Claire Booth is a first-generation mixed commodity farmer in the Dubbo region of NSW, and was a speaker at the Cream of the Crop conference held recently in Warragul, Victoria.
Claire spoke about her journey to becoming a farmer, after a long-held ambition she shared with her husband.
She said that despite growing up in the agriculture sector in the Hunter Valley, there was an unspoken understanding that farming was not meant to be her destiny.
However, after meeting and marrying a man who shared her goals, in the past couple of decades Claire has embraced building wealth and equity through first-generation land and asset ownership.
Claire is also a lawyer, with a long experience of working in rural legal offices. She now focuses on succession planning and capital gains tax strategies for agricultural businesses.
Her presentation at the Cream of the Crop conference was aimed to help the dairy farmers at the conference to understand how to effectively transfer wealth between generations, while minimising tax implications.
In Claire’s experience, succession discussions often fail for a number of reasons — unclear expectations between family members, parents failing to plan for their own future, and there are assumptions about capability that often do not consider women in roles in agriculture.
“Many succession issues arise from poor communication and unclear expectations between family members,” Claire said.
“Parents should first determine their own goals before involving their children or the next generation in succession discussions.”
She also encouraged clear documentation of expectations of other family members, when it came to inheriting the farm business and assets.
This mindset was key to Claire’s discussion and presentation. She discussed the often lack of awareness by farmers about the value of their businesses, and the value of their equity in those businesses.
“Many farmers don’t recognise they’re running large businesses, with assets over $10 million,” she said.
“Australian farmland has appreciated significantly, outperforming most other asset classes.
“Australian farmers believe their land value grows by only about three per cent, when in reality it’s increased six to 11 per cent annually.”
Claire encouraged attendees to think of themselves as farmers and as business owners and managers.
This mindset would enable them to think of the equity in their business as an opportunity to grow and invest in their business growth.
This was reflective of a healthy approach to debt, Claire said.
She also recommended farmers need to understand capital gains tax and potential CGT liabilities, and how to manage these from the business growth perspective and the succession perspective.