There is just never enough of it, yet so much depends on setting time aside to think and plan for the future — farm transfers can be smooth or bring families to the verge of self destruction.
If Saskatchewan Agriculture, Food and Rural Revitalization’s (SAFRR’s) Lyle Darwent has learned one thing in his long career providing advice to producers in the province, it is that making time to talk about succession is as important as anything else in the business of agriculture.
“From the moment a farmer starts to acquire assets and build equity into their operation, questions about succession need to be asked,” Darwent says. “Farm families should start exploring how they will integrate their children in the operation as early as possible.”
Of course, even the best-laid plans may not come to fruition. Children may develop other career interests. But planning may contribute to engendering interest in a farming career as well, explains Darwent.
“Typically on a family farm, children may be invited by their parents to rent additional land or to buy some livestock. Parents are in a position to offer their kids the use of machinery and facilities to help them out. They may be willing to consider “sweat equity” as payment through a machinery-labour exchange.”
As parents get older, they no longer want to expand the farm. They pull back.
“The children will be more willing to invest in additional assets. Generally the farm size will have to increase if the goal is to develop a farm operation that will support two or three families, depending on the number of children who decide to farm.”
But succession planning also involves some serious psychological challenges, as well.
“There are three aspects that come into play. First, there is the ownership decision-making process for the operation. Then, there is the labour and management factor. A parent who has run the farm for years has a wealth of experience and wisdom. On the other hand, a child brings new ideas and a fresh look at the operation. It’s all good,” Darwent says.
But the third aspect is what makes or breaks the whole thing, according to Lyle Darwent. It is the human factor and it tends to get overlooked in succession planning.
“Very often, it is the mother who gets caught in the middle, for example, between a son and a father. In working toward a successful farm transfer, zero tolerance is nobody’s friend. Everyone must accept that there is more than one way of getting positive results. Sometimes parents find it difficult to accept that. Understandably so, because parents are employers and partners — and kids are employees and junior partners. All partners come with their own sets of values.”
In essence, the only way to address the issue in a meaningful way is to discuss everyone’s goals, and how they harmonize with the goals of the family as a whole. Sitting down and taking the time to discuss issues at length with a clear head is the only route to success. Darwent has this advice for those who face such a challenge:
“Look at successful farms in your area. Normally, family members and partners in these operations have learned to work together. And when families have gone through this process, they get a real sense of accomplishment when things work. On the other hand, when you see family farms break up, the efficiencies of the whole intact operation disappear. There is always a measure of sadness when that happens.”
If farm operators are serious about succession planning and are willing to invest in ensuring a smooth farm transfer, the new Federal-Provincial Renewal Program laid out in the Agricultural Policy Framework makes matching funds of up to $8,000 available under Specialized Business Planning Services (SBPS) through the Canadian Farm Business Advisory Services (CFBAS). The money can be used to hire a consultant to prepare for the future.
For more information, contact:
Lyle Darwent
Renewal Specialist
Saskatchewan Agriculture, Food and Rural Revitalization
(306) 446-7479
If Saskatchewan Agriculture, Food and Rural Revitalization’s (SAFRR’s) Lyle Darwent has learned one thing in his long career providing advice to producers in the province, it is that making time to talk about succession is as important as anything else in the business of agriculture.
“From the moment a farmer starts to acquire assets and build equity into their operation, questions about succession need to be asked,” Darwent says. “Farm families should start exploring how they will integrate their children in the operation as early as possible.”
Of course, even the best-laid plans may not come to fruition. Children may develop other career interests. But planning may contribute to engendering interest in a farming career as well, explains Darwent.
“Typically on a family farm, children may be invited by their parents to rent additional land or to buy some livestock. Parents are in a position to offer their kids the use of machinery and facilities to help them out. They may be willing to consider “sweat equity” as payment through a machinery-labour exchange.”
As parents get older, they no longer want to expand the farm. They pull back.
“The children will be more willing to invest in additional assets. Generally the farm size will have to increase if the goal is to develop a farm operation that will support two or three families, depending on the number of children who decide to farm.”
But succession planning also involves some serious psychological challenges, as well.
“There are three aspects that come into play. First, there is the ownership decision-making process for the operation. Then, there is the labour and management factor. A parent who has run the farm for years has a wealth of experience and wisdom. On the other hand, a child brings new ideas and a fresh look at the operation. It’s all good,” Darwent says.
But the third aspect is what makes or breaks the whole thing, according to Lyle Darwent. It is the human factor and it tends to get overlooked in succession planning.
“Very often, it is the mother who gets caught in the middle, for example, between a son and a father. In working toward a successful farm transfer, zero tolerance is nobody’s friend. Everyone must accept that there is more than one way of getting positive results. Sometimes parents find it difficult to accept that. Understandably so, because parents are employers and partners — and kids are employees and junior partners. All partners come with their own sets of values.”
In essence, the only way to address the issue in a meaningful way is to discuss everyone’s goals, and how they harmonize with the goals of the family as a whole. Sitting down and taking the time to discuss issues at length with a clear head is the only route to success. Darwent has this advice for those who face such a challenge:
“Look at successful farms in your area. Normally, family members and partners in these operations have learned to work together. And when families have gone through this process, they get a real sense of accomplishment when things work. On the other hand, when you see family farms break up, the efficiencies of the whole intact operation disappear. There is always a measure of sadness when that happens.”
If farm operators are serious about succession planning and are willing to invest in ensuring a smooth farm transfer, the new Federal-Provincial Renewal Program laid out in the Agricultural Policy Framework makes matching funds of up to $8,000 available under Specialized Business Planning Services (SBPS) through the Canadian Farm Business Advisory Services (CFBAS). The money can be used to hire a consultant to prepare for the future.
For more information, contact:
Lyle Darwent
Renewal Specialist
Saskatchewan Agriculture, Food and Rural Revitalization
(306) 446-7479
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