Planning ahead crucial in agriculture
SAVOY – Without a succession plan in place, very few farm families survive the unexpected.
That is the finding of Dr. Ron Hanson, professor of agribusiness emeritus at the University of Nebraska-Lincoln. Hanson spoke to an ag audience at the Champaign-Urbana Elks Lodge this week on the importance of planning ahead.
“I will not make one single friend in this room,” Hanson said. “I’m going to be brutally honest.”
Succession planning tends to be a difficult subject for many since most farmers are very private individuals. Hanson encourages families to sit down and talk about specifics such as what the farm is worth and what will happen down the road.
“Everything tends to be one big secret and that’s true for a lot of families.”
Nobody admits it, but many times there tend to be family favorites among children and grandchildren. Hanson has sat in rooms with families involved in total conflict and every single time, the conflict resulted from jealousy between children.
A will simply states who gets what in the event of someone’s death, but a succession plan means everyone knows and understands what happens tomorrow if something unexpected happens today. Hanson admits there are no short cuts, easy solutions or quick fixes for these issues.
Very few family farms in Illinois have succession plans. Families never seem to get past the obstacles and fears to sit at the table to talk about the real issues at hand.
“Why would you work your whole life to build something and never put a plan in place to protect it?” Hanson asked.
Hanson believes producers need to get over the notion that they will farm forever and face the fact that they will someday pass on. Children who inherit farms occasionally have other dreams and plans so they end up selling land.
“If it’s their land to sell, what’s the problem?”
Control is another obstacle plaguing agriculture in Hanson’s opinion. An example would be a father assuming nothing will be done on an operation without his approval. These obstacles can turn into roadblocks when it comes to succession planning.
“Control can be very powerful folks, but often abused,” Hanson stated.
Hanson observes problems in his office today he never saw 10 years ago. A generation ago, kids walked off the farm and never looked back. They didn’t want to deal with the headaches of farming.
“Guess what? Today they’re looking back.”
Land values skyrocketed once commodity prices jumped up in the past decade. Hanson feels $7 corn and $16 soybeans were the worst thing to happen to American agriculture.
Planning for the future can be difficult because it takes us out of our comfort zone. It requires a family to openly talk about the issues. This can result in personal and family stress which can seem overwhelming at times. Money, wealth and land ownership really put families to the test.
The “Generations of Agriculture Matter” presentation on Tuesday was sponsored by Stor-Loc, Midwest Bio-Tech, Strategic Farm Marketing, Kuhn’s Equipment, Agrivest Inc. and Lincoln Financial Advisors.