Getting Started on Handing Over the Family Farm
December 21, 2022 Handing the reigns of the family farm to another isn’t easy. Not only do you need to figure out the financials, you have to figure out how to step away from an all-consuming, life-long pursuit. How do you find an off-ramp? And how do you mentally let go of your life’s work? And how do you stop yourself from interfering with the next generation’s decisions?
That last one? It’s actually the most difficult one to figure out.
Family dynamics may be the most ignored topic in farm management. Even though vegetable operations are 99.9% privately/family owned, it’s not a topic overflowing at conferences or showing up often in articles.
Farmers are an independent lot. They’re used to figuring out any problem thrown at them. But family issues aren’t so easily addressed as a broken axle or diamondback moth invasion.
Years ago, I was asked to speak on succession planning. I checked in with a couple of family business experts, both who held advanced degrees in psychology as well as MBAs. They had some great advice, like getting neutral third parties to help negotiate terms of the official transfer.
But what I remember most from that talk was the second half, where audience members stood up to share their own stories. Tearful sons and daughters spoke of abusive parents trying to use the hand off as just another pain point. Angry parents talked about careless kids who say they want to take over but who showed no initiative.
One of the most interesting comments of the session was from a non-family employee caught in the crossfire. Dysfunctional families make life miserable for everyone in a family-owned business, including farms.
Not all transfers of power resemble something from the Jerry Springer Show, naturally. But even the most well-thought-out succession plan will have moments of drama.
RELATED CONTENT: Why Succession Planning on the Farm Is a Responsibility
What can you do to best ensure your farm and your children have a strong future? And if you’re the one taking over, how do you balance your growing authority with your parents’ experience and dominance of decades?
The first step is deceptively simple: Acknowledge to all involved that giving up/assuming power isn’t easy. In many families, it’s easier to keep trickier issues to yourself, to keep moving. But that won’t work in succession planning.
Starting with saying out loud what everyone knows will help diffuse tension and recognize everyone’s stake in moving power from one generation to another. That inherent respect can only make the coming debates and decisions more honest and frank.
Oh, One More Thing
When you look at the data on farmers at retirement age and how few have an exit plan, it highlights the urgent need for good succession planning. Take a look at just a few statistics that spell this out.
66% — Percent of farms with no formal succession plan in place.
Source: S.F. Conway et al, “Farm Succession and Retirement Across Continents and Cultures: A Focus on Ireland and Iowa.”
57.5 years — Average age of all U.S. farm producers. This is up 1.2 years from the previous USDA Census of Agriculture in 2012.
20% — Percent of Iowa farmers who plan to never retire, compared to 23% who fully plan to retire. The majority plan to semi-retire.
Source: S.F. Conway et al., “Farm Succession and Retirement Across Continents and Cultures: A Focus on Ireland and Iowa.”
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