Part three in our Sibling Squeeze series looks at Andrea’s story*; who has been farming alongside her parents for three years. On top of the day-to-day farm work, she’s been investing in the large grain operation by introducing and running new management systems, taking courses to learn more about marketing crops and has invested financially in the expansion of the farm’s grain storage.
Recent conversations between her brother, Rob, who isn’t actively involved in the farm and who lives off the farm, and her parents have left Andrea with the impression that her brother is weighing in on farm management decisions and wants the farm to be managed his way in an effort to preserve it for his own kids. This has Andrea worried that she will be overlooked in any farm transition and “squeezed out” by her non-farming sibling despite all her work and obvious effort to grow the farm business.
Darrell Wade, founder of Farm Life Financial Planning Group and a farm succession specialist, offers his advice for managing this sticky sibling situation.
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“Too often expectations or assumptions are made, and it sounds like this farm family needs to come together and start having some clarifying conversations,” suggests Wade.
He says these disconnected views of farm management and ownership need to be addressed, sooner rather than later.
Wade says it’s important that this family come together to create a unified vision for the future. “This will allow everyone to feel involved in the process and have a voice,” he says.
“An initial discovery session with each individual and then with the entire family can help them navigate this process. Establishing family values will also help remove assumptions and create unity within the family.”
He also recommends the family create a farm business plan that includes an outline of who is involved in the business and on the management team.
“They need to establish who is responsible for each role, the impact they create as individuals and as a farm family and even consider conducting a SWOT (strength-weaknesses-opportunities-threats) analysis to help clarify where resources should be allocated.”
Wade says this farm family should also build governance into their business structure, noting that the process of creating formal agreements will force additional communication among shareholders or siblings and remove the “what-ifs” that create unnecessary tension, like worrying about being squeezed out.
“This process also allows families to create their own decision-making framework that clarifies and streamlines business operations,” he says.
Lastly, Wade suggests that to maintain family harmony it’s important to communicate often and come together to celebrate achievements regularly. “This fosters and supports a healthy family dynamic.”
In the next instalment of this series, we look at the case of brothers Eric and Matt, both of whom are dependent on the farm for their main source of income. But years of drought have created a tight margins situation, and from the beginning they’ve never agreed on the farm’s financial priorities. With increasing external pressures such as market fluctuations and ongoing weather challenges, day-to-day management discussions have become tense, and their disagreements are beginning to affect their relationship and overall family harmony.
Watch for it in the January Tech issue. CG
* This family and case study are fictional.
