SASKATOON — Producers who can figure out how to use complex machinery or adopt new ways to grow crops don’t know how to talk to their own families about what will happen to the farm when they retire.
Parents often put off succession planning because they fear the hidden conflicts it will bring to the surface, said Bob Tosh, farm and family enterprise consultant with MNP in Saskatoon.
“They probably are fearful of opening the lid on Pandora’s box, having to address issues of relationships, issues of confidence in abilities, issues of estate planning, and the dreaded fair-versus-equal questions.”
Only about one in 12 farms tallied in 2016 by Statistics Canada said they had a succession plan, even as the average age of producers increased. The value and complexity of family farms on the Prairies is also rising, said Tosh.
“It’s not hard, honestly, to get north of $5 million, very typically north of $10 million … it’s a tough problem that farm families are only just beginning to realize that they have to address, and it’s because the values have increased considerably.”
ven as farm families enter a futuristic new era of precision agriculture involving things such as artificial intelligence and data gathered via satellites, little has changed when it comes to sitting down to create a succession plan.
“The challenge has been the same because the challenge is 99 percent communication (with each other),” said Tosh. “And it tends to be poor communication, which leads to conflict.”
It isn’t just farm families that have trouble with succession and who controls what. Witness the recent dispute dividing the family that owns Rogers Communications Inc., a Canadian communications and media giant whose boardroom battles have been compared to a Shakespearean drama.
“The scale is slightly different, but the challenges of Dad letting go, facing the next generation to manage assets, estate planning, sibling rivalry, you name it, all of those play out in the same way on a family farm as they do in a large family-owned corporation,” said Tosh.
Lesley Kelly and her husband, Matt, are part of a 7,000-acre family farm south of Saskatoon that includes her mother and brother. It also included her father, who recently died from cancer.
They started succession planning as five individuals “that had different ideas and opinions and goals…. My husband and brother and myself, we were talking about what land we were going to buy and all the equipment, and our goals of expansion.”
However, her father instead offered some advice.
“My dad said, ‘If there’s one thing I’ve learned… it doesn’t matter how much land you have, or the type of equipment you drive, it’s about how we’re going to take care of each other and ourselves.’ ”
It provided a solid foundation for everyone to “start to dive into the succession because then we focused on building that mission statement and that vision and really getting to understand each other outside of the business,” said Kelly, who is an advocate for farm mental health.
Tosh said there’s a reason why farm families can have difficulty communicating with each other. Compared to employees in a city office building, “if you think of a farm family, they work in isolation,” he said.
“They aren’t exposed to the same kind of workplace demands, which require politeness … and remember also that they’re often conflict avoiders or accommodators, so again they tend not to deal with conflict early on and they just let it boil, and of course that leads to a worsening communication situation.
“There’s plenty of opportunity for them to not talk to each other because they can drive off into the other field.”
Kelly said the three related families on her farm decided to instead take the time to start learning about each other’s fears, sitting down without any phones or distractions as they talked about each other’s world.
It was at that point “when I really understood the stress that my mom and dad were facing having to retire from the farm, and learn a whole new routine and world and identity,” said Kelly.
“And hearing my brother who unfortunately came across a tragic accident and was living with PTSD, and the anxiety that caused, and then my husband was going through some mental health challenges, too.”
It helped bring them together.
“We just learned about each other and what our visions were for the farm, and then we developed also a culture because we knew we were going to have arguments, we’re going to have disagreements, and we always wanted to have open dialogue and to keep the communication going.”
They developed a set of 14 principles to help guide how they treat and communicate with each other and their employees.
“I would say that was probably one of the best things that we did on the farm; that set our direction.”
She now wishes they had “talked about the hard stuff even earlier, because we each kept that in and that’s a huge weight to carry… you’ve got to talk through it, or those can of worms are going to be left for someone else to figure out, and I wouldn’t want to do that.”
Kelly said it’s heartbreaking when disputes over farm succession cause families to never speak to each other again “because farming is such a great career and livelihood. You work so hard to build something up and stuff like that can get in the way.”
As someone who has helped create hundreds of succession plans, Tosh said the first step is to find an adviser who won’t give you an answer, “because professional advisers who give answers are giving their answer, not necessarily the family’s.”
Farm families need to instead establish a fair process, rather than trying to get a fair outcome, because everyone’s going to have a different version of what a fair outcome should be, he said.
However, a process that ensures all family members have an opportunity and a voice doesn’t mean creating a democracy in which Mom and Dad have given up control, he added.
It instead means that everyone has “engaged in the process and been part of it and understand why decisions have been made,” he said.
“And they can then also start putting structures in place that will give them the best chance of success, depending on what their situation looks like.”
Although there are many different potential approaches and steps in the process, one option is to go through a discovery phase to find out what people are thinking “if the desired outcome is both family harmony and the transition of the farm to the next generation, because they’re paradoxical.”
People are seeking “the answer,” but there isn’t one because the family is often pulling in one direction and the business is pulling in the other, said Tosh.
“There’s a path they have to pick… and so it’s balancing the needs of the farm versus the needs of the family.”
It isn’t so much a negotiation as finding a level of compromise that allows people to improve their communication so they can navigate a way through, “but with a stated goal in mind, they at least have a direction they can travel,” he said.
“They can’t necessarily deal with every curveball they get thrown along the way, but if they have a clear direction and a clear goal, then they have something to aim at.”