By Marius Pentz, Cape Regional Head for FNB Private Bank & Advisory
For farming families in the Western Cape, the business represents much more than land, equipment and an income stream. The majority of farms carry a family name, a reputation built over decades, long-standing relationships with employees and customers, hard-won knowledge of soils, seasons and markets, and often a deep sense of responsibility to the next generation.
A common mistake is to think of legacy preservation as protecting the farm from change. In reality, farming families are often making decisions that affect not only the business, but also family wealth, future generations and the relationships that hold everything together. Building a legacy therefore requires more than preserving what exists today. It requires thoughtful planning and advice that helps families adapt, grow and remain relevant in a very different environment from the one in which previous generations operated.
That is becoming increasingly important across the Cape’s agricultural economy as global influences and shifting weather patterns change the operating environment. Wine estates must now balance heritage and brand reputation with changing consumer preferences, new routes to market and margin pressure. Fruit producers face a fast-changing export environment while working over long investment horizons. And livestock and dairy farms face growing operational pressures around devastating animal disease outbreaks, soaring input costs, security and theft, and failing public infrastructure.
While the challenges may be different, the common thread is that long-term resilience and legacy creation demand that farmers look at the family, the business and the wealth it creates as parts of an interconnected whole.
The starting point is to build resilience beyond the next season. Farming families are accustomed to uncertainty, but the range of risks they face has become broader. A resilient family enterprise therefore needs appropriate liquidity, sensible debt levels, suitable risk protection, which includes healthy levels of diversification, and a clear view of where capital should be deployed.
All these also need to take the wider family position into account, including personal wealth, retirement needs and how concentrated the family’s financial security is in the farming business. This is often where objective advice becomes valuable, helping families consider decisions through both a business and personal lens rather than addressing challenges in isolation.
Strong farming families plan not only for a difficult season, but for a series of difficult events without compromising their long-term options. Resilience should also never be confused with defensiveness. Strong family enterprises identify where future growth will come from and understand that wealth preservation and growth are not opposing objectives. The aim is to make deliberate decisions about where the family takes risk, where it protects capital and how both support the long-term sustainability of the enterprise.
Good governance becomes especially important as the family and business grow more complex. A family member, shareholder and farm manager perform different roles – even when the same person fulfils all three. Those roles need to be clearly defined, with agreement on responsibilities, major investment decisions and how differing family interests are managed. Ownership and management also need to be separated, as not every shareholder needs to work in the business and not every family member is the right person to lead it. When done well, governance protects family relationships by reducing ambiguity and providing a clear path for difficult decisions before they need to be made under pressure.
Succession is a core component of this broader governance approach, but planning should begin long before ownership or leadership is transferred. In agriculture, some of the most valuable assets are not recorded on a balance sheet. Knowledge of a farm, cultivar or herd may have been developed over decades, while important relationships and judgment built through difficult conditions often sit with the current leadership. These assets can be difficult to transfer if they have not been shared deliberately.
That makes preparing the next generation for farming success a process, not an event. Future leaders need exposure to financial and strategic decisions, meaningful responsibility and an understanding of how the business creates value. They also need opportunities to develop their own expertise and, where appropriate, gain experience beyond the family enterprise. Ownership is easy to transfer on paper, but real stewardship has to be learned over time.
Preserving the farming business also does not require every member of the next generation to depend financially on it. Family wealth is often concentrated in land, operating companies and infrastructure, creating pressure when some family members want to farm and others want greater financial independence. Diversifying part of that wealth, planning for estate liquidity and structuring ownership carefully can create flexibility and reduce the risk of business decisions being driven by individual family members’ immediate financial needs.
None of these generational planning decisions are ever purely banking, legal, tax, investment or agricultural matters. In farming families, they are closely interconnected with choices in one area often affecting several others. This is why the most effective advice is rarely delivered in isolation. It comes from trusted relationships that develop an understanding of the family, the business and their long-term aspirations, while drawing on specialist expertise across wealth, fiduciary and sector disciplines.
The value of that advice lies not only in solving individual problems, but in helping the family make decisions that support the resilience of the business, preserve the wealth it has created and prepare the next generation to take responsibility for it.
Ultimately, the goal should not simply be to hand an intact farm to the next generation. It should be to hand them a resilient enterprise, strong governance, sound relationships and the clarity to make confident decisions of their own. The strongest farming legacies are not preserved by standing still, but by preparing each generation to build on what came before.
At FNB Private Bank & Advisory we understand that a business owner and entrepreneur look for a Private Advisor who understands their business, challenge their thinking, connects them to opportunities, and helps them to navigate complexity. That is why we have become that Trusted Advisor – through day-to-day lifestyle activities to significant life events helping our clients grow and protect their Wealth.
