3 steps to successful farm succession
Step 1: transfer of labour
I’m sitting at the kitchen counter, visiting with my parents. My dad is just in from a long day in the fields and he’s downing a reheated roast beef supper. Between bites he mentions an auction coming up and the auger he is hoping to buy, but I’m only half listening because I’m thinking about bringing up a tricky topic. What happens when he hangs up the keys to the tractor for the last time?
We’ve talked about succession before, so I know my parents have at least ten more years of farming ahead of them. My dad always worked off farm in the oilfield, so now that he’s just farming, he considers this his retirement. And why not? If you are doing what you are doing because you want to, not because you have to, you can call that retirement. But even though ten years seems like a long ways away, I know as a financial advisor, it’s not too soon to be talking about what’s next for the farm - and for my parents.
So, with a deep breath I ask, “What do you think you’ll do when you retire?” We mull over potential succession candidates and talk about future possibilities. I point out to them that the first step in a successful transition is teaching someone the day-to-day farm duties. So far, no one has learned the ins and outs of their operation. The potential successors help out here and there, but most of the time it’s just dad out there on his own.
We call this step in farm succession planning the “Transfer of Labour”. In some operations, this step is intuitive. The child farms alongside the parent all their life and knows the day-to-day operations by the time they graduate. In other situations, like mine, this step doesn’t happen as smoothly. Maybe the potential successor leaves the farm and then chooses to return after years of being away. It could be that the parent resists giving up certain tasks or doesn’t trust the successor to do things the ‘right way’.
It’s pretty hard for a fiercely independent man like my father to allow anyone to help him out, but by viewing this as the first step in farm succession, I think that it’ll be a bit easier to for him to stand back and begin to coach a new generation. Luckily for my father, I’m also a stubborn chip off the ol’ block. While he would rather avoid the discussion, my goal is to help him start talking about it, and figure out how to train and identify someone to continue on with our farm’s legacy when he retires.
Check out the next article in this series, 3 steps to successful farm succession: Step 2: transfer of control.
Kimberlee Davis was raised on a family farm that has seen four generations of farming in the Vauxhall, Alberta area. As a Senior Financial Advisor with ATB Securities Inc, Kimberlee works with Southern Alberta clients to develop comprehensive plans for their future including farm succession and retirement planning.