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Transition trade-offs

Agriculture.com Staff 02/11/2009 @ 6:58am

By American standards, Erich Decker is sitting pretty. The 23-year-old Austrian farmer is poised to take over his family's seven-generation farm entirely by the time he's 40. If he and his parents stay the course, the pig and pumpkin operation he is to inherit will be debt-free when it's time for him to take the reins.

"We have invested 350,000 euros (about $443,000 U.S. dollars) in the farm over the past decade. That debt will be paid off in 2009. We'll then take out a loan for 300,000 euros (about $380,000 U.S. dollars), which should be eliminated in 10 years," says Erich.

And while he may seem young and his future is set, the transition has stipulations -- both educational and legal -- that Erich must meet.

A graduate of Austria's Master Farmer program, Erich has been required to spend the last six years preparing to continue the family's heritage -- three years in high school and three years in the Master Farmer program. After graduating in 2007, he returned to the farm in the village of Hurch (near Halbenrain).

With the education portion complete, his parents, Alois and Monika, began taking the necessary legal steps to ensure their son will be the sole owner of their 47-hectare (about 116 acres) farm once they retire.

Currently set up as a company, Erich's parents own the farm and he works for them. However, he's not treated as an employee but as an equal partner.

While none of the family members draws a wage, each has the authority to draw money from the company's bank account for expenses like food and clothing. In addition, Erich built his first home, which was completed in December 2008. Funds to build it were taken out of the company.

"It's basically an honor system. Small expenses aren't discussed, but if we have big-ticket items, we sit down and talk about those purchases, such as constructing my house," Erich says.

By American standards, Erich Decker is sitting pretty. The 23-year-old Austrian farmer is poised to take over his family's seven-generation farm entirely by the time he's 40. If he and his parents stay the course, the pig and pumpkin operation he is to inherit will be debt-free when it's time for him to take the reins.

Since Erich will be gifted the company once his mother turns 60 and his father turns 65 and won't have to pay any inheritance taxes, there is an unwritten rule that he must honor.

In Austria, farmers are only required to keep records if their operation exceeds 300,000 euros annually. The Deckers fall short of that threshold (also called the border) and point to several advantages to staying under that figure.

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