A generation ago, passing on the family farm was a simple process. Profit margins were higher, land values were lower, farm size was smaller, and tax rates were not significant. More often than not, a farmer could draft a simple will to transfer ownership to his children. We are facing serious questions as to whether the family farm can, in fact, be passed down from today's owners to the next generation.
University of Wisconsn-Extension, Cooperative Extension will host workshops in to explore issues and considerations for farm succession in today's high stakes climate. These workshops are co-sponsored by Cooperative Extension's Center for Dairy Profitability.
As the nation witnesses the graying of America, the rural farm sector is also feeling the effects of the aging of the baby boomers.The average age of Wisconsin farmers is 53 years old. Data culled from the 2007 Ag Census show that approximately 50% percent of Wisconsin farmers who identified themselves as the principal operator are 55 years old or older.
The United States Department of Agriculture estimates that over 500,000 of the nation's two million farmers will retire during the next decade and that they will be replaced by 350,000 entrants. This means a potential for literally thousands of farm transfers in the United States over the next few years, at a time when we see complex and rapid changes in the industry due to technological innovations, trade and other government policies, a growing world population, urban pressures on agricultural lands, and the pressure of conservation and environmental concerns.
Transferring the farm business to the next generation is seldom an abrupt process. The transition generally takes place over a number of years, thus successful farm succession takes good planning and communication. The succeeding generation needs to establish a firm financial footing as well as learning to manage the business. The retiring generation has to be willing to turn over control of the business and trust that the successor will do well, but also must consider the practical matters of determining the sources of retirement income and how dependent they will be on the business assets for their retirement.
Developing a working plan will make the actual transition smoother and will make communicating the transfer details with on-farm and off-farm family members easier. Even if your transfer may happen a few years from now, starting early will help the process go more smoothly.
Transferring the Farm in a High Stakes Era will explore these issues and considerations for farm succession in today's high stakes climate. Topics include:
• Financial considerations for retirement
• Farm business arrangements
• Dealing with the 5 D's: Death, Divorce, Disability, Disaster and Disagreement
• Tax considerations for farm transfers
• Beginning farmer business planning
• Importance of communication in farm transfers
Phil Harris, from the Applied Agricultural Economics Department at UW-Madison and UW-Extension Agriculture Law Specialist will be a featured speaker at this workshop. He will discuss business arrangement and tax considersations for farm transfers.
For more information and registration details contact the following:
• Ladysmith: Feb. 1, Rusk County Community Library, 418 Corbett Ave. W; contact: Rich Toebe, 715-532-2151
• Abbotsford: Feb. 2, Abbotsford City Hall, 203 N. 1st St.; contact: Tom Cadwallader, 715-539-1072
• Monroe: Feb. 3, Justice Center, 2841 6th St.; contact: Mark Mayer, 608-328-9440