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DATELINE —Farmers planning for retirement may need to consider how a new operator could be brought into the business over time.
Wyatt Fraas, associate director of farm and community with the Center for Rural Affairs, said many farmers do not have a farm successor already identified.
Fraas said Purdue University estimates about 75 percent of farmers do not have an identified successor. About half of those farmers expect someone outside the family to take over the operation.
Fraas said a gradual transfer of duties and ownership can help both the current farmer and a possible successor.
The process may begin with reviewing a candidate’s experience and references. Fraas said a short trial period using paid labor can also help both sides decide whether the arrangement could work.
That trial period can show how well the two people work together, how they handle daily priorities and how they respond when problems come up.
If the arrangement continues, Fraas said the farmer and successor can develop a phased transition plan. That plan may shift decision-making and management duties over time, or it may assign responsibility for certain parts of the operation first.
Fraas said a written transition plan can make the timing and responsibilities clear.
A multi-year plan can also help both sides judge whether progress is being made. It can give the new farmer a better understanding of when more responsibility or ownership may be transferred.
The current farmer may also stay involved for a time as a minority partner or mentor.
Fraas said that can give the new operator access to the retiring farmer’s knowledge of the land, the business and the risks that come with farming.
He said the retiring farmer should also recognize that the next operator may face different markets, regulations and business conditions.
That may lead the new operator to make decisions that are different from those the retiring farmer would have made.
Fraas said a transition plan should eventually allow the new operator to run the business independently.
