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Late last year, I decided to stop listening to sad farm transition stories, proposing a new hashtag for Twitter: #healingstories4ag. Here is one example I read from a farm survey respondent. 

Succession planning would be considerably less difficult if the long-term stability of the agricultural industry was more predictable. Given the current hurdles, long-term profitability is very uncertain! I do not wish to transfer an operation that has a low chance to succeed.”

This mindset is the reality of a farmer who has lost hope. Without hope and good cash flow, you are hooped! So, let’s look at what you can control, and think about for passing on the farm to the next generation. 

[Tweet “Successful #farm transition is possible with #planning and the right #mindset! My latest blog post is a must-read for #farmers who have been procrastinating and their #successors who are ready to get the ball rolling:”]

A successful farmer confessed to me he is afraid that if he gets sick in this difficult time he’ll leave his family in chaos, as he does not feel prepared to manage risk. Block some time this summer to talk to your family about their expectations about farm transition. At BDO, with the Business Transition team, I am working to help farm families do planning by working digitally. That means you can decrease your anxiety over the uncertainty of your future as you get clarity of expectations! Email me at elaine@elainefroese.com for a discovery call. You can do this!

Creating a Positive Farm Transition Mindset

Developing the right mindset for a farm transition often requires you to think about it differently. Yes, farmers are indeed living longer. And farmland is expensive. And the farm business is complex. Because of these things, farmers may avoid farm transition planning entirely, instead of asking the question about how it may be successfully accomplished. My colleagues in Business Transition services at BDO, Brent VanParys, and Brian Huck have drilled down the essence of this question into risk, choice, and opportunity.

Evaluate the Risk

risk image

When things are “not predictable,” you have to manage risk. The risk I deal with is the family system, the clarity of expectations, certainty of timelines on agreements, and a commitment to act on the family’s values and vision for the farm. This is big picture thinking.  

VanParys and Huck are experts in finding strategies to meet the challenges of risk in the business circle, the farm that needs to be more profitable, supports more than one family, and increases profit and efficiency. When you evaluate the risks, you, too, can think of effective ways to manage those risks.

cashflow risk

Assess Your Choices

After dealing with strategies to manage risk, you also want to be able to enact the choices you make. People who are highly stressed do not feel they have a choice. The choice is also limited when there is no profit, tight margins, and a lack of cash flow to service debt. Again, the reality check is seeking out options for improvement of revenue or choosing to liquidate assets. You need to hire farm management advisors to assess how to improve your financial state or face the facts of poor debt capacity.

Your personal wealth bubble is also a choice. Have you put all cash back into the farm over the years, and have no “retirement funds” other than selling pieces of the farm business? Sadly this is the case for many folks I meet. 

Having a low chance of succeeding sounds hopeless. What is your definition of success? My definition of finding fairness in farm transition is helping everyone be successful.  Helping the non-farm heirs is workable when you can draw funds from your personal wealth and leave farm assets for the business successor to grow more wealth.

Ask: Where’s the Burden?

Many cash-strapped farmers want to please the legacy expectations of their grandparents, and continue the farm to the next generation, just to say that it continues on as granddad had hoped it would. This becomes foolish thinking when young farmers are working as slaves with “below minimum wage compensation” all because they want to give their children a chance to farm. Newsflash: You need a decent income to support a family. You also need disposable income to service debt. 

You can use your agricultural skills and love of the land to be a professional farm worker for a farm that pays well, gives benefits, and may offer a joint venture opportunity to you, even employee share option plans! The burden is being expected to farm even when it threatens the health of your marriage, your own health, and the future financial opportunities for your children. Where is it written that you are a failure if you leave a non-profitable business to be compensated well for your skills and passion?

Ask: Where’s the Blessing? Where’s the Opportunity?

Farm transition planning image

The blessing comes when all parties, all generations, are aligned with the vision and the values of the family. This is like starting at the top of a huge funnel (picture a Princess Auto tin oil funnel), gathering the hopes and dreams of each generation on the farm, and those who have left the farm for other careers. You work on the business plan for the farm based on the skill sets of the team players, the financial balance sheets, and work out strategies to meet each challenge. As the ideas flow down through the funnel, then you look to tax considerations, and make the best plans for 2020 based on current rules and regulations, using the wisdom of tax specialists who have seen many different farm scenarios and can help you figure out opportunities. Tax is not at the top of the plan; it’s more towards the end!

The risk is not acting. Farm transition planning is about the transfer of labour (well-paid), management (timely transition based on skill, not birth-order), and ownership (which can be done in stages.) 

If you are buying into the lie that, “You can’t change people who don’t want to change,” then you likely already have your answer. It’s time to choose another farm or agricultural business to share your skillset with.

Procrastination and conflict avoidance are killing agriculture. Farm transition planning is not estate planning. When you make a will, that does not mean that you are going to die.

Young farmers need to do their research to find out how much debt their current personal net worth will service.  Visit the FCC and learn about their transition suite loans. Be empowered by keeping track of your basic living needs and stop buying fancy pick–up trucks that don’t make you money! Figure out good debt versus poor debt choices.

If you feel that farming is inaccessible to you due to high land values, watch my video Finding Fairness in Farm Transition on YouTube.

Many farms are not selling farmland to fund the founder’s retirement. Land purchases are happening from non-family opportunities. Others are in joint ventures with non-family.

If you are the farmer who says, “I find this topic overwhelming because it is my retirement and our son’s future, and we want to do it right,” give your head a shake.

