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Dealing with Retiring Farmers to Create Landlord Relationships

I am extremely grateful for the 3 neighbours who showed up with 3 extra combines to harvest on the last sunny Saturday of September; it really made a huge difference in reducing the stress on our farm. When I relayed this story to an easterner, he said, “Wow, they still do that out there! Neighbours here are so competitive for land; that never happens anymore!”

So, are you cultivating harmonious relationships with the landowners next door, or are you just hoping they will read your mind and know what your farm vision is for expanding your land base with your successor?

How are you doing with “landowner relationships”?

Some pro-active farmers are doing a “retiring producer needs assessment” with older farmers and planting the seeds of an ongoing conversation. They ask questions about the $ /year income stream that is needed, if there is a plan in place, and whether or not the farmer has an “exit plan.” Retiring farmers are typically really concerned that they know they should have a plan to exit, but in reality there is no plan. Sometimes this conversation can last 5 years. This is not a “hostile takeover” kind of talk, but one lead by the aging farmer, with grace and respect.

Are you working at introducing your successor to the landowners that you deal with? Farmers like to know who is going to be caring for their land, and they want great stewards to farm their land well. The retiring farmer also wants to do business with someone who is transparent, honest, trustworthy, and pays their bills on time. The renter also wants to make sure that the landowners feel like they are “well taken care of.”

Do you know who your “best prospects” are to rent or buy land from? Some keener negotiators are talking to their best prospects at least monthly. They are “talking to them every chance they get, and also trying to create chances to talk with them!” This is relationship selling, mostly done on the phone, sometimes by text. The aging farmers at community meetings for the school, curling club, fair, 4-H, farm groups, and church are also not left unnoticed.

Cautions:

  • Be sensitive to what the aging landowner is going through. Some folks do not want their land to change hands until they die.
  • Pick the right “tailgate time” to have a casual conversation about the farmer’s future plans for the land. This is not community news; this is a confidential talk.
  • Custom working the land gives you an opportunity to show how well you farm and care for the earth.
  • See if there are economic enticements such as helping the aging farmer sell some of his equipment or get it ready for auction.
  • Consider finder’s fees for those folks who understand the relationship selling process who can give you workable referrals.
  • Beware of people “pretending” to be deal makers when they really don’t want to have conversations about renting or selling. Be sure that the farmer has the ability to make a rental or sale decision.

Process:

  1. Start with a list of prospects with whom you would like to form relationships. Good solid relationships with retiring farmers may take years to build.
  2. Help solve the retiring farmer’s problems by selling outdated equipment, do custom work for them. Preface your comments with “when you feel ready to retire…”
  3. Have your agreements in writing. (I recall a farm family with many elderly landowners who didn’t like paper contracts, but the new generation of young farmers made written agreements a condition of renting, clearly just their business policy.)
  4. Make sure you have all the substantial conversations with all the important decision makers present at the same time.
  5. Set the expectations ahead of time for the assessment survey, “I’d like to ask you a set of questions that may sound “hokey” but they are important for all of us to be clear about what everyone needs out of this land rent process.” The assessment survey is created by the buyer/renter to get a clear understanding of what the retiring farmer needs.
  6. Look inside yourself. Are you a good manager? Do you have great management capability and empathy with a heart to care about your neighbour’s well-being? Sometimes an outside advisor like an accountant or agronomist may have the facilitation skills to bring the interested parties together for a “social” discussion of the possibilities. This works if the parties have similar values and can say “I like the way you think, you think like I think.” When the terms of agreement are put together, seek out separate legal counsel and get the deal done.

Many retiring farmers are happy when they know they have put their land into the care of good hands. Some exiting dads take a salary for five years and are happy to be driving equipment in the busy times of spring and fall. Other retiring farmers may take on the role of “landlord relations” for the farm team.

Some folks are so attached to their land and their “iron” that they are not capable of letting go or making new agreements with new tenants or owners. There is a huge issue in agricultural circles with “avoidance behavior,” so if the fellow that you want to buy or rent land from crosses the street when you approach, you likely have damaged the trust relationship.

Here’s some homework for the winter months:

  • What is the vision for your farm growth for the next 3 years?
  • What is your REAL net worth?
  • If you are planning to exit farming, have you done your tax planning?
  • What is your life going to be like when you are no longer the main farm manager?
  • Which neighbours do I want to continue building a relationship with because I truly care about their total well-being? (not just their land!)

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Annessa Good, FCC Transition Specialist, Alberta
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Audience Member,
“I attended the meeting you spoke at in Stratford Ontario recently. We held an emergency family/farm meeting today because of issues that I had enough of. We used a 'talking stick' like you recommended and wrote a chart of rules. The rest of the family thought the idea that we needed a meeting was worth rolling their eyes over, until we got started. The younger ones were quick to clue in that they now have an opportunity to be bluntly honest. The older ones took a bit longer to believe they could truly say what they think. In the end, the meeting needed two sessions because there was so much to talk about… and so many things people didn't realize were a big deal to the others. Your lessons and encouragement have given us the tools we need to get to a better place in our relationships and our business. Truly thankful.”
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Ashley Hoppe, Farm Partner
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Don Forbes, Forbes Wealthy Management
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Megan, BC Rancher
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Shannon Gilchrist, “Get Farm Transition Unstuck” online course participant
“My hubby farms with 2 brothers and parents, and it’s become a really toxic place. No communication, no respect, etc. Twelve months ago, my husband’s brothers told him they don’t want to work with him anymore and offered him a pay out. His parents did nothing to stop it! He had no choice but to leave. Three months later, we moved off the farm and into town. He has been offered heaps of jobs and is now truck driving and carting hay and grain. We have tried communicating with his parents about what happened but they are not interested. So basically my hubby has lost his family. Very sad but we as husband and wife are overall in a good place and moving on to create our own life. Please continue on with all your wonderful work in helping families on the farm. I continue to tell any farmers I know about you, that they must ‘google’ you, and read your books.”
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