Farm Succession Planning Strategies to Remain Profitable
After his start in nursery and greenhouse production and degrees in biology and rural land use planning, Jim has made agriculture development the focus of his career.
He served as a Cornell Cooperative Extension agent in upstate New York for seventeen years, and was known as the “Voice of Agriculture” on Finger Lakes Radio. Transitioning to technology and farm business development, he’s seen dozens of innovative projects aimed at enhancing the capacity of farm owners and enhancing the economic power of dairy, field crop, fruit, and livestock sectors in the northeast. Granular gives him the opportunity to put his agriculture development experience to work with more than 20 Granular farms in the US and Canada.
How do you define farm succession planning?
Farm succession planning is as important as crop planning, and in many respects it is similar. Yet, farm succession planning, which I define as cultivating growth in the capacity and accountability of a management team to take over, receives far less daily attention. Maybe it just doesn’t feel rewarding, or we don’t see it as important. Or maybe, we just don’t know how to put farm succession actions into place.
Why, and how, is farm succession planning critical to the long-term success of a farm business?
Managers who have led their farms to new levels of success are obligated to ensure that this aptitude will carry on. From accountability areas to asset ownership, farm succession planning puts in place small actions every day to cultivate the professionalism of next set of farm owners. Seriously, every day? Yes. Every day of farm management provides an opportunity to teach, to enable others, and to send a message of confidence to the succeeding team of leaders.
If you are looking for ways to start or improve your farm succession planning, here are five ideas to get you on the right track:
- Organize your farm succession planning activities into three main categories: 1) Transferring physical asset ownership (land, buildings, equipment), 2) Establishing new account ability roles (i.e. delegating specific aspects of management), and 3) Re-assigning business relationships (e.g. updating the point of contact with customers, renters, suppliers, etc.)
- Avoid delegating responsibility without giving authority. You can’t expect a junior manager to be responsible for crop decisions if the decisions have to be approved by a senior manager or consultant. Reward responsibility with accountability and authority. If a succeeding team member does not have the authority, do not expect them to succeed with the responsibility.
- Record what you do. Management activities should be fully sharable and traceable. Tools like Granular can make sure that your land agreements, equipment data, inventory, field activity, regulatory and historical who-was-doing-what records are all in one centralized, secure, and disaster-proof place. The onboarding process for these tools is often a way to orient and introduce the fine details of farm management to a broader team.
- Look beyond family members to your overall farm team as possible future leaders. Many farms have benefited from fresh blood and better perspectives in a new hire. Adopt a business structure that allows non-family employees to ascend to earned ownership and leadership roles, even while certain family employees remain in lower-level positions.
- Every day, act to ensure the results of your sacrifices and decisions will be sustained. Do one small thing every day to cultivate growth in the skills and accountability of your younger potential management team. Make sure the next farm generation is better prepared than you were when you took over.