Throughout the year, we have captured and showcased some of the fascinating characters and stories found on family farms throughout the Maritimes. One recurring theme has been how to transition the farm between generations, and what happens if no one is interested or able to take the farm on. Addressing that challenge is the focus of this month’s feature.
For all its modern advances, farming is still a lifestyle rooted in time-honoured traditions and practices. One of the oldest traditions is handing down the farm from one generation to the next, but this transition doesn’t always happen seamlessly.
That’s where succession planning comes in.
“There are many definitions, but to me succession planning means planning for the business to continue beyond the current generation,” says Colleen Younie. She is the Farm Business Management Officer for the Prince Edward Island Department of Agriculture and Forestry.
Succession planning means more than having a plan to divide up assets and responsibilities. It also means discussing long-term financial and business plans, as well as goals, aspirations and expectations.
Younie works with farming families on all sorts of management issues, but she says that conversations about succession planning are often not easy to start. “The real obstacles are the soft issues, the people issues,” she says. “It requires open communication. If you’re going to do this right, you have to know how to talk about things.”
Succession planning often elicits feelings of loss of control from those who have been at the reins for decades. The retiring generation often thinks the younger generation is not ready, Younie says. Making decisions about taking the farm in new directions can also be difficult for those living through the transition.
“To say to a 70-year-old that you’re going to split a farm, it can be heresy,” she says. “They’ve been working so hard to make it work, and then all of a sudden, you’d be splitting it. Parents want to treat their children fairly, and the enormity of it all can be overwhelming.”
Yvonne Thyssen-Post has witnessed this scenario many times. “People reveal a lot to you when you fall into the role of a facilitator,” says the owner of Thyagrissen Consulting in Truro, Nova Scotia.
Thyssen-Post founded Thyagrissen in 1998 after having worked with the Nova Scotia’s Department of Agriculture for 14 years. During that time, she says she saw a void when it came to planning in agricultural businesses. She has worked with farmers on succession planning throughout the Maritimes, and understands the emotional impact that comes with it. “It’s no different than to sit and talk about what happens when you pass on,” she says.
To make things easier for her clients, Thyssen-Post starts a dialogue with everyone involved. “If people aren’t willing to help themselves, no facilitator will make that happen,” she says. “It’s no different than with any other business, but it’s a family business, so the potential buyers and partners are often also your kids.”
Thyssen-Post talks honestly with her clients about everything from the value of assets, to financial projections, and most importantly, the viability of a farm as a business. “People need to think about [their own] succession when they take over the farm,” she says. “Think of the impact 10 or 30 years down the line. I’ve worked with farms where the debt load is so high they cannot transfer and pay the parents anything other than just assuming the debt load. And what does that leave the parents with? Nothing.”
In Prince Edward Island, Younie has noticed the same thing in her work. “You have to consider, is the farm strong enough to support another family? You could have three or four generations trying to be supported by that farm.”
Difficult financial and familial discussions aside, both Younie and Thyssen-Post believe that slow and thoughtful transitions for farmers can help the farm – and its benefactors – succeed. “If you have somebody like a family member or employee learning the necessary skills, it helps incoming generations,” says Younie. “Then you can gradually transfer some control.” Younie suggests slowly removing responsibilities from one family member or employee in the farm and transferring them to the next generation for a smoother transition.
That also transposes onto familial relations. “Most will say it is a long process to figure out, but the next generation can still be involved with the former, and everyone still gets along,” says Thyssen-Post. “The farm is viable and profitable, and the next generation has an opportunity to succeed in the business.”
For her, it’s about forging an open and collective desire to have the farm and its legacy continue in a way that benefits everyone. “I have seen it done correctly, but that’s because everyone wants to make it work,” she says. “That’s where the communication comes in. They all make sacrifices and at the end of the day everyone is satisfied with the solution.”