The footpath of my youth still wends past my grandparents’ smokehouse, through the creaking garden gate to the creek where I spent sun-drenched days searching for fossils and frogs.
Some trick of memory weeds the overgrown flower patch as if my grandmother had just tended to it. The peeling picket fence gets a sudden whitewash. The fescue pasture wraps around me like a security blanket until a bittersweet breeze stirs the branches of an ancient oak tree. No matter who owns this land, it will always own me.
Land is like that. Farming may be a business, but land-based family businesses generate emotional and, yes, sometimes irrational devotion that can result in unique challenges when it comes to passing the farm between generations. Understanding the challenges and keeping the lines of communication open is what it takes to resolve the normal disagreements and to prevent the more destructive conflicts that can emerge, explains Mark Green, a family business adviser with the Family Business Consulting Group Inc., in Portland, Ore.
“Growing up and living where you work creates an allegiance unlike other family businesses,” Green notes. “Even families with the fundamental professional mindset of treating the farm as a business understand the farm is more than that because it is the family’s sense of place in this world.”
Kevin Spafford, Farm Journal succession planning expert, adds that land is a tangible asset that provides lasting value and security—unlike a factory, patented process or proprietary software. “Family lore is full of stories regarding a section of land that is named for the folks that tilled it generations ago. Few other businesses contain the same heritage, tradition and values,” Spafford says.
Green, who has family farm roots in Minnesota and Illinois, knows firsthand that the physical ties to the earth create a deeper connection than any found in other types of companies.
“A land-based family business engenders in its owners a passionate identity of being a steward,” Green says. “The emotional attachment among families with remote members can also be strong, which is good for connectedness, but it also creates the
potential for conflict.”
Survival of the Fittest
Why are some families plagued with controversy while others seem to have it all figured out? Farm Journal succession planning expert Kevin Spafford says some conflict is normal and can even be healthy. Still, he says, successful family farm businesses also exhibit some combination or all of the following qualities:
- Clear vision
- Common objectives
- Strong leaders
- Determination to succeed
- Flexible and progressive growth
- Passion about the business
- Involving children at an early age
- Skill, ability and talent—either within the family or hired from outside
- Enough persistence to weather cycles and withstand challenges
At odds with the details. The types of conflicts Green often sees in his consulting practice arise from what might outwardly appear as small details. For example, who lives on the home place can be a source of contention between working partners. The family members on-site may feel they are always on call, while those who live off-site may perceive that the family home bestows a greater sense of prestige or authority.
Issues such as who has a larger home or a newer home can cause friction. “We all like to think we’re bigger than those kinds of monetary issues, but truth is, most farm families are better at working than they are at talking. These pesky issues can simmer under the surface and, left untended, can cause some real heartache,” Green observes.
He sees cases where nonoperating family members resent those with homes on the land. On the other hand, those that live on the farm may feel it is a burden to always be the host when family comes back for a visit.
Amenities such as access to vehicles, fuel, cell phones and the other perks that often substitute for compensation can be misunderstood by remote shareholders too.
Limited returns from the farm operation compared with the market value of the land can be another source of stress between on- and off-farm owners. Land-based businesses seldom pay out much in the way of dividends, and off-farm shareholders can become disenchanted if they don’t understand why.
Generational transition can also place a burden on the farm as capital is usually tied up in the hard assets of the land. Everyone knows a story of those who stayed on the farm being forced to purchase the land “again” from off-farm heirs.
Emotional connections to the land may seem unwise to those who view business as purely commercial. Those who pour their heart and soul into working in a land-based family business often struggle with the dollars-and-cents approach to a livelihood that also represents their home.
- Legacy Project 2010 Report