Winter
2016
grainswest.com
33
ERLE GOOD HAS A FARM SUCCESSION
presentation titled, “The Impossible Dream?” That
question mark says it all when it comes to the way
most people feel about, and approach, the task of farm
succession. While it’s most definitely a complicated task, it can
be extremely rewarding and is by no means impossible.
“Look at it from a legacy perspective,” said Elaine Froese,
a certified farm family business coach, conflict resolution
facilitator and a farmer from Boissevain, MB. “What do you
want your legacy to be?”
Most farmers approaching retirement age might say they
want their farms to stay in the family and go on indefinitely.
But accomplishing that feat means letting go sooner, and
that’s where things start to get tough. “One of the reasons
for procrastinating over farm succession is that many farm
managers can’t let go of power and control without having
something more exciting to go to,” said Froese.
And there’s the rub: how do you transfer a business that is
also your life?
Froese and Good, who is a farm
business advisor from Cremona, AB, have
seen that dynamic play out thousands of
times in their work.
“A farm has two pillars, family and
business, and they’re always intertwined,”
said Good. “You are always balancing
the family dynamics with the business
opportunities.”
Both agree that succession planning
and estate planning are different things.
“Succession is the transfer of the
business,” said Good. “Estate planning is the transfer
of wealth.”
However, even that line of thinking still leaves many farm
families feeling overwhelmed by the process. Maybe this
notion is too often missed: that succession is more aptly called
a process than a plan—the latter being a word that hints at
something fixed with step-by-step instructions and an end
point.
A good succession plan isn’t something you do once and
it’s done. It’s something you live. As Froese noted, it should
constantly evolve and be flexible enough to change as
business and family circumstances change. “It’s a journey,”
she explained. “It’s not a quick-fix solution; things are always
evolving and changing. But that can be very exciting.”
MAKINGWAY FOR THE YOUNG
“After this first year, I know we made the right choice,” said
Hannah Konschuh.
In their late twenties, Konschuh and her fiancé, Casey
O’Grady, are at the beginning of a farm succession process
involving her parents, Sheila and Eldon, and the grain farm
she grew up on near Cluny, AB. They both left good jobs with
pensions in Saskatoon to climb back into a tractor and build
their future on the land.
“Before we made the move, we had a lot of conversations
to discuss our respective visions and expectations,” said
Konschuh.
In an industry where stats suggest that farmers are getting
older and not enough young people are stepping into the gap,
Konschuh and O’Grady could be on the leading edge of a
turnaround. “From 1990 to 2000, no one was coming home—
there was no money in ag,” said Good. “But from 2000 to
2015, there has been tremendous income generation. And
what spurs business transfers is economics.”
Relatively recent Statistics Canada figures back up the
point, showing that average total farm sales for oilseed and
grain operations went from nearly $217,000 in 2009 to almost
$400,000 in 2013.
Land values have gone up, too. According to Farm Credit
Canada, the average value of Canadian farmland went up 14.3
per cent in 2014, maintaining an overall upward trend since
1993. In Alberta, where Konschuh and
O’Grady are starting out, land values
went up 8.8 per cent in 2014—a bit of
a slowdown after two years of double-
digit growth—driven largely by higher
commodity prices.
But the couple isn’t thinking about the
price of land just yet. The arrangement
they have with Konschuh’s parents is that
they will rent a portion of the 5,500-acre
grain farm for a two- to three-year period
as a trial to see how a succession process
could work for them. “The equipment and labour are shared,
but we are our own farm entity,” said Konschuh.
She said open communication and setting clear goals have
been key to a successful first year. And, for now, they’re doing
it on their own through regular business meetings. “Very early
on, we all agreed that we wanted to utilize a facilitator,” said
Konschuh. “We thought we’d get through the first year and
pinpoint the challenges that might exist for our operation, and
then bring in a facilitator.”
She’s clear that this is not about conflict, saying that a
facilitator can help all parties redefine their goals, consider new
angles for achieving them and perhaps point out avenues not
considered before. “Some people think you need to bring in a
facilitator to solve major conflicts,” said Konschuh. “But we see
facilitation as an important tool for business planning.”
WHAT ABOUT THE LAND?
At some point, Konschuh and O’Grady will have to start
thinking about buying the land, or at least taking it over in one
form or another.
Herein lies one of the biggest bugaboos of succession: with
land values on an unbroken 22-year climb, how can young
M
“A farm has two pillars,
family and business,
and they’re always
intertwined.”
–Merle Good
