Farm Transition Planning

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Show Notes

darlene livingston pa farm link

On this episode of the Farm Credit AgVocates Podcast, we interview Darlene Livingston, Executive Director for Pennsylvania Farm Link about farm succession planning. Darlene will share with us her own farm transition story and her experience as a Certified Succession Coordinator with the International Farm Transition Network.

In this episode you’ll learn why farm transition planning is important, lessons learned from farm transition mistakes and useful tools to start your farm transition.

 

Links

Pennsylvania Farm Link

PA Farm Link workbook – Planning the Future of Your Farm

International Farm Transition Network

Mahoning Creek Farm

Indiana County Farmers Market

Click here to register for our Farm Succession Planning Webinar Series

Transcript

Johanna Rohrer:

Welcome to the Farm Credit AgVocates podcast. I'm your host Johanna Rohrer, Marketing Specialist at MidAtlantic Farm Credit. Today’s guest Is Darlene Livingston, Executive Director with Pennsylvania Farm Link. She is responsible for the daily management of the nonprofit organization, where they have reached over a thousand participants with hands-on farm succession workshops. She serves as an expert in farm transition planning resources and is a Certified Succession Coordinator with the International Farm Transition Network. Darlene isn't a stranger to Pennsylvania agriculture. She also is a fourth generation family farm partner at Mahoning Creek Farm, where they operate a diversified livestock and crop farm in Indiana County. One of their goals is to include the fifth generation in the future of their family farm. I'm pleased to welcome Darlene to the podcast.

Hi Darlene.

Darlene Livingston:

Hi, Johanna. Glad to be here.

Johanna Rohrer:

Thanks for joining us.

I want to just start out just with an introductory question to ask you about your personal and your professional connection to agriculture.

Darlene Livingston:

Sure. As you said, I was born and raised on a livestock and crops farm. I worked beside my parents and grandparents on that farm. I graduated from Penn State with a degree in Horticulture that I'm still waiting to use more of it. My husband Bob, our children and I spent 20 years on South Branch Angus Farms in York County, where my husband managed the farm. We were active in forage programs and owned our own farmette in York County. Then, in 2013, we transitioned back to my family's farm in Indiana County when my dad was 80. So I like to say we did it wrong, but we did it.

The farm should have been transitioned earlier, but we did talk with our children. They were interested in being the next generation on the farm. And therefore, I felt we became the bridge between my father's generation and our next generation, and came back to the farm.

I currently serve as the President of the Indiana County Farmer's Market. And I'm also involved in the Indiana County Sustainability Task Force, which is important to me to be involved in local activities. I began working for Farm Link in 2009 and quickly became involved in succession and transition planning work, as I realized how important that was to all farms, not only those in Pennsylvania. That's where our next generation gets an opportunity to farm, is when the farm lands are transitioned and provide that opportunity, whether they're family members or outside the family, that's where our opportunities come from.

And I've been active in the International Farm Transition at work. We had held two farm succession coordinator trainings in Pennsylvania, which I coordinated.  I currently serve on the board of directors and through this process, I've been able to work side by side with Ag professionals from across the United States and learn from them about farm transition techniques. So I have a great opportunity to work with Ag.

Johanna Rohrer:

I think what's so unique about your experiences that you're not only helping other farm families to go through farm transitions, you're also definitely an expert in helping to facilitate with some resources through that process. Also, you’re living that transition as well in your own life with your family, I think kind of takes the experience to the next level. It makes it more real and more authentic. I know I've had the privilege of meeting your children through 4-H and various events and experiences in the agricultural industry over the years. It’s definitely neat to see how your family operation has evolved, because it's definitely been a journey like you were sharing with us earlier.

For those listening, who aren't familiar with Pennsylvania Farm Link, could you help define the role the organization plays in supporting the transition of farm operations from one generation to the next?

Darlene Livingston:

Sure, I always feel that we have three facets that we work within and the first one is farm transition education and facilitation. We carry out educational programs, utilizing high quality Ag professionals sharing their expertise, and we also facilitate individual farm family meetings. If families need that, we direct them to the correct professionals to assist them. One of our other areas is the database we have of entering farmers seeking land and also land owners seeking to lease or sell their farm land, and those opportunities are there and we work to connect the people. And I will say for beginning farmers, one of the biggest challenges in the database is if they're willing to move or relocate, because many times there may be an opportunity, but it might not be right where they're currently at. So that makes a difference, it just depends where the people are at. And then also consulting. We often find ourselves talking to someone about next steps, if they are a beginning farmer or those looking to get into farming, we often get calls from people like that and also some senior generation farmers. And what we try to do is discern where they're at and then give them the appropriate next steps and direct them to organizations or resources that can help them in their journey.

