Farm transitions need leadership
Recently I met with a dairy farm family undergoing a farm transition. The farm was passed down through the mother's side of the family with three sons as possible heirs to the operation. Although her marital relationship ended in divorce, the mother was able to successfully manage the business end of the farm and had accumulated adjoining land to the original farmstead, growing the acreage to about 700. At age 57, she said she was now ready to begin the transition process of this 225-cow dairy operation to her son.
How did she get to this point? I believe that it's important to look at some of the essential decisions that were made along the way to arrive at this goal.
Each son had the opportunity to work on the farm and to work for the operation or to make alternative career choices. No one was pressured to work on the farm. The two older sons selected other careers -- one is a teacher and the other is a pilot.
The youngest son expressed an interest in and commitment to the dairy. He decided to attend college and major in dairy business management, but came home every weekend throughout his college education to help with the milking.
When the youngest son demonstrated his commitment to the dairy he was encouraged to assume an active role in the business management decisions made on the farm. He actively participated in determining feed rations, herd management, and herd health and other farm business decisions.
The mother and son are moving into a business partnership with each member contributing his/her share of the knowledge, assets, and experience.
What is also noteworthy is what didn't happen.
The other sons were advised of the decisions made about the farm, but their advice and consent in the farm transition process was not solicited. She said, "They weren't here helping with the crops or the cows. They were off doing their own thing. That's ok. My youngest son was here every weekend. He didn't miss any. I love all my sons, but the youngest is the only one that's going to be involved in the decisions about transferring the farm." Their plan is to transition the farm assets through a limited liability company. She will keep her other sons informed of their decisions, but not involve them in the details. Other family assets or heirlooms will be given to these sons.
Farm transition planning requires leadership from the senior generation. Without it, families face the danger of squabbling over issues totally separate from what is good for the farm business. Siblings can get entangled in unending battles over equality that can result in no one taking over the farm. Because of the desire to avoid conflict, decision-making can be delayed with the end result being more conflict and less time and opportunity for interested family members to take over the farm. And, the farm business decisions that need to be made to ensure profitability for both generations can be delayed or neglected in favor of more immediate family concerns.