Here’s a question many of you have probably asked yourself at some point: if it looks like there aren’t many options for growth on your farm, what’s a growing family to do? This is the question GFM contributor Jeanine Moyer digs into for this article.

Speaking of the farm biz, one key component that often gets overlooked is offering support to the farm’s leader. As Helen Lammers-Helps explores in this article, despite leaders being hardworking, strong and stoic, team members need to remember that sometimes their leader needs support, too.

And since winter is still hanging on (le sigh), we’ve got an article in the Cultivating Wellness column by Kathlyn Hossack on how to make a tasty, nutritious and warming bowl of broth and in the Fit to Farm column, you’ll learn why it’s important to stay active even if it’s too cold to get outside.

What would you like to see in the Farm & Family section (powered by Country Guide) of Western Producer Media? Drop us a line at astewart@farmmedia.com

Farm families work together to break new ground and nurture growth. As each member grows, our Farm & Family team wants to know how we can help you grow further. Share your thoughts with Farm & Family editor astewart@farmmedia.com

The post Farm & Family – Feb 27 edition appeared first on Country Guide.

Two generations are currently working together on the Smith family farm.*

An intense pride in generational legacy has been passed down through the farm’s long history. Everyone shares the same love and appreciation for the family farm.

Succession planning has slowly progressed for the family, and the siblings find themselves at a crossroads about what direction they should take the farm. The youngest, Jenn, doesn’t want to commit to farming yet. Sabrina wants to pursue an off-farm job and the two eldest, Rick and Macy, want to take over the farm but need to find a way to make it financially feasible to sustain multiple family members.

On top of the challenges of succession planning, there’s an underlying current of pressure to keep the farm operational for the next generation.

Darrell Wade, founder of Farm Life Financial Planning Group and a farm succession specialist, says that for many families the farm can represent a shared family legacy that can inadvertently tie the family, and especially the next generation of siblings’ identities, to the land.

“Such emotional weight can intensify conflicts, where disagreements about the farm’s direction can feel like personal betrayals or challenges to family heritage,” he says.

Wade suggests that these four siblings should first recognize the emotional and cultural value of each other’s connection to the farm.

“Each may have different feelings or loyalty to the farm and, whether or not they are involved in the day-to-day operations, they may still be invested in the farm’s future,” says Wade. “I recommend including non-farming siblings in legacy decisions, such as preserving family traditions or land use.”

He says that roles for non-farming siblings can also be created to maintain their stake in the family legacy, for example, managing community outreach or maintaining historical records.

“I’m a firm believer that everyone should be involved in the succession plan, no matter if they are active in the farm business or not,” Wade says. “In this case, planning meetings should make space for discussions about how to maintain the farm legacy without assigning roles or responsibilities to select siblings. Conversations should be open and honest and without pressure from others.”

Wade also recommends designating time or space for non-work or non-farming interactions to maintain positive sibling relationships outside of farm duties, farm management or succession planning discussions. “These can be as simple as family dinners or attending community events.”

* This family and case study are fictional.

To read previous instalments in this series:

Part 1: Sibling issues in farm succession

Part 2: Tips for how to be fair to all siblings during farm succession

Part 3: The big squeeze

Part 4: Financial disagreements

Part 5: Generational differences

The post Sibling squeeze part 6: The emotional stakes of a family legacy appeared first on Country Guide.

Over the last 50 years, siblings farming in partnerships or corporations has proven to be a thriving business model.

And even though working with family can be difficult, successful sibling operations seem to leverage the unique advantages of their relationships to create growth for their farms.

While scale matters, it takes more than an economic advantage to make a family farm grow. Successful sibling-run farms consistently implement practices that any farm with multiple decision makers can apply to their own operations.

Here are some examples of sibling-run farms and what they do to drive growth and maintain relationships.

