by Roger T. Williams
Farm succession—transitioning the farm from one generation to the next—can be overwhelming for farm families when added to the daily decisions necessary to run the farm. If a farmer is lucky, succession will be something experienced just twice in a lifetime: once when first taking over the business and again when passing it down to the next generation.
Farm succession requires early planning and good communication. Early planning provides time for building management skills and equity for the younger generation; it also provides time for the older generation to service debt and plan for retirement. Good communication involves a blend of good family communication and good business communication so the decisions being made work for both generations.
Farm succession also raises the question of readiness: the older generation’s readiness to step back from the day-to-day responsibilities of farming and the readiness of younger farmers to take on these responsibilities. Getting these two “planets” to align at the same point in time can be a delicate or perplexing thing. Again, it requires early planning and good communication. This paper focuses on communication (see a companion paper—“Farm Succession Planning”—for thoughts on how to plan for this transition).
Communicating with Younger Farmers
For several years now, I have been mediating farm family conflicts throughout Wisconsin. Many of these conflicts involve intergenerational farm family disputes: conflicts between parents in their 60s, 70s and 80s and their “kids” who are in their 30s, 40s, and 50s. Many of the disputes involve intergenerational farm transfers; all of these disputes involve difficulties in communicating hopes, wishes, goals and expectations.
I’ve learned that the starting point in almost all of these conflicts is rebuilding trust between the involved parties. Trust involves four critical elements: respect, responsibility, active listening and honest sharing. Think of each of these elements as one leg of a four-legged stool: if any of the “legs” are missing, the stool will tip and the person sitting on the stool will topple to the ground! I’ll comment briefly on each of these critical elements:
Respect: Respecting the intelligence, talents, contributions and schedules of other persons in the relationship; Treating others as unique, contributing members of the farming “team.”
Responsibility: Taking responsibility for individual actions that help the team succeed and “pitching-in” to cover responsibilities that fall between the cracks; Doing your “fair share.”
Active Listening: Actively listening to the thoughts of others and to the feelings behind the thoughts; Using “active listening” phrases (“I hear you saying ____”) to clarify what you heard.
Honest Sharing: Sharing your hopes, wishes, goals and expectations in caring vs. hurtful ways; Using “carefrontation” vs. “confrontation” to express differing views on issues.
The irony is if farm families used these four elements in their day-to-day communication—and especially when they are talking about transitioning the farming operation—there would be less need for mediation to deal with conflicts between families. So, make every effort to use these four elements—respect, responsibility, active listening and honest sharing—in your communication about transitioning the farm. Here are some other thoughts about communicating during this important transition period.
1) Be clear about your hopes, wishes, goals and expectations: Give some thought to each of the issues outlined in the paper “Farm Succession Planning.” Seek input from farmers and others who have experience with farm transfers: extension agents, farm management consultants, farm credit officers, tax/accounting specialists, attorneys and others. Quite simply, you need to be clear about the direction you want to go if you are to achieve your goals. If you are married, be sure you and your spouse are in agreement about the directions you are taking.
2) Call a meeting and invite the most important actors: The younger farmers—whether they be family members or non-family members—need to be invited. If it is family members, you might consider inviting other family members who have a stake in the farming operation, but be aware of how this might affect the dynamics of the meeting. If it would have a chilling effect on the discussion, it might be better to inform these family members after the meeting. Be sure to include food; it is the best way to demonstrate hospitality!
3) Begin by acknowledging the difficulty of talking about this issue. Farm transfers are complex and, thus, not easy to discuss. By acknowledging this up front, you will help set everyone at ease—yourself included! Choose words that feel right to you while communicating this message: “It’s not easy to talk about farm transitions, but we’re not getting any younger and it’s time we talked about it.” If it’s your kids that are involved in the farm transfer, they may think its past time for talking about the topic, but they should at least give you credit for initiating the conversation now!
4) Honestly share some of your hopes, wishes goals and expectations: Don’t dump the whole load on them; just give them a 4-7 minute synopsis of the direction you are heading! Be honest about what your goals and expectations are, but do it in a caring way that invites them to share in your vision about how the transfer might occur. Make sure you mention something about the financial and legal arrangement you envision, something about management/labor decisions, something about the personal/business relationship you are seeking and something about your hoped-for activities as you transition the farming operation.
5) Attentively listen for their reactions, especially their concerns. Transferring a farm is complex. The younger farmers are likely to have concerns. One of their greatest concerns may be the financial viability of the farming operation—whether there is sufficient income to support them and you as you transition your involvement in the farm. They may have real anxiety about some issues, so it’s important that you not gloss over their concerns. Instead, acknowledge their concerns (“I understand why you might be feeling anxious about that”) and offer to do problem-solving around the issue.
6) Initiate problem-solving, seeking a win-win solution for everyone. Problem-solving involves four things: a) a clear definition of the problem, b) a look at what options are available, c) an exploration of which option will work best, and d) creation of a specific course of action. It’s important that you try to find win-win answers: solutions that help everyone come out a winner. If the concern is financial viability, can you find ways of converting assets or increasing cash flow so everyone comes out a winner? If the concern is division of labor, can you find a winning solution for everyone involved?
7) When you reach common ground, be sure to write up an agreement. Given the complexity of family farm transitions, it’s important that agreements be written down on paper. Recognize that it might take two or three drafts to reach an agreement that works for everyone. So, do a draft and seek feedback, then do another draft and seek feedback. Emphasize that you want this transition to work and it can only work if all the participants involved in the agreement understand its provisions and feel comfortable with them. After you have your thoughts, ideas and wants on paper, it can be helpful to have professionals review your plan; seek feedback from your attorney, tax specialist, lender and financial planner.
8) Seek outside help if you experience bumps along the way. The Wisconsin Farm Center (1-800-942-2474) at the Wisconsin Department of Agriculture, Trade and Consumer Protection has resources that can be helpful to Wisconsin farm families in transition: Mediation Program, Beginning and Transitioning Farmer Program, Farmer Assistance Program (cash flow, feasibility analysis, enterprise analysis, business plans). Extension offices, technical colleges, agricultural lenders, farm management services, tax/accounting services and attorneys can also bring needed expertise if you experience problems in planning your farm transition. Feel free to reach out to these important resources if you experience bumps along the way.
Readiness to Transition: Aligning the Planets
Transitioning the family farm to younger farmers requires a readiness on the part of those wanting to scale-back as well as a readiness on the part of younger farmers. Getting these two “planets” to align at the same point in time can be the tricky thing.
When the timing is not in alignment, the older farmers may try pushing the younger farmers or the younger farmers may end up nagging the older farmers to retire or scale-back. This is not a satisfying experience for either party.
To prevent this from happening, try to anticipate when you would like to transition your involvement in farming. Then plan for this by addressing the issues outlined in a companion paper “Farm Succession Planning.” And finally, communicate your hopes, wishes, goals and expectations with the younger farmers. You can’t control the actions of younger farmers, but you can invite them to be a part of your family farm transition. If this transition is done in a thoughtful way, it can provide an exciting opportunity for both parties: those scaling-back and those scaling-up!