PLANNING FOR THE FUTURE

FOR ONTARIO DAIRY PRODUCERS, the family farm is a thriving multi-generational operation that requires the same types of decisions as a publicly traded company. Planning for the future – whether that means growing the business, scaling back, partnering or retiring – is a “must do” for every licensed producer, and the process has changed a lot since your grandparents stopped farming.

“In the past, death and wills tended to take care of succession, but now people are living well into their 80s, which would make the next generation in their 60s before they took ownership,” says Maggie Van Camp, National Director Agriculture, BDO Canada LLP. “Today’s farms need to have a plan that transfers decision-making and ownership to the next generation when they are young enough to expand and grow, adopt new technologies, efficiencies and ways to market, plus pay back debt and create profit.”

Without a plan, farm families open themselves to the risks of the four Ds – death, disability, divorce and disagreement. Van Camp notes another significant risk is the loss of the opportunity cost of not training and empowering the next generation to lead the business soon enough.

By Jeanine Moyer

“If farmers want their farm and children to be successful, they better plan ahead,” she says, explaining that sometimes fear of change or conflict drives procrastination and get in the way of progress. Some of the most common barriers preventing farm families from developing a plan come down to setting succession planning as a priority and accepting that it is going to take time, money and learning how to communicate about business and family.

Van Camp says a succession plan is an opportunity to create pathways for the next generation to move from labour to management to ownership roles in a business. “A good succession plan creates clarity of these shifting roles and responsibilities, like timelines, compensation and new business plans, and culminates in the creation of financial, tax and legal structures that meet the future needs of the farm business and family.”

Here’s a look at how three Ontario dairy farm families are approaching succession, and why this process is so important to them.