Align values and goals

One of my favourite sibling farm businesses is led by two very different brothers. Like the cheeky definition of a mullet (a short-in-the-front, long-in-the-back hairstyle made popular in the 1980s), one brother is all business in the front while the other is the party in the back — meaning despite diverse personalities and skills, they make it work.

Leaning into each other’s personalities, specialized skills and knowledge, they’ve expanded the original family “pick-your-own” farm business into multiple farm markets while maintaining quality homegrown produce, the core foundation of their business.

Their goals for the farm are aligned, but their roles are separate. They stay out of each other’s lanes. Each sibling strives to achieve their individual indicators of success and have autonomy to make decisions in their areas of expertise. Since they’re both focused on doing what they like, they’re less stressed and more efficient.

No matter how diverse the enterprise or its people, consistently well-run farms define and align their core values.

Governance matters

Every family business can benefit by establishing rules around accountability and finding consistent ways to make decisions collaboratively. This becomes even more important when siblings work together, because smart decision-making structures make for better farms and happier families.

One of my favourite examples of this type of collaborative management structure comes from a dryland farm in southern Saskatchewan. The sister oversees grain operations, one brother is a skilled mechanic and manages the shop, and the other brother ties it all together with his financial acumen and by ensuring consistent communication and decision-making.

The farm also has an advisory board to add an extra level of knowledge and perspective to decisions. Because the advisory board acts as an objective third party, conflicts tend to be resolved more quickly and civilly.

The siblings meet regularly to talk about operations and carve out separate time slots to discuss business. They have very clear rules on what decisions they will make together and how majority rules.

Predetermine ways to resolve conflict

The reality is that the more individuals there are that need to/want to weigh in means that there will more disagreements, more information and opinions, and it will take longer to make decisions.

It’s important to have everyone agree upfront on consistent, effective ways to resolve disagreements. For example, one farm I knows says decisions over $10,000 require 100 per cent consensus or they simply don’t do it. Another multiple-sibling operation developed a cascade of questions to help guide large expansion decisions: Does it meet our core values? Can we afford it? Can our people handle it? What other equipment purchases will be required to make it happen?

Although difficult, it’s also imperative to include parameters in business agreements for how a business will end and how individuals can exit. Splitting up can be complex and expensive, so build in exit routes right from the start.

Compensation for the future

Compensation is a particularly tricky topic for siblings in business together. Add in the complexity of gifts, non-monetary benefits, such as housing, and each individual’s expectations, changing needs, rising educational costs and spousal off-farm incomes and it can get messy.

During the succession process parents will often start by giving equal pay and equal ownership shares to each sibling. But what happens when inflation takes off, or a failed crop means the farm can’t afford it all? Should a sibling who is picking eggs get paid the same as the sibling who has invested money and management decisions? How do you deal with maternity or paternity leave or farm-owned houses?

Tying compensation directly to jobs instead of people makes the process more objective. One way to do this is to set and track key performance indicators (KPIs) for each role. For example, gross margin per litre could be tracked for the task of feeding the dairy herd. KPIs create a culture of continual improvement and accountability.

In Manitoba, a farm with three sibling operators uses a commission-based payroll. Each manager receives a set percentage of the net income of their separate enterprise plus a base wage from the whole farm. Although it takes more accounting work, they find it has encouraged a growth mindset and lessens their natural competitiveness and rivalry.

Set boundaries

My neighbours have a very successful cropping operation and many years ago I asked one of the brothers what made their business so successful. His response stayed with me: he and his sibling had each other’s’ backs when things went wrong, and they never took their work disagreements home.

Successful sibling businesses set boundaries for themselves and their families. One set of dairy farming brothers I know decided after a couple of years to amicably split the herd and assets and share some machinery instead of forcing themselves to work together. They genuinely tried to make the business relationship work but after five years they agreed that each had very different priorities and goals.

They used the divvied-up livestock and quota as a base for their individual farms and signed an agreement to work together on crop production. This tough decision saved their relationship.

They continue to help each other to this day and, most importantly, the brothers still love each other.