Johanna Rohrer:

It's neat that you're talking about helping to make connections. It could be connections with particular resources for your farm transition and succession planning, or it could be bridging the gap with “hey, this is a really great industry expert that could help you from a technical standpoint to make that transition.”  Also, just from the facilitation standpoint, when I think about my experience with farm families, a lot of times the emotion is a big component for a farm family and sometimes the emotion, and the transfer of business plans or business decisions, can be sometimes really difficult to go through. So I can see why it's so important to have that kind of third-party perspective of bringing not only a connection of resources, but also that expertise to kind of just help that process move along.

How many farm transition opportunities do you think Pennsylvania Farm Link has helped transfer in the lifetime of the program?

Darlene Livingston:

Ones that I can count, I would say there are about 20. Now those that would have developed a succession plan, the others, I would say we have had about 1,200 people now through our succession workshops. And I'm sure just from speaking to them outside of meetings that many of those have moved forward on their own and with other Ag professionals, and that's great. Our goal is just to see the plans take place, whether we're helping them or whether we are the conductor that started the process and they then move forward on their own.

Johanna Rohrer:

I think that's a good point to bring up because everybody navigates from succession planning a little bit differently, and every operation has its unique opportunity to transition from one generation to the next. Every family is different. So there's different dynamics that play into those spaces and there's a variety of resources, like you said, that folks can look for and it is very helpful to help make some of those connections from a resource standpoint.

Over your time working in the program, what has been the biggest lesson you've taken away from your experience assisting as a farm transition facilitator? I'm just thinking, what do you wish farmers would be considering during that beginning stage process of farm transitioning?

Darlene Livingston:

The one thing that I would like everyone to keep in mind, and I think it's important to keep in mind is you cannot start too early, but you can start too late. The next generation cannot wait until you are ready normally to transition. Most farmers when they're ready to transition to the current generation on the farm is when they can't move anymore. It really happened to us when they can no longer do it on their own, then they're ready to start talking transition, but that's not good for the next generation. That's not an appropriate timing. The next generation needs to be working on this ahead of that. This all needs to be started, the earlier the better. In many times I will even advise young families, if your family will not talk about this, if you don't see room for yourself there, you need to look at other opportunities outside of your family farm, because it's not fair to ask a young family or young individuals to wait till I'm ready, when I'm 70 or 80 to turn over the farm. That's not fair because then they've lived half their life just waiting on an opportunity and we can't ask them to do that. And I have seen that mistake made and have people ask me when it's time to start. My heart would break because the answer is, well, you lost your opportunity. Your family member has moved across the country or whatever. They're not going to come back now. They were here to do that and they didn't see the opportunity. It’s a tough thing for the operating generation to do, but it's very important to start early.

Johanna Rohrer:

It is, and I think sometimes the older generation might not always see the perspective of the younger generation and vice versa. So it’s one of those conversations that I think evolves with time, but I tend to agree with you. It's a tough conversation sometimes to have, but when young people in agriculture see opportunity, it's important that they're able to capitalize on that experience and move forward with some of their goals.

So as farm families are going through transition, are there any specific tools that you would encourage them to consider during this time of transition?

Darlene Livingston:

Yes, as far as tools, we actually have a workbook called “Planning the Future of Your Farm.”  It's available on our website and we have hard copies. But what I found is that to be a good tool because farmers use it. There's worksheets in it for families to work through together and it often can help lead the conversation. And also “Farm Family Communications,” a workbook and online resource. There’s various quizzes in there that I've found very useful. We've used them in our own family and proved them to be a benefit. And also the other item I think is so important is to have qualified Ag professionals to assist them in whoever they are that “H” farm will have a different set of people. As you've mentioned, each farm transition is different and has its own unique entity, but make sure you have your qualified Ag professionals who understand agriculture.

Johanna Rohrer:

That I think is one of the key takeaways. As we are building networks around farm families and seeing those resource networks be created, it is really important to keep in the back of your mind when you are a farmer to reach out to people that have specific agricultural experience. That becomes very useful, whether it's from a legal standpoint or an accounting standpoint or a finance standpoint, there's all of these buckets of people that can help you bring resources or perspective that maybe you're not thinking about yourself. And then also to make sure you're reaching out to mentors or maybe other farm families that have gone through the transition to see and to hear their stories of what's worked for them.  I know that I've seen a lot of younger farm families reach out to neighboring farm families that are going through transition, and it's just a conversation of being able to learn from each other. And I think sometimes just that common takeaway is an important reminder for us not to overlook.

What do you see as a common mistake or something that you see people kind of do wrong through farm transitions?

I know we talked about starting a little bit too late in the process, but is there anything in particular that you feel like you've seen in your role of this as something that has really gone wrong in a process in the farm transition process?

