All across the country, farmers puzzle over it. Farm leaders strategize and vocalize about it. Even politicians get involved. Yet despite all the concern and all the programs, the situation doesn’t seem to change. Few young people see a future in farming, and even fewer see any realistic way that they could get their start.
Quietly on Canada’s East Coast at Oak Lake Farm near Bridgewater, N. S., meanwhile, two families decided to go their own way, participating in an experiment in trust, mentorship and commitment to the continuation of a dream.
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I learn about the story first from Elspeth Mclean-Wile. She and husband Peter have milked cows for over 30 years on a picturesque small farm on top of a drumlin at the edge of Wiles Lake, in the small community of Wileville.
Peter’s 87-year-old father farmed here, as did his grandfather before that. It’s a farm that has demanded shrewdness, resilience and backbone. The area isn’t ideal for dairying. There’s a reason why it’s better known for the Bluenose and fishing, but, Elspeth says, “we grow terrific pastures and we always followed a system of intensive grazing using natural pastures and ryegrass. There’s always a silver lining!”
Pride fingers the edges of her businesslike description of their farm and the work that it has taken to make it a success. But the couple has no children and after 30 years of 4 a. m. mornings, Peter was ready to retire from the dairy.
“We always said if we were going to transfer the farm to another generation we would have to be creative about it,” Elspeth says.
That’s even more true since the Wiles hoped to sell the cows and quota, but remain on the multi-generational farm. In order to have someone take over the dairy operations alone, says Elspeth, “we had to think about cash flow and about making it work for the buyer.”
Enter 31-year-old Andrew Morine. Andrew grew up on a nearby beef and forestry farm but had become an electrician
by trade. “I always wanted to farm,” he says. “But beef wasn’t going to pay to raise a family and have a good income.”
Andrew had been considering dairy and took special notice when quota prices plummeted in 2007. He went to see Peter (“the most prominent dairyman in the area,” Andrew says) to find out about the industry and his chances in a sector notoriously expensive to enter.
“We weren’t out looking, but the opportunity came,” Elspeth says. The Wiles wanted to ease out of the industry and Andrew needed time to acquire the skills and equity he’d need to own a dairy. It sounded like the beginnings of an opportunity, and with innovative thinking and relationship building, that opportunity became an agreement.
Creating time to build equity
“We were set up to do it quite easily,” Elspeth says. “The milk cows and quota were in a separate corporation. Andrew bought 80 per cent of the shares and Peter kept 20 per cent to be bought after the five years. It gives Andrew time to build equity.”
Through the agreement Andrew also leases buildings, equipment and land for those same five years.
Though it was relatively simple in terms of structure, “it wasn’t an easy way to sell it,” Elspeth says. If the couple had sold the quota on the exchange and the cows to the highest bidder, they’d have had cash in their pocket and the farm intact. “But we didn’t want to exit that way,” she says. “This way we are taking five years to ease out. And it might mean 30 years of herd genetics can continue.
“There is some sentimentality of course,” says Elspeth. “But overall it was a business decision.”
There is something else afoot here. It’s in Elspeth’s voice. She and her husband care about the dairy industry they’ve been so involved in, about the community in which their family has such a long history, and about their cows. Their sale agreement reflects that commitment by ensuring the operation stays local and viable.
They also needed to know Andrew was committed as well. “It came down to the day we signed it over,” Elspeth says. “If he wanted to back out he could have. It wouldn’t have been the end of the world because we could just have continued on. It was really important that he was sure.
“I wouldn’t want to speak to it as a success just yet because there are still four years to go in the agreement,” she says. The Wiles will have to watch as the milk truck comes through their yard and wonder if the pickup is what it should be, and sit back as Andrew learns to manage. And they are still owed a substantial amount of money. “This is a very risky situation for both of us.”