The post The Secret Sauce of Sibling Run Farms appeared first on Country Guide.

Andrew and his wife have been farming in partnership with his parents for 12 years now, and the family is beginning to develop a farm succession plan.

Doug has been working with his parents and brother for a few years, drawing a wage, and isn’t sure if he wants to farm with his brother or start a farm of his own some day.

Jessica is married with a family of her own, has moved away from the farm and hasn’t expressed any interest in the farm — until now.

Both Doug and Jessica are concerned the succession plan will create an uneven inheritance and want to make sure they get what they believe to be “their share” of the farm. As a result, tension is running high between the three siblings, and Kevin and Nancy feel they are caught in the middle.

As parents and the older generation of the farm transition, Kevin and Nancy want to see the farm legacy continue, but at what cost to the relationships between their adult children?

A voice, but no vote

Family farms often involve complex succession planning, especially when parents are uncertain of how to be fair to everyone in the family and are concerned about family harmony.

Siblings often have differing visions for the farm’s future or feel entitled to unequal shares based on their involvement. Uneven inheritance (i.e., one sibling inheriting the farm while others receive less) can create long-lasting tension, especially if non-farming siblings feel excluded.

Darrell Wade, founder of Farm Life Financial Planning Group and a farm succession specialist, offers his insights about managing this sticky sibling situation.

Wade says that this family is already off to a good start by informing everyone of the intention to develop a succession plan. He recommends they start with an initial discovery meeting with an advisor so everyone involved can get a better understanding of their vision of success.

He says it’s always best to remove any assumptions of what everyone wants and believes is needed to be successful in their individual lives and for the farm. Wade believes it’s important that everyone is allowed to have a voice, but they may not necessarily have a vote.

“Most parents want to be able to support all their children if they have the available resources to do so,” says Wade. “But a substantial financial planning analysis should be conducted first to determine the lifestyle income needs of the exiting generation and the financial strength of the farm and family before determining ‘fair’ financial amounts for other siblings.”

He says that depending on the age and stage of life of the off-farm siblings, they may require different types of support (e.g., school tuition, first home, vehicles, etc.). The parents also need to consider balancing their financial needs with what to give their children and/or with the available cash flow of the farm.

“A key part of our recommended planning process also involves identifying goals and quantifying what the farm and family can afford to balance needs and abilities,” Wade says. “For example, I would recommend the family look at various financial tools, such as life insurance policies, that can name non-inheriting siblings as beneficiaries to offset the value of the farm being inherited by one sibling.

“Other considerations could be a ‘right of first refusal’ clause, allowing siblings to buy out the farm or shares before they are offered to anyone outside of the farm. No matter how the family proceeds with the succession plan, communication will be essential to maintain harmony.”

Next, Wade says he would introduce options that could allow the family to weigh the advantages or disadvantages of changing the current structure of the farm (e.g., from a sole proprietor to a partnership or corporation). This would allow the family to clearly define a value for the exiting and entering generations and it can help balance a sibling’s ownership percentage based on their contributions.

“A new ownership structure should also include an agreement to outline how the business will manage unforeseeable situations, like a partner death, disability or disagreement,” Wade says, noting that it’s essential for farmers to always use written contracts, consult an attorney who specializes in agricultural law to ensure contracts are legally binding, and to account for local regulations.

Wade reminds everyone that once the succession plan has been established, it can’t just sit on a shelf. “The plan, wills and agreements should be revisited every few years or after major life events (e.g., marriages, new children, divorce) to reflect changing contributions or goals, or potential new outcomes,” he says.

In the next instalment of this series, we look at the case of Andrea who has been farming alongside her parents for three years. In addition to 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 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 efforts to grow the farm business.

Watch for it in the December Goal Setting issue.

Read part one in this series here.

*This family and case study are fictional.

The post Tips for how to be fair to all siblings during farm succession appeared first on Country Guide.