Farming faces a period of dramatic change. Currently there seem to be as many conversations about using land for carbon sequestration as there are regarding food production. Will Vertical Farming become mainstream and the food to feed people in London be grown hydroponically in the disused areas under the city? Certainly, any form of future government support will be different and more demanding, and the structure of farming will change. But with all the discussion about the new, we must also consider the old. What are the options for farmers contemplating retirement? How do they engineer a dignified exit when they have given their lives to farming and all their wealth is locked up in land?
George and Mary have been married for over fifty-five years. They started their life in the two up, two down cottage on the farm, moving into the farmhouse when George’s father died and Mary cared for George’s mother.
As an ambitious 30-year old farmer, George was one of the first to install an abreast parlour and the first dairy farm in his area to paddock graze and start using continental bulls to improve his calf income. The farm increased in size when George purchased land from a retiring neighbour. Mary admits that living with George can be a bit of a challenge but accepts that his stubbornness has helped them get through some tough times during their farming life. Their two boys enjoyed a happy childhood on the farm, but neither were prepared to follow agriculture as a career, and now both are married with families of their own with no intention of returning home.
On 3 June 2009, George’s milk buyer Dairy Farmers of Britain went into receivership. Unable to find an alternative buyer for a relatively small amount of milk, the cows had to be sold. Without that monthly milk income, the cash flow dried up and an overdraft slowly built up. As the years ticked by, what work George could do in a day in his thirties now took longer and longer. Mary on the other hand really would like to retire, downsize and spend quality time with George while they are still able to be active.
George and Mary are not unique in their situation and like many of their contemporaries they know what their last bit of land cost in the seventies, but not the current market value of a house, a cottage, buildings and land. Through FOLK2FOLK the current assets of a farm can be used to prepare for retirement. In George and Mary’s situation, the monthly letters from their bank caused unnecessary stress and upset. Refinancing that debt against the land assets of the farm could create some space to make longer term plans.
Having lived on the edge of the same village for their entire life George and Mary are part of the community, through their church and village hall activities and Mary’s lifelong involvement with the local WI, and would like to remain in the area for their retirement. By using their land and property assets to access a loan, FOLK2FOLK can enable them to be in a cash position to buy a local buy-to let investment property.
As everything starts to fit into place for an orderly winding up of the farm business, the loan can be repaid from the farm sale proceeds leaving George and Mary with the option of moving into their investment property in the village and the opportunity of becoming FOLK2FOLK Lenders, investing some of their surplus funds to earn an inflation-beating rate of interest each month to supplement a comfortable retirement.