As any farmer or aspiring farmer could attest to, farming is an asset-heavy business that, resultantly, has high barriers to entry and presents a number of particularly tricky issues for those growers who desire to exit the business and move on to the next stage of life.
The successful transfer of knowledge, wealth, and the means for conducting business from one generation to another is essential for the ongoing viability of any industry. Yet many fear that this process is no longer taking place to the degree that is necessary within the agricultural industry (pointing in part to the continually increasing average age of the U.S. farmer as proof positive of this theory). Others postulate that, as the industry continues to consolidate, there are simply more agricultural corporations and LLCs coming online, thereby hedging out the former model of sole proprietors and partnerships.
What is known for certain is that, as the current, aging population of agriculturalists do retire, thousands of acres of farmland and millions of dollars of agricultural capital will need to trade hands, and a new cohort of individuals and companies will need to step into the remaining void to continue production of the food, fuel, and fiber that the state, nation, and world needs to thrive. For this transfer to occur, farmers (both old and new) must avail themselves of the business resources necessary to ensure a smooth and efficient transition. To this end, farmers must have access to legal, accounting, and financial planning service providers who are acquainted with the unique characteristics of the industry and can provide the advice and tools necessary to craft and execute effective succession plans, and must be provided with a legal environment that will enable them to use the full array of options available in this process. The future of the industry quite literally relies on it.
MFB: #94 Taxation (Oppose reinstatement of Michigan estate tax)
Farm Journal’s Ag Web