I have just finished reading a very interesting report by Nuffield Scholar Rebecca Hill titled "Succession of the family farm:

dividing the emotion from the business".

Ms Hill used her Nuffield Scholarship to travel widely throughout the UK, Canada, France, Belgium, Paraguay and Brazil to learn how farmers successfully pass on their farm to the next generation.

A big problem in the UK is that many farmers cannot afford to retire, having made little or no provision for retirement. Farming families are often asset rich and cash poor, and this is becoming an increasing problem. The dilemma they face is that the gap between the value of farmland and return on capital is widening.

Farmers live their lives for now, investing in new machinery and the business. They often farm as if they are going to live forever. The problem with that attitude is that many do not save for the future by taking money out of the business now. Put quite bluntly, they cannot manage without the income from the farm, or afford to buy a another house so the next generation can move into the farmhouse.

The main message for farmers is that they should not leave it until they die for others to sort out. There is a distinct possibility that such a policy will degenerate into chaos, and probably not result in the outcome they wanted.

Life is 10 per cent what happens and 90 per cent how we react to it. This philosophy can be applied to transition planning - one of the biggest challenges facing family farming businesses. Those who fail to plan, plan to fail. Without a proper succession plan in place, the family operation could be lost to sibling fighting and legal fees. It's also important to have contingency plans for the unexpected, such as illness and early death.

If you choose to make a will it must be carefully drafted, as a poorly made will may be worse than no will at all. The estates of deceased farmers are increasingly proving to be fertile ground for disputes relating to wills.

It's also important to accurately record people's wishes in a legal format. When dad tells you not to worry and that the farm will be yours someday, don't accept that. In this world of litigation, everything has to be written down.

One of the most difficult things for farmers is to give up control. Giving up control does not necessarily mean that you retire or have no involvement in the business. It is re-inventing yourself into a new role, to enable the next generation to take hold of the reins.

Often conflict is created by family members who have married into the family. When a conflict begins between in-laws, it often halts any thoughts of succession or passing down the family business. The unit may spiral into disarray with no long-term strategy. Such a business can very quickly become stagnant and not deal with issues.

Communication, with outside mediation, would be the best option, but so often nothing happen at all.

Ms Hill stresses in her report: "One of the key things identified in my travels is that communication is key to a successful transition of assets and business.

"It is important to differentiate between the passing down of the assets and that of the business. The assets such as land, houses and investments are completely different from the actual business, and when it comes to passing them down can be handled very differently.

"So often I have been told, 'I have no idea what mum and dad's plans are about inheritance, they just won't talk about it'."

According to Ms Hill, when it comes to planning your succession, all parties need to be involved: parents, grandparents, children, husbands, wives etc. Anyone who will inherit a piece of the pie needs to know what to expect, and how big that piece will be. "If there is friction, involve an outside professional to broker any talks that take place."

Of course the big dilemma all farmers with more than one child faces is how to treat them fairly. Sadly, fairness is tough but not always equal.

Taking responsibility for this fairness issue is critical to the long-term health of a family and the legacy. Fail in this regard, and there might never again be a complete family reunion. Stick your head in the sand and you can count on the family farm becoming part of the holdings of the highest bidding neighbour.