5 Succession Planning Mistakes to Avoid

Fri, 28 Jul 2023 14:06:39 GMT

It’s time. You need to finally make your farm’s succession plan a priority. As you take a first or second or 20th step in the process, shoot to avoid some common landmines.

“Although there are a lot of scary stories out there about succession planning, there’s actually way more positive stories,” says Rena Striegel, president of Transition Point Business Advisors based in Des Moines, Iowa. “I encourage everyone to become one of those positive stories. Take that first step or break through the roadblocks so you can be one of those success stories.”

Listen in as Striegel discusses succession planning with Andrew McCrea on the Farming the Countryside podcast :

Here are the roadblocks Striegel sees farmers commonly face.

You engage only one professional.

“Our philosophy is a farm needs to have a collaborative team of professionals that helps them with the decisions and discussions around succession planning,” Striegel says.

This team can include a CPA, lawyer, business adviser, banker, insurance professional and others. By having all these viewpoints at the table, you ensure your plan is comprehensive and meets your goals.

“I personally do not believe any one professional can come up with a succession plan independent of the other professionals,” she adds. “We encourage farm families to work with their team to develop and implement their transition plan.”

Your plan is driven by tax implications.

Taxes, of course, are a big concern for farmers, especially with the new tax policies coming out of Washington, D.C.

“But if you do succession planning with the sole intention of reducing or eliminating taxes, you actually miss a lot of really valuable tools you could be utilizing if taxes were not the major goal,” Striegel says. “What we try to do with farm families is identify the true goal of the family. Almost always the goal isn’t: I want to transition in a tax-effective way. Most of the times it’s about making sure that my operation stays viable, multiple families can support themselves or the farm is going to be here for future generations.”

You ignore the elephants in the room.

Succession and transition discussions are stressful. Most of the time, they will include several topics you’d just rather not talk about.

“We don’t want to talk about someone dying,” Striegel says. “There’s a lot of things about these conversations that make people feel really uncomfortable. And so oftentimes, even families who communicate well tend to have a hard time being really open.”

If you fall into this category, Striegel suggests working with a mediator or facilitator to help ease the tension and encourage honest and focused communication.

You don’t draw lines between being a family and a business.

“The thing we have found that has really helped farm families is when we can separate the family dynamics from the business itself,” Striegel says. “We try to help families understand when conversations are business discussions versus family discussions.”

In having clear lines between family and business conversations and decisions, she says, you can remove some of the emotional pieces from the equation.

“When we separate those a little bit, it does make it easier for farm families to be able to communicate and make decisions together as a group,” Striegel says.

You procrastinate, procrastinate and then wait a little longer.

The worst option for farm families, Striegel says, is waiting until your farm or family is at a breaking point before seeking help. Don’t wait until a family member is threatening to leave the farm.

“Oftentimes when the family fractures, so does the farm,” she says. “If you think that you’re going to need help, it’s far better to seek that help out and bring those resources in to preserve your family relationships. Wherever you are, today is the day to start.”

Want to jumpstart your succession plan? The DIRTT Project by Transition Point Business Advisors is an all-inclusive guidance plan to help you transition your farm business. Learn more.

Ag Leaders Urge Labor Reform in Historic Hearing of Judiciary Committee

Thu, 22 Sep 2022 00:55:28 GMT

U.S. agriculture is suffering from a labor shortage that could increase production costs and consumer food prices if not addressed through visa reform to provide better access to the foreign-born workers on which it depends, explained National Pork Producers Council (NPPC) President Jen Sorenson before the Senate Judiciary Committee hearing, “Immigrant Farmworkers are Essential to Feeding America” on Wednesday.

“During this pandemic we’ve all been forced to face the reality that our food supply chain depends, to a great extent, on the labor of immigrants. In every step of the food production process, from the moment a crop is planted to the moment our grocery bags are handed to us, there’s an immigrant worker who plays a critical role in feeding our families. Their work is essential and it’s never easy,” said Sen. Dick Durbin (D-IL), chair of the Judiciary Committee.

Historic Testimony
For the first time in over 20 years, the U.S. Secretary of Agriculture testified before the Judiciary Committee on the importance of farmworkers in the U.S. Vilsack said there is an estimated 2.5 million farmworkers, half of whom are undocumented.

