As a historic generational shift looms, University of Alberta research is exploring how to help farmers plan for succession.
"It's probably one of the most pressing yet overlooked challenges facing farmers today," says Rebecca Purc-Stephenson, a psychology professor at the University of Alberta's Augustana Campus. "As the farm population ages, more farms are at risk of simply disappearing if a plan isn't in place."
Handing the farm to the next generation can help ensure its survival, yet 88 per cent of Canadian farmers don't have a formal succession plan. By 2033, 60 per cent of farmers will be over age 65, representing the largest leadership transition in Canadian history, and "we are just not ready for it," she adds.
That puts farmers' legacy at risk, says Purc-Stephenson, who led a new study to provide a better understanding of their perspectives when it comes to drawing up a plan.
"A farm is more than a business. It's a way of life with land, equipment, livestock and decades of knowledge all at play. Without a plan, those assets and responsibilities aren't going to be transferred smoothly, which could leave the farm vulnerable to being sold off in pieces or shut down entirely, when the intention was to pass it on."
Succession planning is an emotional journey as much as a practical one for farmers, adds Purc-Stephenson, also the founder and lead researcher of agwellAB, a mental health initiative for farmers and their communities.
"Unlike other businesses, a farm is both a home and workplace, so for farmers, it's more than just transferring assets. It's about letting go of your identity, control and sometimes even the dream of continuing a family tradition."
To find out what could help more farmers tackle succession planning, the researchers explored their priorities, what factors either delay or spur the decision to make a plan, and which resources they'd find helpful.
Interviews with 35 family members from 16 Alberta farms revealed that their top priorities for making a succession plan included keeping the farm in the family, ensuring financial security and viability of the operation, and sharing the assets fairly to avoid hard feelings.
The survey also found seven factors that were motivators or roadblocks to making a plan, including farmers' deep ties to their self-identity.
"For most of them, farming wasn't just a job, but a lifestyle and a legacy built on generations of hard work," Purc-Stephenson notes, adding that those feelings could make it difficult to move on to retirement.
(Photo: Supplied)
The state of farmers' physical health, government policies such as inheritance taxes, plans for farm expansion and a related need for professional guidance and expertise for that process were also factors in moving ahead with or delaying succession plans.
Awkward family dynamics - fear or reluctance around discussing succession also played a part, along with "farm culture" beliefs, the study showed.
"Traditional farming culture tends to value hard work, perseverance and masculinity, which could create expectations that farmers will work indefinitely. It also sets up some expectations about who should take over the farm," Purc-Stephenson notes.
Gauging readiness for succession
Using those factors, Purc-Stephenson and her research team then drew up what they call the Farm Succession Readiness Framework.
The analytical tool found two main variables that seemed to play a big role in farmers' readiness for succession planning risk perception and self-efficacy.
Measured together, the two dynamics reflected the levels of urgency and confidence farmers had about succession planning, ranging from low to high. From that analysis, they were categorized into four types: active planners, succession avoiders, back-burners and end-of-the-line farmers.
Active planners, 25 per cent of the farmers surveyed, understood the risks of not having a succession plan, wanted to protect their assets and felt confident in discussing plans with their family. They'd developed plans, had a team of advisers and were ready to transfer responsibility to sustain the farm.
Almost 44 per cent of farmers were back-burners, who didn't see an immediate need to make a plan, still had good health, wanted to avoid premature family conflict, and were waiting to see what their children wanted to do with their lives.
Succession avoiders, 12.5 per cent of those surveyed, understood the risks of not having a plan, yet didn't have a strong sense of farm legacy or goals to expand their operations, and lacked the confidence or desire to discuss it with family. They planned to continue farming as long as they were physically able, then leave the farm to the family when they died, and while they often had a will, they didn't share what was in it, creating uncertainty for heirs.
Almost 19 per cent were categorized as end-of-the-line farmers, who assumed no family members were interested in taking over their relatively small operations. Lacking confidence to talk about succession, they believed selling the farm and dividing the assets would mark the end of their legacy.
Tailored tools
Knowing that farmers delay succession planning for varied reasons "allows for more precise and compassionate support strategies" to help them move forward, Purc-Stephenson believes.
The Farm Succession Readiness Framework will be made available as a tool for farm advisers such as bankers and mental health counsellors, she adds.
"Our information can help them unpack what questions to ask their clients to develop some strategies for succession planning. It's about understanding that for farmers, there's an emotional component they need help with before they can talk about the specifics of the business."
Asked what they'd find most helpful for making a plan, the farmers suggested five resources: access to professionals like lawyers and accountants familiar with agriculture, educational programs, mediators to guide difficult family conversations, peer networks to learn what other farm families are doing, and hands-on tools like checklists to make succession planning easier to tackle.
Active planners could take advanced workshops on tax strategies, while back-burner farmers could benefit from tools like checklists and webinars, for example.
End-of-the-line farmers could get help through retirement planning workshops and mentor new farmers trying to get into the industry, while succession avoiders could improve their family communication skills through workshops.
Ultimately, the research can help make the process of succession easier, Purc-Stephenson believes.
"By understanding what shapes a farmer's readiness, we can meet them where they are at to create plans that can keep families and farms intact."
The study's co-authors include Augustana undergraduate researchers Casey Hartman, Stefanie Phillips and Cale Scotten, and graduate researcher Ella Kim Marriott from the Faculty of Agricultural, Life & Environmental Sciences. The research was funded by the Agriculture Research and Extension Council of Alberta through the Alberta Ministry of Agriculture and Irrigation.