Darlene Livingston:

Yes, there's a few things. One thing I will mention here is that the farm is not a pie. It's not something that can often be divided equally. Those are probably the most challenging calls I get and usually it happens in an estate plan. Those are the most challenging ones because it's very hard to keep that farm as an operating farm often when that happens. So don't be afraid to make the tough decisions, but make time to complete the necessary tasks. It's awfully easy on a farm to think about the everyday work that needs done on the farm, but not take time for transition planning. Communicating about the transition is always a challenge in farms. I don't think anyone can ever communicate too much, willingness to be honest and make the tough decisions. And those would be include the fair versus equal and things like that. So those would be some of the challenges that I see, some of the larger ones.

Johanna Rohrer:

Again, to kind of go back to what we talked about a little bit earlier. Farm transition planning is emotional because it involves family and business. And sometimes when you tie those two pieces together, you're exactly right, communication is just key to start the conversation and then making sure you're taking enough time to walk through that journey in that process.  I think also having the understanding that it's going to be a journey. It's not a fast process.

So Darlene, what misconceptions do you commonly see with farm transitions?

Darlene Livingston:

I think one of the biggest misconceptions is when farmers presume they know what someone else thinks or anyone presume they know what the other thinks or once, and often this happens when it's presumed, they want a cash payout from the farm. They want an equal inheritance when that's not always what they want. They still have a passion for the farm, so they would like to see it continue and to be carried on by that sibling who is farming or wants to farm it. Lots of times they are easier to work with than one might think. They have a whole different goal than what we presume they have. I think it's important to ensure that everybody verbalizes what their desire is. It's important to have everyone's input and not presume that we know. So have them all involved, have them all around the table, have them on a zoom call, whatever it takes to have the conversation, I think is an easy way to help work through that.

Johanna Rohrer:

Taking your advice from common mistakes of not having the conversation, not asking the right questions, but then also, if you assume that you think someone wants X, Y, and Z to happen with the farm transition, it is important to bring that all together and remind yourself, this is an opportunity to have a conversation to talk about the future of the farm, what it means for the family, what it means for the business. Commonly, I find that farm families are incredibly connected to the land. There is an emotional connection to that space. There’s great memories, most likely of growing up on your family farm operation.  I think those are really great suggestions for our listeners to remember.

I want to kind of shift gears a little bit and talk about something that we commonly hear a lot about with the younger generation wanting to get into farming, and that's the topic of land accessibility. That's a big challenge for beginning farmers. I know we briefly talked about in the introduction the tools that Pennsylvania Farm Link offers to help identify land accessibility in the state of Pennsylvania. 

Could you emphasize a little bit more about your online farm listing database and just bring our listeners up to speed on those resources?

Darlene Livingston:

Sure, we have an online database and anyone who wants to enter are welcomed to enter that database. There is a one-time fee for doing that. We also provide other opportunities that they can have a one-time listing on Facebook or something like that without being a member of the database to look for opportunities. So there's a couple ways that we try to help them. And when they're a member of the database, it is listed online, it's listed through a number. You have a reference number that people can peruse the database online and seek to learn more about you by contacting us. And we will make the connection, but it is a confidential connection to ensure everybody's privacy and to prevent issues. It's a great opportunity for beginning farmers who are seeking land to have their information out there and look to find an opportunity. We have landowners who look at our database, they may have land available or thinking what they're going to do with their land and we’ll search our database and look for some of the beginning farmers listed there as potential matches for them. And we will seek to provide that information to the land owner. There will be a cover letter or a business plan, whichever the beginning farmer has about what they would like to do in regards to their farming operation that they're looking to have land for, and then that starts the conversation between them and a potential landowner.

One other important thing I would like to say for beginning farmers, is the importance of their financial stability. They need to take that seriously and think about that as they're planning for their future, minimizing their debt and trying to have some savings there to help them with assets they'll need to purchase, whether it's equipment or whatever, as they obtain land. They do need to have that financial stability to make that move. I know there's also lots of programs and Farm Credit has programs to help them as well. That's often one of the stumbling blocks, I think for beginning farmers. And they also probably should recognize too, that about 70% of today's farmers also have an off-farm job that assists them financially and help some with some of the benefits such as health insurance and so on. We do have that database, but that's just another little pointer that's important.

And one other thing I did want to mention, I ask our next generation, so our beginning farmers and our family, what their advice for next generation farmers would be before I got on this podcast today, and I want to share those. One was to over-communicate with the operating farmers. The other one was to find their own role within the operation. Another one was trying to think about the perspective of the other generation you're communicating with, which I think is always important. My other next gen farmer, he's a little on the funnier side and he sent some funny comments. I translate those to say that essentially the senior gen may not understand all the hip lingo or the hashtags and all that, but we all have to remember that's what the next gen brings to the table, or it is a learning opportunity for the senior gen too. But we all need to remember that each generation has assets that they're bringing to the table and whether they're looking for land, what they're bringing to me, if I have land and a land opportunity is available, I need to be open to that.

