We face many ‘readiness’ questions for big and small things throughout our lives. Am I ready to get married? Am I ready to be a parent? Am I ready to change my everyday habits?
For family farmers, farm transition readiness is a question that brings up as many emotions as it does logical thoughts. Unlike many careers, farmers tend to live and work in the same place and their land ‘or work’ has been part of their family heritage for much longer than their lifetime. Being a farmer is quite often more than what you do, it is often who you are.
Being ready to transition your family farm goes well beyond circling a date on the calendar and getting finances in order. Knowing when you are ready to transition your farm involves several discussions with family, on-farm workers and trusted professionals as well as time spent reviewing options, finances, needs and current situation. Plus, the time spent preparing yourself and your family emotionally for the changes to come on the farm.
According to Statistics Canada’s 2016 Census of Agriculture, the average age of Canadian farmers is 55 years old – with only 9.1% being under the age of 35 – and the average size of farms has increased. Like Canadians as a whole, the population is aging, and baby boomers entering retirement age en masse, are considering what their futures hold.
The same Statistics Canada report shows 8.4% of farmers have a formal farm transition plan. The findings also show that sole proprietors (4.9%) are less likely to have a written succession plan compared to farm corporations (16.3%). Farm transition is too important to leave to chance and the longer it takes to establish a plan increases the risk of an unsuccessful transition.
There are many components of farm transition planning and very few farmers have qualified professionals to help them navigate the process. Team members at Intent have been working with Canadian farmers for over 25 years to ensure their farm transitions are successful and therefore able to continue thriving well into the future.
We have created and implement a multi-facetted process where we take the farm and family members through:
- various types of financial analysis for family members and farm;
- farm business strategy including structure and human resources;
- economics of the farm’s production;
- family dynamics and communication;
- an overall risk assessment and solutions for mitigating them; and
- review any value-added ventures.
Each phase in the process also considers tax implications to farm and family, the various family dynamics involved and the longevity and future prosperity of the farm. Our approach is truly holistic and focused on the most positive outcome possible.
The team at Intent has also developed a 10-point questionnaire to help farmers determine how ready they are to transition their farm to the next generation. The higher the point value the more likely it is that you’re ready to transition your farm. We would encourage you to take five minutes to answer the questions and get a better sense of your farm transition readiness. This is an excellent, mindfulness exercise regardless of whether you’re just starting or are well on your way to establishing a farm succession plan.
In our experience the most difficult step in planning to transition the family farm is starting the conversation. Having trained, experienced professionals by your side is a critical asset to you and your family. To talk about how farm transition ready you are and add us to your team of professionals, connect with us today.