You are here

The challenges of family farm transitions

speaker Ron Hanson addressed 50 New Century Farmers from 22 states at Pioneer
Hi-Bred headquarters in Johnston, Iowa on Thursday. But his target audience
also included family members doing the chores for them back home.

“Most families fail to discuss the real life ‘what if’ issues in terms of farm
business ownership succession,” he said. “These family issues are difficult to
discuss and work through.”

Hanson, a University of Nebraska-Lincoln professor, has spent 39 years teaching
agricultural finance. During that time, his passion has been to counsel
countless young farmers and their families outside of the classroom.

“Tax planning and estate planning are extremely important,” he said. “But you
can have the best tax planner, lender, or attorney, and it won’t work if family
members don’t share the same vision for the future of their farm business, and
are unwilling to discuss their vision together.”

Hanson said that family farm transition issues are the greatest challenges
facing agriculture today. He outlined the following seven key business
ownership issues:

The role of the father
Hanson said that dad wears a boss hat and a dad hat. “He may have to
change hats several times a day.
Some dads never compliment the adult child’s work, and that can drive them
away,” he said.

Who is considered family
“The daughter-in-law is the biggest fear factor for parents on the
farm,” he says. “But if you exclude in-laws from the business and decisions, it
will come back to haunt you.”

Controlling parents
“Some parents actually raise their children to be followers,” he said.
“Their adult children won’t become independent thinkers with their own

Transfer of Ownership
“If you are working on a farm with nothing but hopes, dreams, and
promises, you are taking one heck of a risk,” he told them. “If things aren’t
right, fix them. Set a deadline. If you have children, tell your parents that
for your kids to have a future, you need to have a future.”

Nonfarming children
Hanson asked, “Are your parents willing to treat all kids fair and
equitably in their estate plan? Notice that I didn’t say equally. But their
decisions need to be respected. Your parents don’t owe you a farm just because
you love agriculture.”

(6) Fair selling price
Two questions are important, Hanson said. “Is your goal to keep the farm in
the family? Or, is it to get top dollar for the family farm?” Adult children
must recognize that “the farm is the largest share of their
parents’ financial investment for retirement,” he said.

Salary and wages for adult children
“From day 1, parents have to help their adult farm children acquire
farm assets in their own name, and build their own net worth,” he said.

Hanson concluded, “Ignoring these seven issues now will only result in serious
consequences and family troubles later. But keep these issues in perspective.
Farms can be replaced, but families cannot.”

The New Century Farmer conference is
sponsored by Pioneer Hi-Bred, Rabo AgriFinance, and Case IH, with media partner
Successful Farming, as a special
project of the National FFA Foundation.

Read more about

Talk in Farm Business

Most Recent Poll

How much are you willing to spend on seed for your 2017 corn crop?