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Transfer Of The Farm Business


Each month this fall and winter I will devote one article to addressing transition management from my professional vantage point. Transition management is one of the top three issues facing agriculture and business worldwide. The following question came from one of our readers concerning transition management of the farm and ranch business.

“I have been troubled by a recurring pattern of difficulty for the owner parent transferring successful control to their offspring. There seems to be more interest by the younger generation in working on the farm than actually owning the farm business and accepting all the risks and stresses associated with it. Is this problem becoming more widespread? What kind of incentives can a father or mother use to inspire the next generation to take up the struggles and challenge of farm management and ownership?”

One of the major trends observed in my producer seminars is the number of young people under 40 years of age with an interest in agriculture.  Also, I have noticed an increasing portion of women and minorities with agricultural interest in certain regions of the country.

How can a mother or father inspire in the next generation to step up to ownership and management of the family business?  If the parents have an attitude of “you can’t do,” or “why would you want to?” and constantly communicate this to the next generation, their children will likely not be interested in taking over the business. 

There are many ways to motivate and inspire the next generation to farm management, responsibility and ownership. Over the years, I have found that sometimes the eagle, i.e., the parents, must kick the children out of the nest before returning to the farm or ranch business.  This period can range up to three years with one experience for six months to a year outside of the region, state or province, and one experience beyond the borders of the U.S.  Frequently this will add confidence and allow them to learn new methods of production and management to add to their existing skill set.  They will find that other occupations and businesses have risk and stresses, and the family business is the rule rather than the exception.

The younger generation will tell me in seminars that they want balance in life.  That is, the balance between owning and managing the business, and having personal and family time. When they observe the older generation not scheduling time away from the business for family and personal activities, the thought of ownership and management is a low priority. 

Another factor is the spouse or significant other. Famous management author Peter Drucker described that whenever you hire an individual, directly or indirectly you hire their spouse or family.  The bottom line frequently is the son or the daughter gladly accepts being an employee, rather than an owner and manager, if their spouse is not on board with the additional risk, responsibility, time commitment and some of the imbalances that frequently occur in owning and managing a business.

Next month, we will continue this dialogue on family business transfer. Stay tuned!


Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at

TAGS: Management
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