The Future of Your Farm
We often use the phrase “repeat, repeat, repeat” at AgCredit when we need to communicate an important message. Everyone may not fully grasp the significance of a message when heard only once or even twice. For many of us, it takes multiple times hearing something before we truly understand its importance. I bring up the need to “repeat, repeat and repeat,” because it has now been six months since AgCredit sponsored a series of transition planning workshops. Our Leader publication has featured a number of articles on the topic of farm transition and succession planning. In addition, many people have spent considerable time and resources over the past several months focusing to make 2018 a year to complete your plan. My goal with this message is to help keep you focused on the farm transition goals you are currently working on or intending to develop in 2018.
The goals of succession and transition planning vary for different farm families. The primary objective of transition planning is to put families on a path to accomplish their overall goals. A goal for some might be to make sure the business has the resources to continue for future generations. In another case, it might involve working to reduce family conflict to achieve an equitable distribution among the children. Whatever your goal, it takes a team of professionals to put a plan together. Ultimately, transition planning helps the family analyze its current situation, examine the future and then develop a plan of action.
What is the most significant challenge your farming operation faces?
A group of AgCredit young, beginning and small farmers answered this question on a recent survey and their highest rated response was: Transitioning the family farm to the next generation. This answer was not surprising because we have seen many family farms struggle in the area of transition planning. In fact, according to the United States Department of Agriculture, roughly 89% of today’s farmers do not have a transition plan in place. We see the consequences all too often when a family has not effectively communicated and invested appropriate time to create a transition plan.
Over the years, AgCredit has sponsored a variety of succession and estate planning meetings. These meetings included having excellent attorneys experienced in transition planning present and share information to consider when planning. Unfortunately, many attendees left with enthusiasm to act but their enthusiasm eroded shortly after the meeting and progress towards a plan fizzled. For others, the task seemed daunting and the important process of transition planning remained incomplete—jeopardizing the future of the farm.
Earlier this year we planned a four-pronged approach to get family farms more motivated about transition planning. We would like to encourage you to make 2018 the year to get goals and deadlines in place.
For the first prong, we engaged Dr. Ron Hanson, a retired agribusiness professor from the University of Nebraska, to kick off our Tools for Transition Workshop series at four locations. Dr. Hanson shared compelling stories about what can happen when succession planning does not get done. His talk was motivating, emotional and designed to get families to take the first step. He noted, “Many families fail to put a plan in place because personal obstacles and fears become roadblocks.” Dr. Hanson quoted Robert Herjavec, “A goal without a deadline is just a dream.” Hanson has counseled Nebraska farm families for 30+ years helping them resolve conflicts and improve family relations with better communication. During his time in Ohio, Hanson also spent time between meetings, talking one-on-one with farm families discussing their individual situations.
The second prong was a follow-up workshop with David Marrison and Emily Buxton Adams, of The Ohio State University Extension. They also presented at four different locations. They explained why many two-generation family business arrangements fail because of poor family communication and relationships. Their topic included a “how to” on having productive and positive conversations about challenging and difficult issues. Both David and Emily shared their The Future of Your Farm 4 | July 2018, AgCredit ACA own personal family stories related to transition planning and left us with many tips and suggested resources. Over 800 people attended our eight meetings on transition planning.
Our third prong is the ongoing collaboration between AgCredit and Nationwide’s Land as Your Legacy program. Land as Your Legacy provides a process to ensure your goals for the future of your operation become a reality. Land as Your Legacy provides a complete and comprehensive roadmap to guide you through the transition process. It helps families form their own team of legal and financial professionals when creating their plan. The process helps families think through the critical decisions important to transition planning. Your AgCredit account officer can help you become more familiar with the Land as Your Legacy program.
The transition planning process includes six steps outlined in the graphic. The first and second steps are crucial to developing the foundation for a successful farm transition plan to accomplish your goals. Once you know the first two things, you can analyze your options, select those that are best and implement them so you may accomplish your goals. In the end, no plan is perfect because things will always change and you and your family will need to review and update your plan as needed.
The fourth prong is to over-communicate the importance of farm transition and succession planning. We need to reach back out to everyone who attended and remind them of the importance of this effort and to “repeat, repeat, and repeat” our message. For those who attended a seminar, reading a reminder e-mail or this article might be the catalyst to get you moving forward with your plan. Sometimes we get busy working on mundane things and lose sight of the more important big picture. As you plan and strategize the future succession of your family farm operation do not forget to allocate time for needed strategic thinking. Your family’s business might be at stake.