is by having a con- versation with a financial counsellor.
Get some professional advice and ensure that the expectations of the retir- ing generation and the next generation taking over the farm are clear.
And why cross genera- tions currently working together on the family run egg farm should consider succession planning.
You may not be aware that many financial coun- sellors can help steer farm- ing families in the right direction, with both succes- sion planning and financial management issues.
The following are links to rural counselling ser- vices in each state:
Recently, Egg Farmers of Australia fielded many calls from farmers on fam- ily run egg farms seeking direction on where to turn for succession advice.
it’s best to lay down some structure now – because after you have ‘expired’ is too late.
industry leaders.
The other danger is that
These go hand in hand.
Queensland – business. qld.gov.au/industries/ farms-fishing-forestry/ agriculture/agribusiness/ one-stop-service/support/ funding-grants
Succession planning is a term to describe one generation – for example, Mum and Dad who are verging on retirement – committing to a clear plan to gradually hand over the family farm and business operations to a new gener- ation – their adult children.
If the current generation of managers do not show the next generation – their adult children – that they value their input and have confidence in their ability to manage our egg farms into the future, then they may simply lose interest and move on to other ca- reer opportunities.
This can lead to all sorts of family bitterness and conflict between siblings and their parents.
Rural counsellors also help you consider the amount of money that age- ing parents handing over management of the farm to their adult children need to have accumulated in order to exit the business and retire.
South Australia – pir. sa.gov.au/grants_and_as sistance/drought_support/ rural_financial_counsel ling_service
It is worrying that too few family farms across Australia have such a plan.
Therefore, we risk los- ing good young people who could otherwise have been our future egg
The second question is, where do I begin when it comes to succession plan- ning?
Victoria – rfcsvicne.org. au
Legal experts warn that
The key message to take
National: recovery.gov. au/programs/rural-finan cial-counselling/RFCS
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growers’ supply arrange- ments or impose additional costs on growers.
ency for growers, including by clarifying the circum- stances in which a proces- sor may require growers to upgrade their farm facilities and when processors can make changes to their grow- er manuals.
Some of the terms also required growers to make significant capital invest- ments or contained imbal- anced termination clauses.
Additional changes have been agreed to provide clar- ity about the circumstances in which processors can impose additional costs on growers, and to balance no- tice periods for termination clauses.
ACCC deputy chair Mick Keogh said, “We were con- cerned that broad terms, such as allowing proces- sors to vary supply arrange- ments during the term of the agreement, could po- tentially lead to significant financial harm to growers.”
breaches.
“We expect all chicken
by MELINDA HASHIMOTO CEO
Having no plan in place can lead to two problems.
without a plan, the expec- tations of all of the family members who currently work on the farm may not be managed appropriately.
In fact, when it comes to succession planning, one thing rural counsel- lors specifically look at is whether the business is viable to sustain the next upcoming generation on the family egg farm.
Tasmania – business.tas. gov.au/related/hardship_ and_financial_counsel- ling
The ACCC’s investigation focussed on the types of potentially unfair contract terms that were identified in its Perishable Agriculture Goods Inquiry final report.
meat processors to continue working with growers and grower groups until the con- tracts they have in place are clear and balanced.
The first question to ask with regard to succession planning is, what would happen if the current farm principal was unable to continue to do their role?
Western Australia – ru ralwest.com.au/programs/ rfcs-wa/
NSW – rfcsnsw.com.au
Give poultry growers a fair go
Poultry Industry Calendar of Events
2022
OCT 30- NOV 1 – Poultry Tech Summit, Altanta, US, www.wpsa.com
NOV 6-10 – SIMA Paris, France, en.simaonline.com
NOV 8-10 – European Symposium on Poultry Genetics, Hannover Germany, www.espg2022.org
2023
Jun 21-24 – European Symposium on Poultry Nutrition, Rimini Italy, www.wpsa.com
SEP 4-8 – Congress of the World Veterinary Poultry Association, Verona Italy, www.wvpac2021.com
How to supply event details: Send all details to National Poultry Newspaper, PO Box 162, Wynnum Qld 4178, call 07 3286 1833 or email: design@collins.media
poultrynews.com.au
07 3286 1833
NSW Farmers will play a key role in developing a new code of conduct to deliver price transparency and fair contracts in the poultry meat market.
many family farmers being forced from the industry.
