Turning over a new leaf – Farm business succession
A new twist on an old idiom, with farm business succession planning in mind.
The idiom “Turning over a new leaf” actually dates back to the 1500s and refers to turning the page (leaf) of a book, tuning over the previous page with the bad behavior, and starting out with a fresh page. On my recent hike in the Smoky Mountains, I had another take on this old idiom.
As I trudged through the fallen leaves on the Appalachian Trail, it was quite apparent that it’s very easy to turn over a fallen, dead leaf. On the other hand, if you grasp a new leaf on the tree and attempt to turn it over it twists right back.
What does this have to do with farm business succession? In the course of my career with Michigan State University Extension, I’ve witnessed many ways that farmers transition their farming operation to the next generation. Some smooth and organized, some rough and traumatic. For the sake of this article, I’ll put them in to two categories: Those who transition the farm while the older generation is still alive and involved, and those who wait until the older generation is gone, or at least not wanting to be involved anymore.
Using your estate plan that takes place at your death is the easy way out on farm business succession planning. The dead leaf flips over easily, but there is so much opportunity lost with this transition plan. How will the next generation really learn how to manage if you haven’t given them that chance while you are still around? Who will be their mentor as they work through the mistakes and learn the lessons? Too often I hear that “he/she is just not mature enough to manage this farm”. Maturity best happens as one is actually doing the job and making mistakes. We don’t learn very much just watching someone else. It’s sad to see older generation farmers fail to allow the next generation an opportunity to own and manage until they themselves are ready to be done farming.
Transitioning your farm to the next generation while you are still very much alive and active is much better. Of course turning over a green leaf is much more difficult, but it is also much more rewarding. Seeing your son or daughter mature as they take on the management role can be very rewarding. Providing guidance when they ask for it can be equally rewarding. Certainly a farm that actively begins to transfer ownership and management responsibilities early is much more likely to have a smooth and successful transition.
MSU Extension has some great resources to help you in farm business succession. Please visit the MSU Farm Information Resource Management (FIRM) Team website for more information.