Keeping Iowa Farms Alive Through Succession Planning
It’s never too early to plan the future of your farming operation, especially when it comes to the next generation. In fact, if you talk to people who specialize in farm succession, they will say the best time to start was yesterday.
However, Kelvin Leibold, a Farm Management Specialist at Iowa State University, says that a lot of times, people will wait on this decision, which can cause issues down the line.
We're really thinking about transitioning labor management, assets, and leadership. So, it's a process that takes over several years.
And when farmers don’t make succession plans, it can become a sticky situation to manage.
Leibold says he has three rules he follows when following farm transitioning which include;
- The ‘Golden’ rule; those who have the ‘gold’ gets to make the rules
- Don’t loan money to the next generation; if farm service agencies aren’t providing capital through their programs, ask yourself if should you be financing them.
- What is the strategy when things fall apart?
Oftentimes some of the difficulties that come with transitioning the farm to the next generation come from the older generation’s willingness to give up labor.
Are they just gonna one day, and not show up? Or are they going to continue to manage the operation forever until they drop dead on the job?
He adds that there are lots of seminars out there to help show farmers what to look at when it comes to making a succession plan.
But there aren't very many places where you can go and they put down the plan in black and white and they say, well, year one, we're going to transfer this many acres to the younger party in year two, we're going to transfer additional acres and then we're going to have a plan that says this is how we're going to transition the machinery.
With this kind of planning, it can be useful to revisit the plan at least once a year to evaluate the strategy and its effectiveness on your operation.