“Our immigration system does not work for them and, thus, does not work for our farmers. As Secretary of Agriculture, I have met farmers and ranchers across the country who worry that our immigration system is broken and continually feel the consequences. They struggle with the uncertainty of the labor force from harvest to harvest, worrying they will be unable to find farmworkers to keep them in business. This kind of instability jeopardizes our farmers’ ability to be competitive, puts in question the security of our food supply and has repercussions on our overall economy,” U.S. Secretary of Agriculture Tom Vilsack said.

He described a discussion where the New York Farm Bureau president and a Vegetable Grower Association representative in New York shared they put out an advertisement for additional farmworkers and they didn’t get a single response.

“Not a single person responded to the ad for additional opportunities to work in this industry. It is clear this industry is dependent on immigrant workers. There are numerous examples of situations where requests were made for U.S. workers to work in these jobs and there was very little response if any,” Vilsack said.

This is a reoccurring story, Vilsack added. It’s replayed every day in packing plants, in fields and on farms.

“Immigrant labor comes in and does the difficult, challenging work that the rest of us are not interested in doing,” he said. “They do it well and they have the notion of being able to supply opportunity for a better life for their family. They care deeply for their family, sacrificing, working hard to make sure their families have a better life. We need to figure out something that allows them to have this connection with their family that the rest of us have every day.”

Stop Kicking the Can Down the Road
Vilsack applauded grower groups and unions for coming together and reaching a compromise and supporting the bipartisan Farm Workforce Modernization Act of 2021, which passed out of the U.S. House of Representatives on March 18 with a vote of 247-174.

“This legislation provides farmworkers – many of whom have lived in this country for years – an opportunity to earn citizenship,” Vilsack said. “With legal status and a path to citizenship, farmworkers would be able to earn higher wages and exercise their rights under our labor laws to demand better working conditions.”

Shay Myers, a vegetable grower in Oregon, testified before the Senate Judiciary Committee and strongly urged action on the Farm Workforce Modernization Act, which he said must include Green cards for those who keep America fed and consistent access to labor for farmers through H-2A visas.

“Let’s be honest with ourselves, the last 36 years of policies and political failures have led us here. Now is the time to act. It’s not ethical, it’s not economically viable and it’s not safe to kick this can down the road yet again,” Myers said. “I urge USCIS to process H-2A petitions much faster to meet the needs of farmers, and I urge Congress to reform the H-2A and H-2B visas to better serve our food supply chain.”

Year-Round Access to H-2A Visa Program
U.S. pork production is a year-round effort, requiring a hardworking and dedicated workforce on farms and in processing plants.

“Pork producers offer jobs with good pay and benefits, but most Americans do not live near hog farms or harvest facilities and rural populations continue to decline, causing the U.S. pork industry to be largely dependent on foreign-born workers,” Sorenson explained.

“Current visa programs designed for seasonal agriculture — such as the H-2A visa — fail to meet the workforce needs of U.S. pork producers and other year-round livestock farmers. Now more than ever, we need a dedicated, year-round workforce,” Sorenson told the committee.

If not addressed, she said the labor shortage “could lead to farms and packing plants shutting down, causing serious financial harm to the communities in which they operate. As a result, pork production would be constrained, leading to higher food prices for consumers and the United States becoming an unreliable trading partner for the many countries around the world that rely on our pork.”

NPPC is advocating for year-round access to the H-2A visa program without a cap. Legislation passed earlier this year in the U.S. House would offer a capped number of year-round visas.

“While NPPC believes the bill is a step in the right direction, a cap will force different sectors of livestock agriculture to compete against one another for the same limited number of year-round visas. In that scenario, no one wins and, ultimately, the consumer will be punished with reduced pork supplies and higher prices at the store,” Sorenson testified.

Read More:

Ag Labor Reform Hearing to Address H-2A Visa Program

One-Fifth of President’s Recent Executive Order Impacts Agriculture, Draws Mixed Reaction from Farm Groups

NPPC Calls for Labor Reform, Seeks Changes to H-2A Visa Program

New H2A Wage Rule Ensures More Stability for Farmers