Andew agrees. “If you ask anyone in the business, they’ll tell you, you can buy quota or you can build a barn, but you can’t do both.” While his father has helped back the loans through his own farm, Andrew is well aware of the challenges he will face. “My biggest risk is what happens after five years. These first five will probably be my easiest. I know where I’m at, things are in place. The next step is going to mean another major investment because I have to buy or build a dairy barn and purchase equipment.”
But getting through the first step was by no means easy. Both Elspeth and Andrew were obviously frustrated by the excessive time it took for the agreement to come through, and they stress the importance of engaging the right lawyer and accountant.
Andrew hired an experienced agricultural accountant to draw up a firm proposal for his lenders. “When I hired the accountant, it was the right person for the job. I didn’t do the same with the lawyers. They weren’t familiar with agriculture or with the business world.” Morine’s lawyer fees were over three times what he’d budgeted. “I should have found a corporate lawyer right off and paid more per hour and it would have cost me less.”
The deal took many months to complete, leaving Andrew wondering at his decision. He had quit his job to milk with Peter, which “was OK,” he laughs, “because I had to learn anyway, but as it dragged on money became an issue.” He reached a point where he almost reconsidered his decision. “It also created a kind of tension between us because we didn’t know who was holding up what.
“My advice is to find a really, really good accountant who specializes in business transfers,” Andrew says. Elspeth is equally adamant on this point: “Don’t diddle around. You need a corporate lawyer with expertise. They don’t need farm experience. Do not scrimp on paying for really good legal and accounting.”
Insist on effective lawyers
Many people feel they want to support local firms, but smaller ones simply may not have experience in business transfers and sales. “I can’t emphasize enough that you need to find someone who will ask the hard questions. Can you live with the money you’re getting up front? What do you want to do with the rest of your lives? What about the farm? Do you have a plan for the next five years?… You need the kind of person who will ask the questions and understand your story.”
That person might be an accountant, a lawyer, a business consultant or an agrologist. What’s important, says Elspeth is that they see the human side of the decision as well as the business issues. “This is why we liked our adviser so much,” she says. “He knew the business issues but also understood the dynamics of a family-owned business and the implications for the selling partners.” (see sidebar)
After eight months of working with Peter while the deal was
finalized, Andrew took full responsibility for the operation. Along with learning to manage his 60 cows, grow feed for his herd and care for calves, he also became a first-time father when his wife Nikki gave birth to their daughter Paige.
On top of learning to be a parent, he was thrown his first dairy management challenges. “It started out rough when I took over,” Andrew says. Nutrition issues, followed by complications as he learned to breed AI caused a heavy drop in milk production and a shortage of bred cows that interrupted his fresh cow cycle.
Since then he’s changed nutritionists and the bred cow cycle has caught up “so the next nine months look good,” Andrew says. “I certainly made mistakes but I learned from them.”
He’ll have to. Echoing the experience of farmers across the country, Andrew cites one of his biggest challenges over the next few years as becoming a better business manager. “I have to make more time to do this and to learn about it. I didn’t know it would be such a huge part of what I do.”
Though Andrew didn’t actually request it, Elspeth and Peter offered their advice and management expertise as part of the agreement. Elspeth says, “We are confident that he wouldn’t have secured financing without our presence in the deal. Andrew had no experience in dairy and was seeking a very large loan. Lenders need to feel comfortable with the management expertise and the agreement ensured that was behind the deal.”
This kind of commitment to hands-on mentoring may be rare, but behind it is the simple goodwill and desire of experienced farmers to share their expertise, to show the next generation how it’s done, and to support an industry.
Still, Elspeth wouldn’t say mentoring is for everyone. “It’s a big risk. Are you willing to commit to that mentoring? Peter is good at that kind of thing.” She laughs. “I know myself too well. It’s a good experience, but to observe it is to know that I wouldn’t do it myself.”
The Wiles have a lot of expertise to share. For the past 25 years Elspeth has been the driving force behind the couple’s other enterprise, Wiles Lake Farm Market and Bakery, an outlet for Nova Scotia-grown produce, including their own. They are currently working on an expansion to the farm market and greenhouse to be finished when the season begins again in March.
