Farm retirement, management linked

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SALEM, Ohio – Stop to think: How many farmers do you know who have retired and actually let someone else take over daily operation?

Don’t count the neighbor who became mentally or physically incapacitated, and forget about the farmer next door who died before any transition was made.

Chances are you might not know any.

In crisis. Preparing the next generation to control a farm is often overlooked. When it comes down to the wire – usually upon the death of a parent who refused to relinquish control – both the children and the business suffer.

Passing the family farm has been dubbed the ‘real’ farm crisis, lagging behind low commodity prices and urban sprawl.

A 2002 research report by the Economic Research Service revealed some staggering facts:

* Only 6 percent of farmers are under 35.

* Half of all farmers are ages 45-65, and 24 percent plan to retire in the next five years.

* The average age of farm operators is 55.

‘You can’t do it.’ Many business owners keep tight reins on their employees’ responsibilities and hesitate to let young people stumble as their aptitude is tested, according to Howard Siegrist, Licking County extension agent.

“You’ve got to give ownership and equity if you expect anything to happen,” Siegrist said. “A lot of guys don’t let that happen.”

It’s not as easy as waking up one day and transferring ownership and work. The task begins well ahead as the younger generation is readied for their responsibilities.

“It’s a problem if there’s someone whose milking cows at age 50 for mom and dad and doesn’t have any farm assets in their name,” said David Miller, an extension district specialist in farm management.

“You’ve got to think of that younger generation as a manager trainee, not just labor,” Miller cautioned.

At the same time, the younger generation can’t come back home and expect to take over at the drop of a hat.

“You’ve got to think of this as any other business. You don’t go into another job and expect to be the top guy right away,” he said.

Little by little. Younger members of the team should be given an increasingly important management role as the farm owner changes from an ‘I decide’ to ‘we decide’ mentality, said Chris Zoller, an extension agent in Tuscarawas County.

When dividing management responsibilities, Zoller recommends identifying strengths of each member.

“Figure out who likes to do what. Don’t beat your head against the wall trying to have one person do it all,” Zoller said.

Moreover, Zoller cautions against developing the mentality of “if it works, I’ll give you credit; if it doesn’t, I’ll blame you.’

“Don’t set them up to fail,” he said.

Change is hard. “What’s ahead is not like what’s behind. It’s called change,” said Bernie Erven, an Ohio State ag economist who focuses on management issues.

The majority of farmers aren’t comfortable with change – just look around to see how many are still doing something just because of tradition – and have farming so deeply imbedded in their lives that they can’t separate life and the farm.

“It’s hard,” he admitted, “but even harder to let go.”

“And in farming, you’ve got to manage the business and all the challenges of being a family,” Erven said.

Create opportunity. Thomas Edison once said: “Opportunity is missed by most people because it is dressed in overalls and looks like work.”

James F. Byrnes, a South Carolina congressman, senator and later secretary of state during the Truman administration, counters Edison’s comment.

“Too many people are thinking of security instead of opportunity. They seem more afraid of life than death,” Byrnes said.

The schools of thought oppose each other and reflect the mindset of two generations in business, according to Jeff McCutcheon, Knox County extension agent.

“The older guys usually agree with Edison, the younger guys with Byrnes.

“The older guys think the younger ones don’t like work when really all they want is to try something new, to take a chance,” he said.

Be honest. Perhaps one of the biggest considerations in passing the farm is being honest about the family and the farm.

“Too many people ignore transferring the farm because it’s hard, it brings skeletons out of the closet,” said OSU’s Miller.

“It brings out resentment for siblings who aren’t involved in the farm, for in-laws and out-laws,” he said.

“We tend to want to treat the kids equally, but some have increased the value of the operation and need to be compensated.

“There’s nothing so unequal as equal treatment of unequal children,” Miller quoted, noting there’s nothing more shocking to a child than a parent giving away part of a business to children who didn’t help create or build it.

Entire families should discuss transition, urges Mark Mechling, Muskingum County agent.

“Discuss who should be in, who should be out, and how the discussion will go,” he said, noting a moderator is sometimes useful.

“And do it when everyone has time to listen, not at 8 p.m. on a Sunday night or when everyone would rather be doing anything else,” he said.

Prepare yourself. The younger generation should use a test period to figure out if farm involvement is really what they want to do, and use that time to prove their responsibility, creativity, and monetary value, Miller said.

“They really ought to be honest about how they can generate enough money net to justify having them there. It’s never a question of enough work. The question is, is there enough income or potential for income,” Miller said.

Getting a start. “The younger generation will never get started farming if the older generation doesn’t make a sacrifice.

“The younger generation also makes sacrifices to come back to the farm. You can only build your net worth if you’ve given ownership,” Miller said.

(Reporter Andrea Myers welcomes reader feedback by phone at 1-800-837-3419, ext. 22, or by e-mail at amyers@farmanddairy.com.)

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