My columns in each of the last four months have highlighted a paragraph of the FFA Creed as it relates to farm transition. Written in 1928 by Erwin M. Tiffany, the FFA Creed has had tremendous staying power through the last 91 years.
The creed continues to provide vision and purpose to young students on agriculture’s rich heritage and frames a leadership role in the future of the industry.
‘Not of words but of deeds’
One of the great things about farmers is their no-nonsense direct course of action.
When I visited a family considering possible options for transition plans, the matriarch stated with conviction, “We had an opportunity to pay for our farm when we were our son's age, and it’s important to us that he controls his own future and has the same opportunity for ownership that we had. If we wait until we die, I'm concerned that he may miss his opportunity for ownership.”
Farming has always been hard, and it probably always will be. But that’s exactly what makes it great. Farming isn’t like any other occupation. It’s a way of life handed down by past generations for safekeeping until the next generation is ready to take over.
‘Struggles of former years’
The ability to provide direction from past experiences can be the difference between success and failure in farm transition. In this case, recognizing the advantage of completing debt payments at age 65 is infinitely more advantageous than starting to make debt payments at age 65.
“We may create more conflict for our family by deferring the transition than by initiating it,” this woman said. “Our son is the future of our farm and a part of the future of our community.
“My brother left the farm in the mid-’80s when he was faced with uncertainty. Because we stuck it out, there are now two families who pay taxes to our schools, buy from our local stores, attend church and support countless numbers of other organizations in our community.”
If we trend toward fewer farmers who have to farm more acres with fewer ties to our local communities, what is the future viability for our local businesses, schools and churches?
‘Hours of discouragement’
With commodity markets depressed by global supplies and trade disputes, another year of declining farm incomes may put pressure on farmland values as some may be forced to sell land to raise capital.
It will add significant stress for a producer to continually rely on above-trend crop yields to make up for low commodity prices and rising costs.
It may be an optimistic mentality or simple stubbornness, but the American farmer has staying power. The physical toughness and mental fortitude naturally acquired over the years on the farm have served us well.
Surviving this year will no doubt add to this resilience. I’m certain that most will continue until either our banker tells us “no” or our Maker calls us home.
‘Leadership and respect’
The next generation of farmers will not only be accountable for feeding the world, but will also be responsible for carrying on a way of life that we hold in high regard.
The most recent census from 2017 shows us that 85% of farmland is owned by those age 55 or older (34% is owned by those 75 or older).
This means the remaining 15% of farmland is owned by those age 54 and younger. Only 8% of farmers in Iowa are 35 years old or younger. These are staggering statistics that should raise concern for those interested in the future.
Our industry needs to consider combined efforts, whether within the family or outside the family, not only for economies of scale and production efficiency, but also in transition opportunities.
It takes a tremendous amount of capital to start a farm operation. Young farmers will need help from others who are in a position to provide an opportunity.
With escalating farm estate values, it has become increasingly more difficult for heirs to resist the natural temptation of focusing on the monetary value of their inheritance. It can be difficult to avoid the tendency to argue over material matters when the will is read at an emotionally charged time (with a large amount of equity to argue over).
This is the root of a significant issue your heirs may be dealing with at some point with your farm estate.
Over the years, we’ve learned that communication is likely the most important technique to prevent some of these issues. No matter how the dispute originates, sometimes the struggle between legacy and inheritance is inevitable.
Your part in ‘that inspiring task’
Rural America will soon be forced to deal with a substantial number of aging landowners who will either retire or pass, leaving our industry in the hands of the fewest number of young farmers in history.
Whether you are a landowner looking to retire, an existing operator (or mentor) looking to grow, or a young person looking for an opportunity to be involved in production agriculture, I believe we can and will find a way to facilitate relationships both within families and outside of families for the sustainability of our industry.
My hope is that we will recognize the legacy that our parents have left us and embrace the opportunity to pass this legacy on to our children with such conviction that they will have the consciousness to pass it to their children’s children.
Ninety-one years ago, Mr. Erwin M. Tiffany wrote it perfectly in these five remarkable paragraphs:
“I believe in the future of agriculture, with a faith born not of words but of deeds. Achievements won by the present and past generations of agriculturists; in the promise of better days through better ways, even though the better things we now enjoy have come to us through the struggles of former years.
“I believe that to live and work on a good farm, or to be engaged in other agricultural pursuits, is pleasant as well as challenging; for I know the joys and discomforts of agricultural life and hold an inborn fondness for those associations which, even in hours of discouragement, I cannot deny.
“I believe in leadership from ourselves and respect from others. I believe in my own ability to work efficiently and think clearly, with such knowledge and skill as I can secure, and in the ability of progressive agriculturists to serve our own and the public interest in producing and marketing the product of our toil.
“I believe in less dependence on begging and more power in bargaining; in the life abundant and enough honest wealth to help make it so — for others as well as myself; in less need for charity and more of it when needed; in being happy myself and playing square with those whose happiness depends upon me.
“I believe that American agriculture can and will hold true to the best traditions of our national life and that I can exert an influence in my home and community which will stand solid for my part in that inspiring task.”
For 27 years, Steve Bohr has been a partner in the farm continuation firm of Farm Financial Strategies, Inc. For additional information on farm continuation issues or if you have a question please contact Steve via email at Bohr@FarmEstate.com or by phone at 1-800-375-4180.