Getting started on farm transition

The presentation is broken down into four sections. This includes knowing your role, a training plan, retirement income need and communication.

“In farming you wear many hats. When there’s a new person coming into the operation, especially when the senior partner has been ‘master of all’ and doing all of these these various roles, trying to figure out where you fit, it’s a big deal.” she said.

Durand did a live poll during the presentation asking everyone what their current role is on their farm. She said it wasn’t a surprise that most didn’t know.

“They had a spectrum of options. One of the answers was, ‘I do what I’m told’. Forty per cent of the young farmers in the room picked that as their answer. They’re really not sure what their role is. They want to be respectful and they want to learn, but they are unclear what it’s going to take in order to get up to that senior management level. My challenge to them is to figure it out and have a conversation.”

Preparing for a transition also means making sure the successors know their role on the farm because of the shift from a parent-child relationship to a business partnership, and to employer-employee partnership.

“Two to three years off farm can really build something. It’s also just other training pieces. Are you best to get this training on farm or off farm? Is your senior partner going to be best to instruct you on how to do these things? Or is a third party going to give you some fresh eyes and introduce some new ideas that actually will improve the farm operation as a whole,” she said.

The senior member of the farming operation has worked hard to build the operation and wants to see it continue successfully. But there is the fear of what’s going to happen to them. That’s when a retirement plan becomes a key component. But retirement should also be on the mind of the young farmer.

“For the junior partners it may strike them as a bit funny. Why should they talk about retirement? The reality in most farms is that there are not a lot of savings, outside of the farming operation; that is their investment. The senior partners need to be really clear about what their needs are for retirement, because that’s going to become a debt obligation to the farm. The incoming partner needs to understand and know what their parents need, and think about what that might look like in terms of covering those expenses. “

Durand said having respect of the senior partners was important as they’re going to continue to have risk because they’re depending on the farm for the rest of their lives. She said there may be some reluctance because they have a lot on the line and a lot to lose.

Communication is a key component of any transition plan. Durand said it doesn’t happen by accident. She suggested having scheduled conversations.

“I’m not talking about something formal, just head to the workshop. A whiteboard is one of my favorite tools. Put down on the board what your priorities are, who’s taking care of what, and when those are done, what’s going to be the second, third or fourth priority,” she said. “There’s clarity about what everybody is doing and why they’re doing it. Let’s intentionally set this up so everybody has a voice at the table. If you can’t talk about the little stuff, I promise you, the big stuff is going to feel impossible.”

Durand said the sooner you begin the process the more options you have to pick from. Not addressing those concerns narrows down your choices.

“Even baby steps are a move forward,” she said.

“The Farm Credit Canada YouTube channel has a series of videos called Focused on Farm Transition. These five to 10 minute clips have tips you can do yourself to get the ball rolling and start making some progress in your own transition,” Durand said. “I really encourage everybody to go have a look and give us some feedback.”

–

alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF

by Alice McFarlane

Getting started on farm transition

What's Trending