Andrew learned the ropes over the time the agreement was being crafted. Since then he’s had occasion to ask for Peter’s input and Peter will give advice if he believes Andrew might be overlooking something. But Andrew has also sought help from a larger mentoring community. He networks at provincial dairy meetings and says “many professionals have helped as well.” He refers to the seed salesman who provides information on cropping and spraying his corn, local agronomists, his vet and a private nutritionist he’s hired.
In four years Andrew will decide where to relocate the dairy. “I have my father’s farm to move to, but in the meantime there are other considerations. I think we’ll stay in the area,” he hesitates. “But what is really pulling us away is that this is not the best area in the province to farm. And our land is spread out which will mean extra costs. We’re asking ourselves would we rather be in the valley, in Nova Scotia’s main agriculture area?”
While busy with their farm market and bakery, the Wiles have the same four years to decide what they will do on the home farm when it no longer houses a dairy. Once again, Elspeth says, “it will require a creative solution.” CG
finalized, Andrew took full responsibility for the operation. Along with learning to manage his 60 cows, grow feed for his herd and care for calves, he also became a first-time father when his wife Nikki gave birth to their daughter Paige.
On top of learning to be a parent, he was thrown his first dairy management challenges. “It started out rough when I took over,” Andrew says. Nutrition issues, followed by complications as he learned to breed AI caused a heavy drop in milk production and a shortage of bred cows that interrupted his fresh cow cycle.
Since then he’s changed nutritionists and the bred cow cycle has caught up “so the next nine months look good,” Andrew says. “I certainly made mistakes but I learned from them.”
He’ll have to. Echoing the experience of farmers across the country, Andrew cites one of his biggest challenges over the next few years as becoming a better business manager. “I have to make more time to do this and to learn about it. I didn’t know it would be such a huge part of what I do.”
Though Andrew didn’t actually request it, Elspeth and Peter offered their advice and management expertise as part of the agreement. Elspeth says, “We are confident that he wouldn’t have secured financing without our presence in the deal. Andrew had no experience in dairy and was seeking a very large loan. Lenders need to feel comfortable with the management expertise and the agreement ensured that was behind the deal.”
This kind of commitment to hands-on mentoring may be rare, but behind it is the simple goodwill and desire of experienced farmers to share their expertise, to show the next generation how it’s done, and to support an industry.
Still, Elspeth wouldn’t say mentoring is for everyone. “It’s a big risk. Are you willing to commit to that mentoring? Peter is good at that kind of thing.” She laughs. “I know myself too well. It’s a good experience, but to observe it is to know that I wouldn’t do it myself.”
The Wiles have a lot of expertise to share. For the past 25 years Elspeth has been the driving force behind the couple’s other enterprise, Wiles Lake Farm Market and Bakery, an outlet for Nova Scotia-grown produce, including their own. They are currently working on an expansion to the farm market and greenhouse to be finished when the season begins again in March.
Andrew learned the ropes over the time the agreement was being crafted. Since then he’s had occasion to ask for Peter’s input and Peter will give advice if he believes Andrew might be overlooking something. But Andrew has also sought help from a larger mentoring community. He networks at provincial dairy meetings and says “many professionals have helped as well.” He refers to the seed salesman who provides information on cropping and spraying his corn, local agronomists, his vet and a private nutritionist he’s hired.
In four years Andrew will decide where to relocate the dairy. “I have my father’s farm to move to, but in the meantime there are other considerations. I think we’ll stay in the area,” he hesitates. “But what is really pulling us away is that this is not the best area in the province to farm. And our land is spread out which will mean extra costs. We’re asking ourselves would we rather be in the valley, in Nova Scotia’s main agriculture area?”
While busy with their farm market and bakery, the Wiles have the same four years to decide what they will do on the home farm when it no longer houses a dairy. Once again, Elspeth says, “it will require a creative solution.” CG
