“It’s estimated that over 70% of the farmland will change hands by 2030. Is your farm prepared?” That was the statement and question presented by Paige Pratt at the Midwest Women in Agriculture Conference recently. She put the question right out front where those in attendance couldn’t avoid it.
Pratt and her husband, Jason, co-own Johnson Farms LLC near Dwight, Kan. She works for Kansas Farm Bureau today. Previously she was an Extension specialist at Virginia Tech.
Pratt shared eight tips for preparing for and making the transfer of the farming operation successful. She stressed the importance of making sure the older generation is ready to be done living their dreams and ready to help the next generation live theirs before the transition process begins.
Once the decision has been made to move forward, create a plan, she advises.
1. Distinguish between a family farm business and a farm family business. Deciding which comes first, the farm or the family, will help in making tough calls, Pratt says. Doing what is best for the farm rather than tiptoeing around sensitive family issues will be critical to successful planning.
2. Designate a workspace for the farm operation. Provide a clear, neutral area where collective and individual work can be done. That might mean building an office. This workspace fosters a safe environment where discussions can be held and decisions can be made.
3. Spell out important details as you begin to plan who does what. Decide the amount of time given for vacations and personal time for family functions, Pratt says. Also discuss how much time can be allotted for children’s activities. Decide these types of issues upfront before small things become big things.
4. Include time for training in your transition plan. Taking time out to receive valuable training and resources is beneficial. Make sure the opportunities are rotated among everyone who will be involved in the operation as you move forward.
5. Determine when and where you will hold business meetings. Hold weekly, monthly and/or quarterly manager meetings. This will assure that good communication is taking place. Make sure everyone is aware of the meeting schedule well in advance.
6. Make sure everyone is included in important conversations. Have regular conversations. They should involve everyone so it’s clear what each individual is doing. This is especially important if varying compensation is a component of the operation.
7. Don’t hesitate to hire a support team, if necessary. Seek out attorneys, accountants, bankers and risk management professionals. Consider including anyone who would lead the operation through hard questions or unforeseen events. Make them part of your team.
8. Write out the plan in detail. Be prepared with a notarized plan of agreement in case of death, divorce or disability. These are all events that could trigger a buy-sell situation among various members of the family and farm operation. Exactly how this process should work if one of these events occurs should be spelled out very specifically in the written plan.
McClain writes from Greenwood.