by: Amanda Douridas, Extension Educator
Around this time last year, I had the opportunity to travel to Tasmania to attend and present at the International Farm Management Congress. During one of the tours, we were able to meet with 3 farms who have implemented very successful succession plans. Farm transition is a struggle for many farms not only in the U.S. but across the globe. It was interesting to see the generation in their 30s and 40s as the primary managers of the farm with their parents stepping down in their 50s and 60s (but still working as much as they want to).
At one farm, the older generation decided to become more of an employee showing up at work every day at 7:30 a.m. and taking a wage. He and his 33 year old son still very much talked and discussed the future of the business daily but his son ultimately made the decisions. Another advantage to developing the succession plan at an early stage was most children did not have significant others involved yet, which can be a cause for contention in some cases.
In each instance, on and off-farm children knew where they stood within the operation and were better able to plan for their future. This is crucial for the younger farming generation especially. They know the future of the farm is secure and are able to expand or change to fit their family’s needs.
Another common denominator in the younger generation is nearly all spent 5-10 years working outside of the operation after school. Many worked on another farm or in the agriculture industry gaining valuable ideas and insights to bring back to the farm.
One farmer gave 4 rules for succession planning:
- Set a timeline for the plan to be finalized.
- Appoint someone outside the family as a mediator.
- Everyone needs to come to the table in a conciliatory state of mind.
- Start thinking about what you will do for the rest of your life.
The next generation is likely to have a different management style. That does not make it right or wrong. The older generation received the farm at a young age themselves and were able to keep that going with their children.
Lastly, have a retirement party to thank the businesses you’ve worked with and show them the next generation is in charge. This will notify salesmen that they need to stop calling you and allows the next gen to handle business partners in a way that fits the future of the operation.
There is a video available on Youtube featuring one of the families is available at: https://www.youtube.com/watch?v=gIKpne_VSbU&feature=youtu.be