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Farm transitions mean tough, but necessary conversations

GRAND FORKS, N.D. — Planting, nurturing, harvesting and marketing crops on a farm is challenging. Passing on that farm to heirs or others can be even more difficult, a farm transition specialist said.

The starting point — and a necessary constant through the process — is communication.

"Communication is the glue. It's what keeps this working. Good communication — open communication — makes this thing go," Russ Tweiten said. "Respectful, open dialogue works."

Tweiten, vice president of agribusiness consulting, succession and retirement planning at AgCountry Farm Services, spoke on farm transition planning Feb. 22 at the International Crop Expo in Grand Forks, N.D.

Four North Dakotans with personal experience in farm transition — Chuck Nelson of Thompson, and Deb Gebeke, Clark Lemley and Josh Ihry, all of Hope — also provided their insights during a panel discussion.

They stressed the importance of getting an early start and candid communication among family members.

Farm transition has been a hot topic in U.S. agriculture for several years. The average age of U.S. farmers is about 58, so many producers — at or near the traditional retirement age — are

thinking about selling or passing on their farming operation. But farm transition usually involves family members, which adds extra emotion and can discourage farm families from starting to plan.

Once farmers commit to developing a plan, they need to determine, "What are your objectives? What are you planning to do?" Tweiten said.

"Are you looking to transfer your farm or ranch as an ongoing business? Or are you looking to plan an asset transfer to your heirs? That makes a big difference," he said.

The former typically takes five to 10 years and be particularly daunting. The latter typically requires three to five years and can be complicated, too, he said.

As they work on their plan, farmers need to ask themselves whether the farm is financially viable and whether it could support more than one family unit, he said.

"The older generation needs income security," and the farm might not generate enough income to support both older and younger generations, Tweiten said.

Another consideration, he said, is whether the older generation will move off the farm into town, possibly to have better access to medical care.

Senior farmers also need to ask themselves, "Are you a mentor or a meddler?" Tweiten said. "Do you (senior farmers) offer guidance, advice, leadership? Or are you walking around checking the air pressure on a tire after your son or daughter just did it — and yes that did happen."

But the younger generation has tough questions to answer, too.

"Is this thing in your blood?" or does the young would-be farmer have a passion for ag, Tweiten said.

Younger farmers also need to decide if they will look at the farming operation "as an owner or an employee" and whether they have the managerial skill to succeed, he said.

Fair and equal?

Tweiten, like others with experience in farm transition planning, stressed the importance of the outgoing generation treating their children equitably, not equally.

Older farmers and farm couples may want to divide farm property equally among several children, only one of whom will farm. But doing so would give that next-generation farmer little, or even no, chance of success, he said.