Rabobank Warns of Massive $150b Wealth Transfer in NZ Farming Sector

A new report by Rabobank warns that New Zealand's 17,000+ farm and orchard owners, mostly nearing retirement age, must make succession plans to manage the transfer of $150 billion in assets over the next decade. The report highlights the importance of preparing for the largest-ever intergenerational transfer of wealth.

A new report by Rabobank highlights a pressing issue in New Zealand's agricultural sector: the lack of succession plans among farmers and orchard growers nearing retirement. With an estimated 17,300 owners, about half of the national total, set to retire by 2035, the report underscores the urgency of preparing for the largest-ever intergenerational transfer of wealth in the country's history [1].

According to the report, only 33% of farmers and orchard growers have a documented succession plan in place, while a further 17% have discussed the topic but lack a formal plan. This leaves 50% with no succession plan at all, raising concerns about the future of the industry. The traditional model of passing the farm to the next generation is under pressure due to high entry costs and the financial constraints associated with taking over the business [1].

The report, prepared with Waikato University, surveyed 450 farms and found that high entry prices and financial constraints were the most significant challenges for succession, cited by one-third of respondents. Additionally, 22% stated that the industry's attractiveness to the next generation was declining. This trend is evident in the aging demographics of farm owners, with fewer than 20% of owners under 40 in 2023, down from over 30% in 1996, and nearly 25% aged 65 or older [1].

The lack of succession plans could lead to farms being converted into forest plantations or other alternative uses, potentially reducing production in an industry that is a cornerstone of New Zealand's export-led economy. The alternative to family inheritance is usually an outright sale to new entrants, often existing employees or neighbors, or to developers proposing alternative land use, such as forestry or residential development [1].

Rabobank estimates that NZ$150 billion ($90 billion) of rural assets will need new owners over the next decade, highlighting the need for immediate action. The report suggests that addressing the succession issue could help maintain the industry's productivity and ensure the continued success of New Zealand's agricultural sector.

References:
[1] https://www.bloomberg.com/news/articles/2025-06-24/new-zealand-farmers-lack-succession-plan-as-debt-spooks-children