The average farmer in North Dakota is about 57 years old. He operates a farm that covers an average of 1,512 acres, where he raises spring and durum wheat, dry edible beans, canola, flaxseed, pinto beans and honey. There are more than two cows for every citizen in this state, where a total of over 40 million acres is used for farming. Most dream of their children continuing to run the family farm after they die but still need a farm succession plan. Therefore, only about 30% of farms are successful in the second generation, and only about 12% are successful in the third generation. A successful plan to pass along the family farm can ensure it continues.
Experience and education away from farm
Farming is hard work that can be highly technical. Therefore, people who plan to take over the family farm someday should seek a college education. They should also spend time at conferences to learn more about the type of farming that they will be doing and agricultural laws. Experts suggest that the person spends at least three years working off the farm.
Work a trial period on the farm
The next phase begins when the person starts helping on the family farm. The successor should receive a salary and have a formal job description. The current owner and the successor evaluate their roles in two years.
Part of the farm is transferred to successor
Assuming the successor wants to continue, the current farm owner and the successor divide the farm. Part of the duties become the successor’s job to manage. Some assets are transferred into the successor’s name.
The successor conducts daily farming operations and can go to the older farmer for advice. A formal plan is created so the older farmer has money to retire, and farming equipment and the farm are transferred to the successor.
This arrangement helps the young person know if they want to be a farmer and get them working experience. Meanwhile, it allows the current farmer emotionally prepare for retirement.