Will Your Succession Plan Be a Success - October 2010
One of the big issues facing agriculture is whether the aging population
that owns land and produces food in this country will be replaced by another generation. With the punitive tax provisions set to go into place absent some Congressional action, and the normal difficulty experienced by producers who set about to transition their operation on to the next generation, the future is anything but certain. The land which is currently being used for food production will most likely continue to be utilized in that fashion, but the real question will be “by whom”?
Just because an operation has been in the same family for several generations, doesn't mean that is the way it's going to continue. In the coming months we will be featuring some articles which will hopefully provide good information on how a producer can move their agricultural business into the next generation's hands in a way that will ensure that generation will be able to continue on in food production.
One of the things we need to realize is this isn't just a problem for Wyoming producers, nor is it just a problem for U.S. producers, but it seems to be a problem worldwide.
The capital necessary for a new producer to get started in agriculture is significant and the expected returns can be less than stellar. Back before the stock market crashed, anyone who was willing to invest in agriculture was looked at a little askance. After all, why would you invest in an agricultural operation when you could take that money and gain much higher returns in Wall Street. Well, a few downturns have changed that.
Given the importance of succession planning you have to ask yourself why there is such a dearth of it. It probably has to do with the fact that it is such a large undertaking people don't want to start. It's also a process which needs to be flexible as circumstances change. This is unlike a lot of problems we are used to dealing with in our lives. If the animal is sick and we don't know how to treat it, we call the vet and it either gets better or dies but the problem has a fairly finite time. If you have weavel in your alfalfa crop you look at the extent and either spray or don't, but again the time is fairly short compared to something like turning the business over to your kids.
The good news is that there are professionals who can help you once you start down that path, but perhaps the most important aspect is taking that first step of beginning to talk to the next generation about it. Even these first steps can be difficult to start, but the goal of helping the next generation carry on the operation is a worthy effort.
I hope the articles we bring to folks in Wyoming Agriculture will help get this process moving, or help motivate people who have started but stalled out to once again begin moving.
This nation has always been a success because of the involvement by thousands of people in production. Agriculture shares that similarity with the rest of the nation, but perhaps the most important move that a producer can take is training their replacement and then giving that replacement the opportunity to take over.
By Ken Hamilton, Wyoming Farm Bureau Federation Executive Vice President