Last week I was at a meeting of local zoning inspectors and township officials. These officials were learning about the tools which can be used to keep agriculture as an integral part of their communities.
A lot of discussion was held on how local townships and municipalities could help make their community farm friendly.
During the discussion, one participant said they are 190 percent behind agriculture but was concerned on the longevity of many of the dairy farms in his township as none of the sons or daughters of the owners are returning to the farm.
Our Ohio State University Extension Ohio Ag Manager Team has also had this concern when it started a team in 2006 to develop educational materials, workshops and resources for families as they plan for the transfer of their farm business to the next generation.
There are six major questions that family businesses should ask themselves as they plan for the future. These are:
• Do I want to pass my farm operation to my heirs as an ongoing business, or do I want to pass it on as a group of assets?
• How can you tell if the business is profitable enough to provide for the next generation?
• Are there enough income and assets to provide for the older generation’s wants and needs?
• How can you help the two generations get along?
• What should you transfer and in what order?
• How can you avoid paying too much income, gift and estate taxes?
It is critical the discussions about the future should take place sooner than later as there are a myriad of decisions which need to be made.
If a farm family desires for the next generation to return to the farm, plans need to be made to make sure the younger generation makes a fair wage. Plans should also be made to allow the older generation to slow down and eventually retire.
The OSU Extension transition team has revised Bulletin 862 titled, Transferring Your Farm Business to the Next Generation as a resource for families to use as they plan for the future. This 89-page bulletin helps families answer the six major questions when transition planning. This bulletin is one which each generation should read. This bulletin can be purchased at your local county Extension office for $9.25.
Our team also has developed 11 short fact sheets that accompany Bulletin 862. These Building for the Successful Transition of Your Agricultural Business fact sheets can be accessed at http://ohioline.osu.edu/bst-fact/index.html or can be received by calling your local OSU Extension office.
Some of the topics discussed in this series include: business entities available to Ohio farmers, conducting SWOT analysis, developing the next generation of managers, whole farm planning model, tax characteristics of business entities, and planning for the successful transition of your agricultural business.
Transferring a family farm or farm business to the next generation can be a challenging task. Legal issues, tax laws and personal differences between family members are some of the issues families must confront when deciding how to transfer the managerial and asset control of a family business.
Working together, families can answer the tough questions and develop a transition plan that will provide the opportunity for the farm to be successful for many generations.
Let’s prove that dairy farms are great places for our younger generation to return.
(The author is an agricultural extension educator in Ashtabula County. Questions or comments can be sent in care of Farm and Dairy, P.O. Box 38, Salem, OH 44460.)
STAY INFORMED. SIGN UP!
Up-to-date agriculture news in your inbox!