At the Commodity Classic this year, we hosted a panel discussion to talk about succession planning. The room was packed. I guess that means a lot of farmers are looking for ideas and help in making a successful farm transition.
Farm Futures Senior Editor Bryce Knorr started things off by presenting the survey research he's done with farmers about succession planning (see p. 28 April 2013 issue). Bryce found that only 30% of farm families have a written succession plan.
In most of those families, they only have the legal documents – like a will or trust. For most farming operations today, that's not going to be enough to make sure the farm continues as a viable business.
Many farmers have already done a good job of making sure that the farm's assets will be transferred and protected. But that's where a lot of succession plans stop short.
Bryce's research shows that most farm families don't have a plan to transfer the business knowledge of the farm to future leaders. That includes things like what will be expected of the successors, plans to educate successors on the details of the operation, and benchmarks and timetables for the transition.
Of the 30% of farm families who have a written succession plan, only about one-third of them have plans in place to transfer farming business knowledge to the next generation. And most of the time, it's mainly just the older generation explaining: here's how I do this, these are the suppliers and vendors I deal with.
With all of the changes in farming, the kinds of skills the next generation will need are changing rapidly. What the next generation needs to know in tomorrow's farming environment may be quite different from what made the older generation a success. There's a lot at stake.
Bryce pointed out that only one in five farm operations is helping the next generation of leaders get professional or outside training in the business and management skills they're going to need to be successful. As farming continues to become more complex, this kind of training for the next generation is a big deal.
You can watch a short video here of Bryce presenting his succession planning research during the Commodity Classic panel. Then think about how this applies to you.