Many next-generation farmers that I coach are sick of complaining. They want this year to be the year they FINALLY gain some equity.
Farmers love carrots, don’t you know? They dangle the proverbial carrot for years in front of the next generation, to keep the young folks guessing about when they’ll become part-owners and have their farm succession dreams turn into reality.
“The proverbial carrot that Dad is holding out is really getting me down,” says the young dairy farmer. “He can’t see our ten years here as commitment. We don’t have the pride of ownership, so my spouse refuses to do any work in the house yard.”
Yes, farmers love carrots. But they hate to think about letting go of their managerial roles and ownership of the farm. They wear the badge of honor, “I’m a farmer; I’ll never retire” with pride.
Have you thought about farm succession planning?
I once saw a newspaper caption that read, “Never too old to work,” over the 80-year-old sheep farmer in the picture. All I could think of was whether he had any successors who are frustrated by dad’s inability to transfer farm ownership?
My colleague, Bob Tosh of MNP in Saskatoon, is convinced that we advisors need to “educate farmers on how to retire and let go of the farm.”
This is something I’m happy to help with. Learn more about my farm succession planning services here.
Bob’s insight was also echoed by Don McCannell, another CAFA colleague, who says, “Dad’s dream is not necessarily the same dream as the next generation.”
Curious about exactly what it is millennial farmers might want? Find out here.
So you’re stuck. You’re frozen by your inability to move forward with farm succession planning, and it’s left you and your potential successors frustrated.
Pulling mucky carrots out of a water-logged garden is hard work. It works much better when conditions are drier. What conditions will get rid of your “someday the farm will be yours” way of thinking?
8 Ways to Let Go of the Proverbial Carrot and Start Your Farm Succession Planning:
1. Talk to yourself.
Reflect on what a great day on the farm really looks like to you.
Remember what it felt like when you were taking over for your parents? Did you forget what it felt like to have a title to land and to be able to negotiate the finances?
Are you having an identity crisis that is holding you back from moving on to your next role on the farm?
Remember that you are a human being, not a human doing.
What you do for a living does not define your character or who you are as a person. I suspect many farmers have a hard time letting go of their title of “boss” because they don’t know who they would be if they left the farm in charge of the next generation.
Don’t just make your yearly goals into resolutions, act and accomplish those goals!
2. Listen to your body’s aches and pains.
You think you’re contributing lots of labor, but the younger laborer at your farm sees things differently—your perception is not their reality. They need to have some equity to leverage their dreams into reality, but you’re stubborn about letting go and don’t want to change the farm business.
If you have no farm successor, then start looking for a joint venture partner. Or, take a sabbatical to “test out” a different lifestyle that’s less taxing on your body.
After all, as Ralph Waldo Emerson said, “Your health is your wealth.”
3. Decide how much longer you want to be happily married.
Your spouse is waiting for some fun and adventure beyond the farm—before you turn 80. She is tired of being “the pig in the middle” of handling the successor’s impatience and your pride of power and control. She also understands that you’re a workaholic. In a loving way, she’s trying to tell you that she needs more family time and fun.
Marriage fitness is essential for farm couples. Here’s how to build a strong relationship.
The next generation is also looking for family life because they will not work in the same way. They have new ideas on how to work smart, but your carrot dangling is becoming annoying. They may soon just up and leave in frustration.
4. Different is just different, it’s not necessarily wrong.
Different dreams from the succeeding generation are being stifled by the carrot dangling in front of them.
They’ve invested 12 years of key energy and labor. They’ve left awesome careers to come back to your business. They’re more than ready to be given some shares or forms of ownership. You don’t need to have this be “all or nothing.”
It can be done or transitioned in stages, but start on it now!
5. “Do it now!”
This is the mantra of successful, wealthy business minds.
Call your team of advisors: the accountant, the lawyer, the financial planner, the agrologist, and the communications coach to get the farm succession planning process moving with hard facts.
I was thrilled one summer when some farm folks updated their will that was 17 years old, bought plots, and planned their funeral. They just needed a gentle push to update their estate plans.
6. Contact your local ag office to find out more about government farm succession programs.
There are programs out there to help you “get rid of your carrots.”
These programs will help cover some of the cost of getting your farm succession plans discussed and put on paper in order to execute them. Younger farmers in some provinces also get a premium of help if they’re under 40, so ASK!
7. Crunch your numbers.
Many farm folks are scared that they can’t live well off the farm.
They know there are farm perks financially, but they have also neglected to build up non-farm sources of income. They’re counting on the farm to provide resources to live for the next 20 years.
I can refer you to service financial planners who, for a reasonable fee, will help you understand your family’s cost of living needs and income streams. You can also get a rough idea by looking at the last 12 months of bank/credit union statements.
Fear of future money issues is a key reason why folks don’t retire according to Andrew Allentuck, author of “When Can I Retire?”
8. Stop treating all your kids the same way.
The eldest child has put in years of sweat equity to help you create, capture, and grow your wealth, yet they are supposed to wait indefinitely so that you can see what the other siblings sign up for.
Farm succession planning is a process. It has ongoing changes to be made based on needs, expectations, tax planning, and the willingness to test out new scenarios.
Don’t hold the oldest successor hostage to his or her siblings.
You have a business that needs to be viable, efficient, and profitable. It also needs to respond to the passion and energy of those invested in it. Your successors have invested time and labor.
Your farm is not a pie you can cut into four equal pieces for each child. Get over it!
Once you’ve looked at your own financial needs and emotional well-being, then you can start the discussion around, “what does fairness look like to you?”
Remember, it’s not your responsibility as parents to make all of your children economically equal. Deal with the farming successor fairly.
May every carrot you eat remind you that there’s work to be done. Start talking, and get in touch with me about your new scenario that you are building to get rid of the “proverbial carrots” that are rotting on your farm. I can help.
It’s your farm, your family, and your choice.
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This article was originally published on June 7, 2016, and has been updated.