October 5, 2009

Late in August, I attended the 2009 International Succession Conference in Quebec City. Why would I leave the farm when the harvest was just beginning? In order to get more tools and ideas to help farm families work through the tough issues of transferring the farm to the next generation.

Here’s a cornucopia of gleanings from my experience :

“You are no longer self-sufficient in a complex world..” says ag. economist Daniel Mercier Gouin. Dr. Gouin emphasized that a good manager will try to control for debt load, will be continually getting more education, and will seek out advisory services. It’s the management that makes the difference on the farm. “DNCE” means “do not cover their expenses.” If you are in the 28% of Canadian farms that are DNCE, you need to act to change that scenario.
Translation: Many farm folks have had a disastrous year with markets, poor crops, and crushing debt. Don’t suffer alone, seek out debt servicing options, financial analysis of where you are really at, and don’t be afraid to ask for help. You may want to consider voluntary mediation with the Farm Debt Mediation Service. ( call 1-866-452-5556 ).

“Thirty percent of new farms in France are managed by people who are not from the farm,” says Edouard de Sainte Marysville. France has a very strategic plan to help young people start farming. Older farmers are encouraged to rent houses and buildings to encourage the installation of younger farmers. Sellers are listed on the web to create linkages between buyers and sellers. There is lots of mentoring using viable plans and skills training. When a young farmer needs to leave the farm for training, there are relief workers available to do the farm work.
Translation: What are you doing to mentor the next generation of farmers? Will you be positive and thankful for the opportunities you see in agriculture? Will you move off the home place to let the new manager test out his/her skills and have more control? Would you consider a non-family member to be your new business partner?

FCC’s Farm transfer workshops are now open to anyone wanting to learn how to be a better farm manager. Go to or call 1-888-332-3301 to find the entire list of workshops. This is a great opportunity, registration is free, to improve your management skills and have a forum to talk with other farmers.
Translation: Farmers need to be life-long learners. What do you need to learn this winter?

“Many farm families are hoping for continuity of the farm, and this hope of continuity gives their life meaning,” says Caroline Collard and Brigette Pare. These Quebecois women have worked very intensely with many farm families to find the tools of transfer success. The driving force of “keeping the farm intact”, farm continuity is very important to many and is sometimes unspoken. They see success involving:
-common vision
-new owners are identified and trained
-there is much dialogue
-shared decision making
-respect is mutual
-leaving and “letting go” is done well by the founders.
Translation: Communication is the big factor in farm transfer. You need to share the passion and a common vision with mutual respect. The non-business family members need to be part of the discussion. Decision-making must be shared. The average age of producers is increasing and their rate of replacement is declining. Hence, you better figure out fast how you are going to make the transfer of ownership a successful process.

“Don’t forget to think about the time value of money” said Bill Brown, from the University of Saskatchewan. Often the parents don’t know their real family living expenses, and when it comes time to move off the home place, there are little to no savings or investments to support the new lifestyle. Brown stressed that there needs to be revenue planning and diversification of investments. Do you realize that 1/3 of Canadians age 55-64 have no RRSP or pension?
Translation: Are you saving now? Realize that the earlier you set up a savings plan, the more time you have for money to work for you. Do you have a financial planner on your advisory team as part of your succession process? This needs to be started decades before the actual transfer is to take place. If you think Mom and Dad are being stubborn about making the transition to a new lifestyle, have you considered that they are afraid they don’t have enough money to move to town or Arizona or change? As a young farmer have you thought about non-farm investments, tracking your living costs, and using a financial planner? Consider that 50% of retirement income streams should come from non-farm sources.

Action steps:
1. Celebrate Thanksgiving with a grateful heart. Being a farm family makes you very special entrepreneurs and only 2% of the Canadian population.
2. Communicate in a family business meeting, not around the turkey, but in a separate venue, about your learning plan for shared decision-making about the future.
3. Keep track of family living expenses this fall and winter, interview financial planners.
4. Reflect on what gives your life meaning and purpose. Passionate farmers are more profitable. Great managers make the difference.

C’est toute pour maintenant. That’s all for now. I’ll bring more news about my gleanings in future columns. Share your succession stories with me at

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Shannon Gilchrist, “Get Farm Transition Unstuck” online course participant
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