You look at the challenges, you create solutions, and you go on the journey with great advisors. Stop being afraid of getting it wrong. Start researching, talking, and acting. You can afford to have family meetings to get this going! The key to a successful farm transition is beginning early—with the right mindset.

Rave reviews

“A joy to work with, heard loud and clear. When the farmers laughed or asked a great question, I knew they were listening and really wanted to learn from her. Her tips were easy to understand. It was just about understanding that conflict happens, and to have the confidence in yourself to ask for what you want. In the glowing review from farmers after her presentation, I knew they had heard that loud and clear.”
Maddy Berner, Event Planner & Communications Coordinator, National Milk Producers Federation National Milk Producers Federation
“I wanted to say a HUGE thank you for your virtual kitchen table chat with Arlan Academy. My wife and I signed up as it was exceptionally relevant to our current journey with potentially transitioning to her parents’ farm. The session was able to cover so many aspects of these crucial conversations and hearing you speak to both sides of the conversation was eye opening for my own perspective on this topic. It seemed to be very well attended and sounded like there were many other people who would echo my thoughts and feelings on it.”
N. Oakley, Farmer, Ontario
“Elaine helped me allocate $1 Million of assets the night I listened to her. Elaine’s presentation brings value to the use of my services in my office.”
Don Forbes, Forbes Wealth Management
“I recently joined in and listened to your Healthy Farmer Agriwebinar for FMC. I truly enjoyed hearing your perspective and even went and grabbed my Mom, away from her work, to come and listen in on some of your main points as well! One area that really stood out for me, both personally with our own succession plans and with our clients, was your discussion involving "Instant Influence" and how ready are you to change? I loved this concept!”
Annessa Good, FCC Transition Specialist, Alberta
“Elaine Froese truly is the Farm Whisperer. With her big heart and stern resolve, she guides families through uncharted waters and helps them arrive safely at their desired destination. She has been there, done that, and has helped hundreds of families come out on the other side. With your family and your farm legacy on the line, you owe it to yourself to start this conversation. You do not need to do it alone. Let Elaine Froese guide you through. Your legacy is being written day by day. How will you be remembered?”
Tracy Brunet, Host of The Impact Farming Show & CEO of Farm Marketer
“You speak like you’ve been sitting at our kitchen table! You know our family issues well. I am feeling more comfortable understanding what we now need to do. Elaine Froese is real.”
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.”
Kim Martin, Dairy Farmer, Ontario
“Helped me develop my framework to start having constructive and meaningful conversations around the farm.”
Tennille Wakefield, Farm Partner
“Some great lessons, Elaine! You continue to do some remarkable and potentially life-changing work.”
James Mitchell, Principal, Conversations Consulting
“Our family had a good farm meeting yesterday afternoon. Your Fairness video was a great topic of discussion. One of the action items after the meeting was to have my two non-farming siblings watch the video before the next big meeting they are involved with on the farm. It will be a great conversation starter as we catch them up on our current plan. As they are younger, we also hope it will help them to ask new questions that may not have been on their mind.”
G.G., Farm Family Legacy Coach, Alberta
“Elaine gives me excellent tools that help me work with my clients!”
Laurianne Osmack, Financial Planner / Partner, Doell Osmak Wealth Management
“She has a sense of “knowing” quickly what is happening in the family dynamic. Her messages to her audiences drive home what needs to be done next to solve the complex issues of farm transition and conflict resolution.”
Audience Member,
“Eye-opening. Excited to open the door of communication with my spouse and farm family.”
Ashley Hoppe, Farm Partner
“The Strong Farms, Strong Families session gave farm families an opportunity to meet face to face with Elaine Froese... hear her own story, experiences and skill set. From this information packed session and related materials, families could identify areas of success in their journey and other places they need assistance. The greatest take away was that participants could see that Elaine Froese is someone they can trust with the things that they hold most precious.... their family and their farm.”
Nancy Atkinson, Nobleford Ag Society, Alberta
“Elaine’s real-life scenarios help her audiences know they are not alone, knowing there are creative solutions to help them get the life on the farm they have always wanted.”
Audience Member,
“A long time female client who had refined the art of procrastination was so moved by the end of your presentation that she accepted your permission to “drop the bananas.” She contacted me soon after for an appointment to do some planning which included the selling of the family “Century Farm.” A very, very emotional decision on her part that was not likely to have occurred without your presentation.”
Don Forbes, Forbes Wealthy Management
“I just have to say… that your work is amazing and I have never forgotten your teachings from our session in Williams Lake at TRU. It is super important work. I know so many people going through the trauma of succession. I hate to use that word, but I was an “out-law” and know it can get terrible. I continue to forward your emails on to others. Keep doing what you do! You are amazing. You kind of walk into the fire regularly… and with a smile. Proud to have met you.”
Megan, BC Rancher
“As my husband and I eagerly started the course we were optimistic and excited to be taking this next step in our Farm Transition. We were starting to question ourselves and whether or not we were just being selfish and greedy, and if this Farm Transition was still an option for us. We barely got through the first Module and were already having such a huge relief. As we moved through the modulus there were so many times that we just sat back with our hands in the air and thought YES. My husband and I would smile with relief because all of the concerns that we have been struggling with were relevant and came up in the modules. We really enjoyed the course and are excited to move on to the next stages to find our farm resolution.”
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.”
Donna, Farmer, Australia

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