Is a family farm arrangement in your future?
Throughout my years as a secondary agriculture instructor, there have been many discussions with students about their future. Many of those students wanted to work in production agriculture on the family farm, but not every person that wanted to go home and farm could.
How do you know if a family farm arrangement will work? I found an Iowa State Extension publication “Getting Started in Farming: On the Home Farm” and some of the ideas in the publication are worth sharing.
Iowa State recommends “making a complete appraisal of all aspects prior to initiating a family farming arrangement.” This appraisal determines the potential of a family member joining the current operation. By all parties putting their thoughts on paper and discussing them, it can possibly save dollars, personal heartache, and strained family relations.
The established farming/ranching generation needs to consider the following questions:
1. Do we still have minor children at home to be cared for and educated?
2. What is the likelihood that one or more of these children will want to farm in the future?
3. How much income do we currently spend for family purposes, and how will this likely change in the years ahead?
4. How many more years do we plan to actively participate in the farm business before retirement?
5. How hard do we want to work in the farm business operations in the years ahead?
6. What are the personal, business, and financial goals for the future?
7. Are we willing to totally disclose all aspects of the financial situation with our family?
The younger generation needs to consider these questions:
1. Why do I want to farm with my family?
2. What can I bring into the home farm business in terms of interests, experience, education, finances, and other resources?
3. How well do I get along with my family in personal matters?
4. Can I talk openly and frankly with my family?
5. If married, does my spouse like and get along with the rest of my family? How does my spouse feel about the possibility of farming with my family?
6. What are my (our) goals in life? What do I want to accomplish professionally, personally, and financially?
7. Are my intentions to eventually take over the home farm, or is it just a way for me to get experience, land, and financial stability until I can become established on my own?
8. Am I willing to gradually mature into acquiring more managerial responsibilities, or do I want to become “boss” immediately?
9. How much income do I believe I will need for family purposes?
10. Am I willing to make the sacrifices, compromises, and extra effort to make the family farm arrangement work?
It is also essential to know the goals and future aspirations of nonfarming brothers and sisters or other potential heirs. The fact that most parents want to treat all the children equally with respect to inheritance provisions can sometimes be devastating to the farming family member unless provisions are made well ahead of the death of one or both parents. If personal, business or family goals are not compatible, it is best to know it before a formal agreement has been drawn up. As the average age of farmers/ranchers increases, these types of questions need to be discussed by families in transition.
If any producer would like more information on farm management and records, the SD Center of Farm and Ranch Management can help. To contact the SDCFRM office or any of our instructors, call 1-800-684-1969 or email us at firstname.lastname@example.org.