Leave a Legacy
Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project. He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.
Nov 15, 2011
From Legacy Moment (11/11/2011).
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A few months ago, I wrote a ‘Leave a Legacy’ column for Farm Journal entitled "How Safe Is Your Base?" referring specifically to a farmer’s land base. Since most farmers rent more land than they own, the tenant-landlord relationship can be a big concern. Farming operations, equipment purchases, and numerous fixed costs are based on acres farmed. So any factor that jeopardizes stability can be expensive, and any ground lost (due to a sale, competition, etc.) might be irreplaceable.
In the column, I wrote, "Most landlords are committed to farming and are intensely interested in knowing their farm will continue to be productive into the future. There is a lot of mutual benefit in establishing a long-term lease, a buy/sell agreement, an option to purchase and a funding mechanism for the purchase.
"Your landlord wants:
- Financial security, a return from the land.
- Good stewards who will care for the land as their own.
- Satisfaction from a good working relationship with a tenant farmer.
You may want:
- Financial security, assurance that land is available at a fair price.
- A well cared for piece of ground that will yield the very best returns.
- Peace of mind knowing that your base is safe and your operation can grow.
You and your landlords should act as strategic alliance partners in your farming operation---with each partner committed to the health and welfare of the operation."
In the Legacy Project Workshops, I illustrate a concept we call the Legacy Landlord Program. It is a service we suggest to our succession planning clients. In the program, we facilitate a discussion between tenant and landlord. We promote a long-term lease, an option to buy and suggest a funding mechanism.
Is this win-win solution a good fit for you?
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