Farm Succession Planning: A Critical Issue

 

*This is the 2nd in a series written by Guidestone’s AmeriCorps OSM/VISTA member Gunnar Paulsen about Guidestone’s Colorado Land Link events forthcoming in March – the 2nd Annual Land Link Forum and Certified Farm Succession Training.

Across America awareness is growing that we must support the dreams of the next generation of farmers and ranchers if we are to have healthy, economically viable food systems. The lack of capital and the rising cost of farmland have been touted as the two most significant barriers to land access for beginning producers. Yet, too often overlooked are “studies [that] show that over two-thirds of retiring farmers do not have identified successors and nearly 90% of farm owners neither had an exit strategy nor knew know how to develop one” (FarmLASTS Project Exec. Summary 2010).

In the U.S. it has historically been the case that when a farmer or rancher retired, an heir would step up and take over the family business and land. This kept the family legacy alive and was also a way to keep farming affordable for those that chose to pursue it. Yet, as reported in the FarmLASTS Project of 2010:

This traditional succession model of farmland transfer—passing a farm from an older generation to a younger one within the same family through purchase, gift, or inheritance—accounted for only about half of farmland acquisitions in the early 1990s. And in a Wisconsin study undertaken later in the decade, only 20 percent of beginning dairy farmers entered farming by taking over a family operation. It seems that the family succession pattern may be shrinking and alternative paths to farm entry may be increasing in importance.

In addition to this trend, American farming faces another alarming statistic: according to census data over 30 percent of farmers are over 65, and as those farmers retire over the next 15 years, approximately 70 percent of farmland is set to change hands (Kohn and White 2001). This level of change is unprecedented. And farmland isn’t always guaranteed to remain farmland during this transfer. In addition to industrial or residential expansion, Colorado farmers and ranchers face increasing pressure from municipalities to sell their water rights, without which a piece of land can no longer be used for agricultural production.

Many issues must be addressed to ensure the viability and vibrancy of our agricultural communities across Colorado and America, and one tool to address these immediate needs is Farm Succession Planning.

Farm succession planning is a complex process. At the most basic, it is the process of laying out a roadmap that charts the course of passing on land or agricultural enterprises to the next generation without also passing on crippling financial burdens. Considering that inheritance has traditionally been the means of transfer, farm succession planning is a relatively new service. And given the subject matter, engaging the topic is often emotionally and financially complex.

Those are a few of the reasons that support the development of a statewide network of Certified Farm Succession Coordinators who can reach out to families and walk them through this process to ensure their legacy goals are met and that agriculture continues to thrive across Colorado.

To this end, Guidestone has organized a Certified Farm Succession Coordinator Training (CFSCT) to take place March 4-6th at Mt. Princeton Hot Springs Resort in Nathrop, Colorado. This event will be facilitated by the International Farm Transition Network and will provide professionals the tools they need to engage in this emerging and increasingly important field.

Directly after the CFSCT, Guidestone will present the 2nd Annual Land Link Forum with this year’s theme of Farm Succession Planning. The Forum is an opportunity for retiring farmers and ranchers, non-farming landowners, agriculture service providers, as well as the next generation of farmers to learn about all aspects of farm succession. There will be targeted workshops on conservation for landowners, financing opportunities for new and existing producers, and stories from young farmers and ranchers who have secured land tenure, including beneficiaries of Colorado Land Link services.

There’s still time to register for both events; the deadline to register is February 28th. Find more information here.

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