Yet according to an Ipsos survey, more than 70 percent of producers who plan to transfer farm ownership to a family member don’t have a succession plan in place.
Bruce Tait, senior vice-president of agriculture with accounting firm MNP, said farmers have struggled with the concept of farm succession planning.
However, the message is slowly getting out.
“We are seeing more and more acceptance each year,” he said.
Compared to other private-sector business owners, farmers have been slow to accept farm transition planning as a necessary step in ensuring the viability of a multi-generational operation.
Tait said farms that were started generations ago have grown in size and value. Today, many farm families control assets worth millions of dollars.
However, corporate structures, management skills and attitudes have not always evolved to reflect the value of those assets.
Succession should not be seen as a process in which senior managers have 100 percent control one day and zero percent the next, he added.
A good strategy can take several years to plan and several more to execute, with roles, responsibilities and ownership stakes gradually evolving throughout the process.
Elaine Froese, a succession planning expert and farm family business coach, agrees.
She said farm succession planning is an ongoing process that often involves a number of different professional advisors, not just an accountant.
When she coaches farm families on succession planning, Froese tries to establish a foundation of understanding on which families can build a plan.
A family’s desire to avoid conflict usually leads to inertia. To reach a consensus, family members must voice their opinions, share their visions and stop avoiding conflict.
Froese said young farmers planning a future on a family farm want to know “what the plan is” but older generations are often unable to hand over the reins because they fear losing power and control.
“When I coach families on farm succession planning, I create certainty of expectations, clarification of timelines and agreements and a commitment to act. Those are my three big Cs.”
“When you’ve got those out on the table, then you’re no longer fighting or avoiding conflict … instead, you feel like you’re getting out of neutral and you’re finally putting the plan in a drive position.”