Johanna Rohrer:

What a good reminder to reach out to both the senior generation and the junior generation to get some perspective. I love that advice from the senior generation, and to stay enhanced with your communication skills and help define your role and what that's going to look like for the future. And to try to understand that there is perspective for both parties as you're going through that transition. That's a great reminder, but then also to think about it from the junior generation, there's so many things that you have to think about when you get started and there's a lot of steps to go through. A good reminder to keep your business plan in the back of your mind and make sure you're working on that or taking a finance course to brush up on your financial skills, or just helping to surround yourself with a network of other young farmers that are going through the process as well. I always find it helpful to learn through my peers to remind people in the agricultural community as well. That's just such a wealth of knowledge to start those conversations and create those learning experiences. So with that, there's so many farm transitions that will happen.

And I'm just curious if, Darlene, you have one piece of advice in particular that you would want to pass along to those farm families?

Darlene Livingston:

I think the one piece of advice I would pass on, which probably leads into a little bit more explanation, but that would be not to meet at the kitchen table. That’s one thing I learned early on and it seems a little bit odd. It seems a little bit like what's the big deal, but what happens when a farm family meets at the kitchen table is everyone takes on their family roles. When you go to sit down, their dad sits at his place, mom sits at hers and the kids all follow in line at their normal positions. And therefore you're setting up that family dynamic and what you need to remember when you're working with the farm, transition or any type of farm meeting with family members is you want to be in a business mindset. You want to have that business hat on, not the family setting hat.

It's important to meet somewhere else other than the kitchen table. I would challenge our Ag professionals to do the same when they go in and meet with someone to sit at a different place, or if they find out where dad's seat is then sit in it yourself. Change it up, even if it's a table made out of saw horses and a sheet of plywood in a machine shop or something on the farm. In normal times, churches or extension offices or local coffee shops and other organizations allow farm families to meet there. I know we're in unprecedented times right now. So you might have to think creatively, you may need to meet in the living room or somewhere, but if you do, and dad has a special chair, do him a favor and sit in it for him.

What you're doing is you're setting up the business mindset again. It’s just taking some of the family dynamic out of it in a subconscious way and setting that into a business aspect, and that is very important. And right now, even with using video conferencing to include those other family members that are outside of the area. They can be joined in from anywhere. These things will help you make the business decisions, which helps to set aside the emotional ones. It's really very important that when making business decisions that you're interacting as business partners, not as father and son or father and daughter. It’s very important to be interacting on a professional basis with those family members that you may have raised them, but it's important to treat them as equals in the family business. It’s just a small thing, but yet it's a huge thing when you look at that perspective.

Johanna Rohrer:

I think that's a great takeaway, to define a space for those business decisions. Whether right now that's looking at some sort of technology platform to connect family members, or it's a space in a farm office or maybe in the community. I think that's a good reminder for all of us to make sure you define that time and what you want to accomplish in terms of your business objectives, when you're sitting down to have those conversations, that's a great piece of advice.

So before we sign off today, I just want to wrap up with a final question.

What do you advocate for in agriculture?

Darlene Livingston:

In case you can't tell, I have a passion for farm transition and succession. I really do have a passion to see farms move to the next generation and play a role in that positive impact because I see that it's the future of farming, which also impacts the rural economy of Pennsylvania and across the nation. I also have a passion in my local area. I believe we were brought back here for a reason, and that is to see agriculture move forward here. To me, that includes educating our local consumers and public officials about Ag and its needs. And also developing more markets in Western PA and our rural area, trying to advocate for that and more Ag businesses moving into the region and providing some of the opportunities that are available in some of the other regions of Pennsylvania that we're a little further behind here. And just seeing agriculture move forward here would be a great thing to me and something I hope that we can play a role in and I can play a role in.

Johanna Rohrer:

That’s a fantastic reminder for all of our agricultural listeners today. We have such a great opportunity to connect with our community and help bridge that gap between our on-farm production and our community family members, being able to help share with them the story of how we produce the agricultural goods that so many of us have grown to enjoy. There's always a story behind that and there's always great opportunity to help make those connections in our community. So that's awesome to hear about your advocating efforts. And it's also fantastic to have someone like you who is able to bring together that expertise in farm succession planning, and also to have such an authentic view of going through this process yourself. And I think that that just brings so much more credibility to the conversation and definitely builds your level of experience. I really thank you so much for joining us today. For more information about Pennsylvania Farm Link visit PAfarmlink.org.

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Looking for more information about farm succession planning tools? Join Farm Credit, and Pennsylvania Farm Link this winter for a virtual education experience on how to create a Farm Transition Plan Webinars series from 11 to noon on January 11th, January 25th, February 8th and February 22nd. We hope to see you soon.