Passing on the Farm
Loyalty to the land is deeply entrenched in the souls of most farm families. To keep keep the farm operating, there is no better time than now to talk about transfer.
Transferring the farm is a tough topic for many parents and children to discuss. However to keep the farm operating, there is no better time than now.
Property ownership, business control and death are topics many people would rather avoid all together. Not talking about it only causes strain between family members, resulting in disagreements and farms being sold. If you don’t want these results, sit down and take the time to seriously look at the issues needed to address succession and estate planning.
“Sometimes it’s difficult but you need to start talking,” said Mike Sciabarrasi, Extension Professor of Agricultural Business Management at the University of New Hampshire. While conducting a workshop titled “Transferring the Farm,” Sciabarrasi noted that there are many factors contributing to family discussions such as debt, health care, money for retirement, taxes and fair treatment of all children. It is all important and farm families need to strategically think and talk about it.
For the Fabrizio family, the progress of the farm snowballed. After purchasing the farm in 1967, the Fabrizios began planting apple trees to create Windy Ridge Orchard. The five Fabrizio kids were always involved in the farm and still are today. However, it is Sheila who has decided to stay on the farm with the incredible mountain view in the distance.
When Sheila returned to the farm ten years ago, she along with the support of her parents, worked on finding a way to create an enterprise within the apple operation. She conducted a trial to see if she could make a living from the land. Sheila first tested the market with a donut wagon before investing in a café and found it to be profitable.
“We knew we had to diversify from the wholesale apple market for the farm to continue,” noted Dick. “When Sheila decided to farm we added nature trails, farm animals and a playground. At the time, we didn’t want to invest too much until we knew that Sheila was definitely going to stay. After ten years the test has held true.”
The visitor season needed to be extended for Sheila’s livelihood. She has successfully accomplished this by planting a pick-your-own blueberry patch and building the Cider House Café where visitors can enjoy a snack or meal. “We open the end of June and close at Christmas,” said Sheila. “We have made it a family destination location with a good feel — a place where families can come and enjoy the day.”
Windy Ridge continues to expand. The first expansion was the Christmas tree plantation in 1989. People can enjoy the holiday season with a wagon ride, cut their own tree and purchase presents at the gift shop. “New projects and products keep things interesting,” said Dick. “And customers come looking to see what is new and different.”
The newest addition — Seven Birches Winery and an event center. Wines are now being crafted on the farm. It is another item that visitors are looking for, wines made with local fruits such as apples, blueberries and pumpkins from Windy Ridge as well as crafted grape wines. The event center offers an area for special gathering such as weddings and family reunions.
“Time slips by quickly and estate planning is a subject that people often think we’ll do tomorrow,” noted Ann. “If it hadn’t been for Sheila’s energy and enthusiasm we probably would have called it quits by now. Her eagerness helped move the farm forward to what it is today. Plus she has brought the farm to the world through the internet with a Web page and Facebook. It’s what people are looking for these days.”
Sheila’s four siblings all want to be part of the farm at some capacity so that it is always their family farm. “We aren’t the type of family to have an official meeting or plan but we talk over breakfast or at a coffee break,” mentioned Sheila. “Mom and Dad have planned well with life and long-term care insurance. They also have divided all assets equally between us kids. It’s not easy to talk about — there are a lot of unknowns.”
It is a blessing that all family members get along and are interested in the success of the farm. “We have all been involved in family discussions,” said Sheila. “It’s our mom’s and dad’s legacy and we don’t want that to fall apart. That would be the worst case scenario.”
The other component that has worked for the family during the business transition is that they all have their own areas they are in charge of. Dick takes care of the apple orchard and wholesale, Ann manages the gift store and Sheila tends to the café and event center.
Farm families often need a place to start and sometimes having a facilitator at a family meeting can help. “Savings accounts, IRAs can be liquidated but a farm is often dear to the hearts of farmers and something families usually want to hold together. Transferring farms can be complicated and challenging on family dynamics” explains Matt Strassberg with the New Hampshire Mediation Program. “In most cases a desirable outcome is found but sometimes the math doesn’t work,” said Stassberg. “Sometimes parents have to sell the farm because they need the money to deal with loans or for long-term care costs. It is an emotional issue for many people.”
Strassberg suggests that families contact an Agricultural Mediation Program sooner rather than later. “The kitchen table is also the board room table,” noted Strassberg. “The people you work with are also your family that you celebrate holidays with. Farm transitions can naturally impact other areas of the family which may magnify conflict. Our job is to facilitate a calm rational discussion with all of those involved.”
No matter how your family decides to deal with transferring the farm it is a subject that needs to be addressed. Perhaps it is as simple as talking about it while planting the garden or over coffee. Whatever the case, a conversation and plan of action will ease the process as much as possible.