Winter
2016
Grains
West
36
parents are going to retire—then deal
with the land itself.
Ideally, land transfer occurs over many
years and is done in such a way that it
accomplishes two things: first, allow the
business to remain viable by protecting
its main asset—the land—and second,
ensure all parties are treated equitably.
A non-farming sibling, for example, can
gain income from land by means other
than selling it.
In the Pedersons’ case, Harvey and
Mildred have already started to will land
to their sons and non-farming daughter,
and liquidate assets they don’t need the
income from anymore.
LEARNING TO BEND
Terry knows that the usefulness of the
joint-venture structure can only go so far.
Right now, only one member of the third
generation, his son Brandon, is actively
involved with the farm.
After a few years working for wages
on the farm and demonstrating his
commitment, he entered the joint venture
(now called Pederson HBTRB) in 2010,
assuming five per cent of the income
and expenses, while Harvey went down
to 35 per cent. And, per Harvey’s initial
arrangements with his sons, Brandon
was given use of everything owned by
the joint venture prior to his coming
on board, but assumed his 5 per cent
responsibility on everything purchased
afterward, from seed to combines.
There are other grandchildren who
may or may not eventually come home
to farm. “We do know that, in time,
this joint venture will need to be split,”
said Terry. “As these kids get older, we
can think about what we need to get
in place now to allow this to happen.
We need a succession plan for the joint
venture.”
That kind of thinking is exactly what
Froese would like to see from more
farm families. “The upside of doing the
hard work of succession planning is the
complete relief and the joy in knowing
this farm will continue to thrive,” she
said. “When that happens, there’s no
more distracted management; you can
focus on the business. And you’re having
fun because you’ve all figured it out
together.”
There is no one right way to build
an effective farm succession process,
because just about everything depends
on a family’s particular structure: who
wants to continue farming, who does
not, and the willingness and openness of
the individuals involved.
That means for a succession process to
work, egos must be checked at the door.
Konschuh fully realizes what she is
asking her parents to do—give up a
piece of their autonomy and change
their retirement path so that she and her
partner can get a foothold in farming.
“Allowing someone into your process
can be challenging,” she said. “You have
to be open to possibility and other ways
of thinking. What one person thinks is
a great idea might not be what another
person thinks. There are many ways
to achieve a goal—it’s a complicated
intermix of family and business.”
It comes down to what kind of
relationships you want to build and
maintain with your family members
who also happen to be your business
partners.
“Respect really has to be in there,” said
Terry Pederson. “And we’ve all missed on
that sometimes. We’re not always going
to agree, but if you have to get your
way all the time, don’t do it. You have
to have the willingness to do this for the
betterment of the family, for the business
and for yourself.”
