There’s no denying that farming is a string of tough decisions, from managing finances, inputs, and equipment, to deciding rotations, and managing pests and disease. However, something that perhaps takes the cake for difficult decisions and conversations is farm succession as a whole.
Not only are there big business decisions to be made when developing a succession plan, but in many cases there is also a very emotional side, as family dynamics adds another layer to the complexity of the planning and adoption of the farm future.
Elaine Froese, a farm family transition expert based out of Manitoba, refers to these two aspects of farm succession as the farm business and the farm family, and says it’s important to not only make the distinction, but to plan for both.
Through her numerous years of working with family farms, she has identified some of the sticking points, or barriers, that can delay or derail a smooth transition of the farming operation.
Financial transparency is a major key to having all parties on the same page when it comes to the farm business, she says. Not only does this allow the farm successors to make decisions on how much debt they are willing to take on and what the farm and their personal finances look moving forward, but also for the founders to be able to take a hard look at both the farm and their personal finances as well. Froese says its not uncommon for the farm founders, or older generation, to have the vast majority of their finances wrapped up in the farm without a ton of thought put into their personal finances and no real plan for retirement once they are not one with the farm.
Wrapped up in that conversation is also the underlying tone of fairness. What is fair for each side, and not only each side of the succession, but Froese says often times as well, non-farm kids — those who are not taking over the operation of the farm — may also have an opinion on how the finances are divided. It’s the willingness and ability for all parties to sit down, say what they want, think is fair, and compare that against where the finances are now, that will be able to set the transition up for success, or at least an understanding from all sides. (Story continues below the interview)
Another barrier that can contribute to turmoil, according to Froese, is each individual’s money mindset: money scarcity or money abundance. Having differing mindsets can undoubtedly cause havoc when deciding the future of the farm, where one side is perhaps more apt to spending money than the other.
Froese says the unwillingness to have these and many other conversations regarding the future of the farming operation, stems in large part from wanting to avoid conflict, which, when your personal and work life are so intimately intermingled, is understandable. However, avoidance is almost guaranteed to not solve any issues nor set the farm up for success down the road. Therefore, at some point, it is highly likely these conversations will be had and if each side can get out ahead of it mentally, organizing their wants and needs with an open mind and respect for the other side, the almost unavoidable conversations stand to fare much better than if they are had off-the-cuff.
To be able to break the issues down and to reveal some of the barriers in a version of point form isn’t to insinuate that this process is easy, or simple. There can be multiple layers to any one topic, but to be able to identify where the issues are, which are more often than not rooted in communication, allows each side to then choose to move towards a solution or persist in the problem.