3 Ways Technology Makes Succession Planning Easier
Katherine Carter, Granular’s VP of Customer Success, weighs in on three ways digital solutions help farm families navigate farm succession
In my work overseeing Granular Customer Success, I often hear stories of frustration, stress and worry that impending farm transition poses to almost every farm operation. I want to help every time.
Family farms aren’t just a family-owned business. They are the family home, the family legacy and the heart of the family itself—an unsuccessful transfer of the farm from one generation to the next risks all of that.
A former farm kid myself, I give our Granular customers the advice I wish I had known before my family went through a farm succession event: go digital. There is no better mechanism for setting the stage for a successful transition experience than the insight that digitizing your data provides.
Why is Creating a Family Farm Succession Plan So Difficult?
Everybody knows it’s coming — death, taxes and farm succession. Nobody wants the family farm to fail. So then, why is it so hard to hash out a viable plan to get through the inevitable farm ownership transition?
A Farm Journal survey found that 80% of farmers plan to pass the farm on, but only 20% were confident succession would succeed and the farm would survive. An Iowa State University study found that only 50% of U.S. farmers have an estate plan, and 71% of retiring farmers did not have a designated successor. In Canada, the 2016 agriculture census found that only one in 12 farm operations has a formal succession plan outlining its future transfer to the next generation. Meanwhile, farm owner-operators keep getting older. The last U.S. census revealed the average age of farm owner-operators is 59.4 years old.
The emotions involved in transition discussions combined with a lack of reliable information about the farm business can quickly evolve into a contentious situation. Without data and information to approach a problem, it’s only natural to rely on emotions and opinions. That’s why digital tools are so crucial to creating a foundation to build farm transition decisions upon — data doesn’t have a horse in the race. It’s just information.
As Granular’s Customer Success team works hand-in-hand with our farmers helping them to integrate digital tools into their businesses, we commonly see three ways digital farm management software tools are sparking succession discussions and helping families navigate the oftentimes rocky path of farm transition.
1. Digital Tools Capture Institutional Knowledge
When my family farm was going through a succession phase, the first thing I realized was how little I knew about how our farm operations were managed.
It wasn’t anybody’s fault. I was too young or in school when management decisions were made, or when certain tasks were completed (like crop protection). Despite having spent many hours working in the office with my mother and summers helping to harvest our crops, I knew little about how our farm was run overall; I had only been privy to portions of it.
Not understanding why the older generation made specific decisions can become a stumbling block when the next generation takes over. Conversely, because they do have the “institutional knowledge,” the older generation worries they can’t step back from farm management. An easily avoided mistake could risk the entire farm operation, and the last thing parents want to see happen is their children fail.
Farm journal logs and dirty notebooks in the pick-up glovebox are interesting nostalgia pieces but not very useful for gleaning data insights and far from a complete picture of the entire farm operations. Digital tools, on the other hand, can record everything about a farm operation — even what seems to be mundane can be important — and preserve it in an easily accessible and safe manner (aka the cloud!) for generations to come.
2. Digital Tools are an Objective Way to Analyze Change
Data analysis creates an objective way to evaluate changes, an ability crucial to successful farm succession planning.
We can now analyze operational and financial changes at a deeper level than farms have ever been able to do before. Overlaying digitized data from all aspects of a farm business (agronomy, finance and market) and visualizing scenarios reveals insights that with pen and paper or spreadsheets took more time than most farmers had available for the task.
Debates over new ideas are no longer an argument between the “old way” of doing things versus the latest “new thing,” but an objective, unified look at the operation’s strengths, weaknesses and potential. In the end, the same result is achieved — a more viable farm business. But when it comes to effective farm management, how the decision was made is just as important as the actual decision itself.
3. Digital Ag Can Equal More Possibilities
One of the hardest parts of farm succession is figuring out how to “slice and dice” the current farm between different heirs.
Could the farm make changes now — invest in more land or a new venture — allowing it to support more families than it currently does? With data as a guide, the family can work together as partners in the decision-making process.
Digitizing your operations can also create equity between different aspects of the farm management. Perhaps brother has traditionally handled the field decisions and sister has been in charge of the office. But because the office was mostly just a place to drop off receipts, sister ended up feeling under-utilized and not involved in the farm operations. With digital tools, that dynamic shifts. The office can now monitor market changes, organize workloads, keep an eye on the budget, and spot real-time profitability opportunities that they can coordinate with the field-side operations.
Suddenly, field and office become equally important to the farm’s bottom line, shifting the management dynamics and building a more profitable business that utilizes all the talents family members can bring to the table.
The Sooner Your Farm Goes Digital, the Better
There’s a thing folks say about planting trees —
“The best time to plant a tree was 20 years ago. The second-best time is now.”
I feel the same way about adopting digital tools. The sooner you begin capturing and analyzing your data, the better baseline of information your family will have in guiding your farm succession decisions.
Data science’s power is in its ability to capture information over time and use machine learning to uncover insights and reveal patterns from that data. The more information you have, the more powerful and accurate the insights are. Imagine in 100 years your grandchildren (or great-grandchildren) evaluate their farm management decisions using decades of data specific to your family farm to guide them. That’s a gift.
Many members of Granular’s Customer Success team grew up on farms and now we are helping other family farms transition their businesses to digital, drawing from our own experience to help others have an easier time preserving their legacy.
No matter which side of the farm succession table you are sitting at — looking to let go or hoping to take over — the sooner your farm goes digital, the better situated your family’s future will be.
Stay in the know!
Subscribe to get new blog posts sent straight to your email