Farm succession is a subject seen by many farmers as a challenge.
Dave Haden, head of Agri Strategy for ANZ and National Bank, addressed the topic during the recent PGG Wrightson seminar series in Waimate.
The old New Zealand farm succession model no longer worked, for a variety of reasons, Mr Haden said.
Farms were bigger, with more capital employed and more skills required to manage them.
Concepts of family equity had changed, marriages were less stable and people were living longer and needed more money in retirement.
The economy was also more volatile so overgearing created more risk and inflation could not be relied on to recapitalise the business.
A study of 750 farmers showed 71% wanted to sell to the next generation, 66% expected future family involvement in ownership-management, 47% already had family working in the business but only 10% had a formal plan and 50% had no plan at all for transition.
The question he posed was how to manage the transition of the next generation into farming while strengthening the business.
He stressed there was no successful farm succession without a profitable business, and he also outlined the need for communication and planning.
Family issues were "coming out all over the country" from succession and there were some "absolutely heartbreaking" situations.
Succession should be a product of a healthy well-run business, rather than an individual event focused on a narrow point in time.
Throughout the country, farming was a "huge business" and farmers needed to think of their farms as businesses. Family business was very much the lifeblood of the New Zealand economy.
In a family business, roles could lack definition. Around the country, there were now families starting to explore options to really define the roles in farming businesses.
In some instances, they were creating boards as a vehicle to bring in outside thinking.
Defining roles created options for advice, skills and involving the next generation.
Everyone's expectation had to be "on the table", you could not talk too early, too much or involve too many family members and you must be willing to "have the difficult conversations".
If necessary, an independent person could be brought in.
There were three key elements in a sustained family business - a shared family vision for the business as a platform for growth; a profitable business which provided a return on capital invested; and definition in roles of ownership, governance, management and doing the work, giving scope for progressive transition, he said.