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What’s Next for the Family Farm: Resources Help When Making Decisions

By Matthew Call

Christine Bender remembers the moment 10 years ago when she told her parents she wanted to come back and farm long-term. “My mom started to cry because she was so happy,” Bender said. In the decade since Bender and her family created a succession plan, they’ve had many discussions about working together. Now she serves as manager and partner in her family’s Dodge County farm, McFarlandale Dairy, making her the sixth generation in her family to farm.

Oftentimes, getting the family around the table to have those discussions is hard to do. “I know that, from working in the industry. I saw families ripped apart by working together and they don’t talk to each other anymore. And I hope we never get to that point,” Bender said.

Farm succession planning has a lot of technical components that require accountants, consultants, tax specialists, and attorneys to figure out how and when the transition will happen. But, several steps need to happen before families are ready to put things in writing. One of the big steps is having conversations about expectations and values.

Extension has aided farm families with their succession planning for many years. Joy Kirkpatrick, Extension’s Farm Succession Outreach Specialist, has worked with farmers for two decades. “Farm succession is not something that farmers do regularly. They’ve maybe gone through the process once before when they took over their farm from a family member. But, it’s not something they do on a regular basis. And it’s big change, so there’s hesitancy.”

For Bender and her family, Extension resources available led them to ask the important questions and kept everybody working toward solutions. “Joy helped facilitate our family conversations because where do you start? It’s hard because it’s your life and there’s a lot of emotion tied to these longstanding dairy farms.”

Farmers and their families often consider the work, the lifestyle, and the land that has been in their family for multiple generations to be part of who they are. When succession planning begins, they want to ensure the next generation will have similar values and work ethic. That’s not always the case.

Bridget Finke, Attorney and Partner of Valley Crossing Law, in Baldwin, specializes in farm succession planning. She sees challenges unique to farming that add extra dynamics to the process. “For many families, there’s a high level of pride and sentimentality in the heritage of the ownership of the land. Some farms were homesteaded in the 1800s and have been passed down for multiple generations. Then, there is the added dimension of the farms being largely family businesses. When money and control start interfacing with family dynamics, it can exponentially complicate the transition discussions.”

Finke said that having Extension’s resources available to her clients is invaluable. “Extension’s process of working with farmers keeps them engaged in the process, which increases the likelihood that the transition work will be successfully completed,” she said. “Some people might not dedicate the time to the process until it’s a crisis, and then there are a lot fewer options for proceeding.” 

Succession is not always the best decision

Passing farms from one generation to the next is not new, but Finke said that the situation has changed a lot, even since her first year as a lawyer. “Farms are larger and more complicated. They have more acres, more animals and there are a lot more pieces to the puzzle. A lot of farms diversify, such as a dairy farm adding commodity crops or raising steers or other lines of business. That makes it more complicated.”

And, the day-to-day work of farming has changed. Those changes mean succession is not always the best option. Yogi and Brian Brown of Belleville worked with Extension to transfer their farm to their son and his wife. “It’s always tough to get the conversation going. We knew some of the questions but not all of them,” Yogi said. They created a five-year succession plan, and their son started to work with them in 2019.

Brian had major back surgery in 2020, leaving him unable to work for nine months. Yogi was grateful that her son was there to help run their operation during that time. And, that experience gave her son a better picture of what the Brown’s farm operation required and what changes would need to be made for the farm to support another generation of Browns.

“Through the whole process, Joy kept reminding us of our goals. We said at the beginning that if the farm ever gets in the way of our relationship, we choose our relationship.”

The Browns paused their succession plan in 2022 one year before their son was planning to take over. Their son had talked with them about what he and his wife wanted for their future and growing family. “We knew it was time. We were at a point where we would have had to put a lot of money into upgrading our facilities. That would have moved our son even farther from his goals. We just weren’t willing to do that.”

After agreeing on how to proceed, they contacted Extension to discuss their options for an exit plan. While their dream of working with their son is not going to happen right now, they know they made the right decision.

