Crisis management for farmers: Ensuring your wishes are honoured

As a farmer or rural business owner, your livelihood is deeply intertwined with the land you work and the business you run. The unpredictable nature of farming, coupled with the potential for sudden health issues, emphasises the importance of having robust crisis management plans in place.

Personal crises, particularly the loss of capacity in the owner of an agricultural business, can have an immediate and profound impact on farm operations. One critical aspect of protecting yourself and your business in this scenario is having plans in place to ensure your wishes for you and your business are clearly outlined and legally enforceable.

The risks and impacts of loss of capacity

Lack of capacity can have a significant impact on business operations. Day-to-day management, decision-making and long-term planning are all at risk of disruption and the financial health of the business can deteriorate rapidly if responsibility for financial management is unclear.

In the case of family-owned businesses, as many farms are, the lack of a clear plan in the event of loss of capacity can create family disputes and, in the worst case, jeopardise the future of the farm.

Establishing Lasting Powers of Attorney (LPA)

A lasting power of attorney (LPA) is a legal document that can help you mitigate these risks. An LPA allows you to appoint one or more individuals (known as attorneys) to make decisions on your behalf if you become mentally incapable. You should choose attorneys who are trusted individuals, who understand your business and share your values, for example family members or business partners.

There are two types of LPAs. Property and financial affairs LPAs allow your attorneys to manage your finances, including your farm’s bank accounts, investments, and property transactions, which will ensure that your business operations can continue smoothly.

Health and welfare LPAs cover decisions about your personal health and care, such as medical treatment, living arrangements and daily care. While a health and welfare LPA is not directly related to your business operations, having a dual approach with both types of LPA provides more robust protection in time of crisis.

Effective communication strategies are crucial for implementing an LPA, ensuring family and stakeholders are informed of your plans. You will need to outline your wishes regarding the management of your farm, which can include instructions on crop rotation, livestock management, equipment maintenance, managing farm finances, paying suppliers, handling loans, making investments and succession planning. Directions on how the farm should be passed on to the next generation or managed in the long term are essential.

Developing a comprehensive crisis management plan

Ideally, an LPA should sit as part of a comprehensive crisis management plan, which addresses the broader range of potential risks to your business, such as natural disasters, disease outbreaks or market fluctuations. This plan should also identify key individuals and outline their roles in a crisis, and include a communications strategy so those individuals know who to contact and their responsibilities. Maintaining an emergency fund to cover unexpected expenses will also help to ensure that your business can continue operating during difficult times.

By taking these proactive steps, you can ensure that your farm or agricultural business is well-prepared for any eventuality. A well-crafted LPA and a robust crisis management plan will provide peace of mind and make sure your wishes are known so your business can continue to thrive, even in your absence. As your business evolves, so should your LPA and you should regularly review and update it to ensure it reflects your current wishes and business practices.

This article was first published in the May 2025 edition of South East Farmer.

This content is correct at time of publication