Mr Wojcicki said poul- try meat growers needed stronger protections through a code of conduct to make the industry more sustainable and beneficial for all participants.
one-sided contracts. “Sadly, this is an industry
Mr Wojcicki said.
“It’s essential we imple-
NSW Farmers poultry committee chair Peter Wojcicki said growers had been calling for a code of conduct, because pro- cessors and supermarkets continued to dominate the supply chain and in turn family farmers were miss- ing out on the ‘fair go’ Aus- tralia prides itself on.
“Consumers might not be aware of the situation because of the number of brands on the market, but many of them are actually owned by the same com- pany.
“Australian poultry meat growers are highly exposed to risk,” Mr Wojcicki said.
The Australian Competi- tion and Consumer Com- mission identified the po- tential for unfair contract terms in its 2020 inquiry into perishable agricultural goods, which was a water- shed inquiry for agriculture and confirmed the likeli- hood of power imbalances in fresh food supply chains.
Funding to develop the code of conduct was grant- ed by the federal govern- ment to the National Farm- ers Federation, with NSW Farmers taking the lead in engaging with growers, processors, supermarkets and retailers.
“The poultry meat pro- cessing space in Australia is alarmingly concentrated, with just two companies responsible for processing 70 percent of the nation’s chicken,” Mr Wojcicki said.
where there are geographic constraints and so few pro- cessors, that farmers are at their mercy.”
ment an effective code gov- erning poultry meat grow- ers and processors so that everyone gets a fair go.”
The lack of competi- tion in the processor sec- tor has meant growers had limited bargaining power against the processors, with
“With so little compe- tition in the processing space, these big companies are basically able to offer contracts on a take it or leave it basis.”
“We’ve heard stories from growers forced from the industry burdened with huge debt, and for those left growing, lack of choice means growers have lit- tle choice but to sign
“More needs to be done to protect poultry meat farmers, whose hard work is enjoyed by millions of Australians every week,”
“They need to make huge infrastructure investments to raise birds they do not actually own, and the con- tracts offer little security.
The Victorian Farmers Federation and Australian Chicken Growers Council will work in conjunction with these efforts to deliver a national framework for the sector.
Unfair contract terms for chicken meat processors
tracts,” Mr Keogh said. “The proposed changes to these laws tabled during the last federal parliamen- tary sitting will, if enacted, better protect Australian small businesses against unfair contract terms, and will enable the ACCC to seek pecuniary penalties for
Help shape future of egg industry
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science agency CSIRO.
coming years.”
“The community’s
The research will explore community attitudes towards the egg industry across a broad range of topics, including food secu- rity, biosecurity, trace- ability, animal welfare and environmental im- pacts.
insights are instru- mental in helping shape industry plans.
Australian Eggs managing director Rowan McMonnies said, “We encourage Australians who want to have a voice on is- sues related to the egg industry to take part in the public open sur- vey, as the data col- lected will be shared with Australian Eggs to shape their agenda and priorities over the
“The results act as an indication as to what we need to consider internally and then in- tegrate into our indus- try plans.”
“Each year, these survey results allow us to pause and see the industry through the community’s eyes.
The research is the fifth annual cycle of community engage- ment to inform the Australian Eggs Sus- tainability Frame- work.
To participate in the research, go to voc oniq.com/eggs
“Several processors have agreed to amend certain contract terms to address some of the ACCC’s con- cerns.”
“The thresholds and the lack of penalties in the current unfair contract term laws create challeng- es for investigations in- volving agricultural con-
“We’ll be monitoring the industry to see that it hap- pens and will re-examine these and other contracts if unfair contract term laws are reformed.”
The changes that these processors have agreed to will provide some addition- al certainty and transpar-
Processors will engage with growers and grower representative groups di- rectly about amendments to their agreements.
Page 2 – National Poultry Newspaper, June 2022
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