Who can implement this: County officials, governmental organizations, and advocacy organizations
According to the U.S. Labor Department, the average age of a farmer or rancher is 58 years old, an average that is gradually increasing.  The average age of U.S. farm operators increased from 55.3 in 2002 to 58.3 in 2012 according to the Census of Agriculture. In addition, the University of Vermont’s FarmLASTS Project estimates that 70% of the nation’s private farmland will change ownership within the next 20 years. The future of farming is in question because fewer individuals are choosing farming as an occupation than before and an increasing number of young adults are pursuing careers other than farming and ranching. Proper succession planning helps ensure that people are available and ready to take over a farm’s business when its owners retire.
Succession planning is the process of formally transitioning management and ownership of an agricultural business from one generation to the next. Since individuals’ relationships and situations vary, there is no single plan that can be used by every family or business. Some examples of plans involve an outright sale of the family farm to the younger generation (or to a third party), rely primarily on passing down lands to other generations, or involve forming businesses to help make a transition possible in the future or dividing a large operation into smaller, discrete parts to support different families.
Succession planning permits a farming family to transfer management and ownership of their business in the way they want. It also encourages the family to address legal, tax, and family issues in advance (when they are best prepared), rather than being forced to deal with them quickly after the death of the farmer or rancher.
Preparing farm operations for those who will take over ensures that the next generation will be able to continue Utah’s farming legacy. Many small family farms don’t have clear plans in place to guide a future transition in ownership. Not establishing clear succession plans or identifying potential candidates to take over farm operations can result in farms having no heirs, farmers being unable to retire, and agricultural land being sold for other uses.
- Utah County, the Utah Department of Agriculture and Food, and private organizations should offer training and outreach to educate farmers on the details and challenges of transitioning management and ownership of farmland to different generations.
- A list of important steps for succession planning might include:
- Defining goals and objectives: Do farmers want to pass along the entire business and its assets, or do they want to lease the land?
- Identifying potential successors and creating a timeline for succession
- Scheduling meetings with advisors (an attorney, accountant, financial advisor, exit planner, etc.) to discuss how to implement succession and to finish estate planning
- Creating plans for the business and for retirement
- Forming appropriate business entities and creating legal agreements such as an operating agreement and a buy-sell agreement
- Establishing a plan for training successors and transitioning ownership
- Communicating throughout the planning process and making revisions and adjustments as needed
The New Jersey Department of Agriculture consolidates many farm-transfer and succession-planning resources for its retiring farmers.
Pennsylvania has a Preserved Farms Resource Center dedicated to succession planning. The center helps retiring farmers connect with younger generations of farmers and helps new farmers establish themselves within the farming community.
Iowa’s Ag Link Program connects beginning farmers who need agricultural lands to retiring farmers who do not have heirs or successors. This program is a powerful resource for retiring farmers and allows communities to more easily maintain agricultural lands across generations.
Utah State University as well as private organizations like the Farm Bureau Financial Services assist farmers in transitioning management and ownership of agricultural businesses from one generation to the next.