Developing professional resources and best practices

With 64,000 farms in Wisconsin and a lot of farmers thinking about retirement, farm succession planning expertise is in high demand. That’s led to innovations in how Extension provides succession resources to farms throughout Wisconsin.

While Extension provides in-person workshops and programs about farm succession, farmers have become more comfortable with online webinars and video conferencing software, such as Zoom. That has opened up options for online classes, allowing people to participate from anywhere in the state without having to travel away from their farm. In addition to offering online courses and expanding access to resources, Kirkpatrick has worked to build a network of professionals who understand both the technical and the emotional pieces involved.

Farm succession planning often involves a team of trusted agriculture service providers, including attorneys, accountants, consultants, lenders, and insurance providers. “We wanted to make sure that these professionals knew each other so that they can serve the farms as that cohesive team. We also wanted to build resources to help with those beginning conversations and address any educational gaps for the farm families.” Kirkpatrick said.  “Who better to learn from than the professionals, so bringing the professionals together had two goals, providing networking opportunities and learning about the gaps.”

In 2014, Extension partnered with the Wisconsin Department of Agriculture, Trade, & Consumer Protection’s Farm Center and a private organization, Tax Insight, LLC, to start the Wisconsin Farm Succession Professionals Network (WiFSPN). Through WiFSPN, farm succession service providers receive professional development and networking opportunities. As an attorney, Finke has attended networking events whenever possible.

“The presentations and information are helpful, but connecting with other professionals has been great. Outside of networking events, I rarely get to catch up with or meet new professionals. Being able to pick up the phone and ask for information and resources on referrals or data is invaluable to me,” said Finke.

Those networking meetings identified resources that would be helpful to service providers, and in 2019 the Cultivating Your Farm’s Future workbook was created. Based on focus groups with farmers, the workbook guides families through important questions to help them get started. The workbook is available online for anyone who is starting to think about farm succession. “We found that the workbook is also used by professionals as well as by farm families. We’ve found that many service providers welcome new tools to help them with the process,” Kirkpatrick said.

Also, Extension partnered with Iowa State University Extension and the International Farm Transition Network to develop the Certified Farm Succession Coordinator training. By training professionals to coordinate the succession process, more families have access to the resources they need to make important decisions. The 20-hour training focuses on communication, strategic planning, and decision-making for farm succession professionals. They learn about the process of farm succession facilitation and discuss the human component of the process, such as how gender, generational, and personality differences affect communication. The online training has been held 21 times, certifying 475 Farm Succession Coordinators throughout the US.

Finke went through the Certified Farm Succession Coordinator Training, which helped her appreciate the big picture, the different players in the process, and how they view things. “Any of us can focus on our end of things, our specific part of the process, and not be thinking about how others like accountants or bankers look at farm succession. The training helps all of us have a playbook to work on and move in the same direction.” 

Kirkpatrick describes farm succession planning as high-tech and high-touch. It helps to have a workbook to guide the process and professionals who know what they are doing, but every family has different emotions, personalities, and situations to work through. “At the end of the day, with all the information available, every farm is different. And we find that people often get to a certain point where they need to talk with a real person who can serve as a neutral facilitator to help them build out their goals and ideas so they are better prepared to clearly communicate them as they work with their team of professionals,” Kirkpatrick said. For that reason, she continues to look for new ways to expand state and local resources so more farmers have access to that “real person” who can be available throughout the whole process.

Kirkpatrick thinks that counselors could be a natural fit because they have the skills and training to navigate families through the emotions and conflicts that often arise. “If we can teach them what they need to know about the logistics of farm succession then we might have a way to provide that facilitator role to a lot more farm families throughout the state,” Kirkpatrick said. Starting in March, the next Certified Farm Succession Coordinator Training will include a small group of counselors who have agreed to be part of a pilot program. Kirkpatrick will get their feedback throughout the training and work with them afterward to see if this could be a new model for making sure that the high-touch, individualized aspect of succession planning can be available to the thousands of farmers who will consider succession planning this year.

Source : wisc.edu

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