The discussion revolved around agriculture media’s coverage of adoption, or lack thereof, of new or emerging technology or processes — and how media thread the needle between naysaying and naked boosterism.

One of the participating farmers spoke of a drawback to being an early adopter of a beneficial management practice or technology.

Most farmers want to be good stewards of the land and environment — and when new technology seems promising and a feasible opportunity arises, they’d like to try it out.

Problem is, he said, adopting that new technology or system will cost you — and what’s worse, only after you and other early adopters have proven the concept, along come governments with grants or other incentives for your neighbours to follow suit.

In effect, you’ve been penalized for early adoption, he explained, so what’s the point? Sure, as the saying goes, a good deed is its own reward — but there’s no line on your tax forms for that.

What’s needed in lieu of such grants, he said, is a tax credit for innovation in farming — which sounded more than reasonable while I sat there taking notes, but the metaphorical devil will be, as always, in the details.

For one thing, who gets to define “innovation?” Well, for tax purposes, it’d be government — the same folks who waited for proof of concept before offering up those grants for adoption of approved BMPs.

Frankly, they have good reason to be hesitant. No bureaucrat, nor anyone else, wants to see their name in an auditor general’s report, in two or five or 10 years, detailing potential tax revenue lost in credits granted to bad ideas. Or to good ideas executed badly. Or to snake oil salesmen, et cetera.

Therein lies the catch-22. I wrote here a few months ago about Canada’s glacial pace of approvals for new crop chemistry — a topic our colleagues at the Western Producer more recently covered extensively.

For the sake of our competitiveness as an ag-exporting nation, we need nimble, flexible decision-making, but the safety of the public (and its tax dollars) demands thorough due diligence. In short, there’s another needle to be threaded and Canada is stabbing itself repeatedly.

‘Overly reliant’

Before the conference I’d set aside a recent report to read later, prepared by Farm Management Canada for the Canadian Agri-Food Policy Institute (CAPI), titled Striking the Balance: Proactive Strategy Versus Reactive Response. The report’s key premise is that Canada’s ag sector has been “overly reliant” on the government suite of business risk management (BRM) programs such as crop insurance, AgriStability and AgriRecovery as “the only risk management solution.”

CAPI calls for a shift in focus to “proactive planning, prevention, and preparedness through skills development, advisory services and incentive-based programming.”

BRM programs now in place “are largely reactive, helping farmers cope with the fallout from weather events, market fluctuations and trade policy,” the report says. “What is missing is a concerted effort and programming to help farmers become more proactive, by planning ahead and developing the skills and practices to build their capacity to face future challenges with confidence and certainty.”

Put another way, it proposes to shift your focus away from paying fire insurance premiums, toward building the house least likely to burn down.

The report doesn’t propose scrapping those programs farmers need to react to disasters, but rather notes “the long-term resilience and prosperity of Canadian agriculture depend on shifting the balance toward proactive strategies.”

And don’t even get it started on AgriInvest, which the report calls for “re-examining and possibly eliminating,” as it “has minimal impact on supporting risk management.”

Of course, it acknowledges, “while some of these recommendations require financial support, others simply require effort. In any case, in order to be successful, they all require sustained, nationally-led and co-ordinated support.”

Interestingly, it also calls for a major review of risk management extension programs in Canada, “including the possibility of adopting and/or adapting the U.S. extension model.” And it would “incentivize comprehensive risk assessment and planning through grants, tax credits and improved access to risk management programs.”

It’s an interesting concept, to be sure, and not unheard of. Many years ago I chatted with a CEO who was a proponent of this idea in his personal life, preferring to invest in risk mitigation rather than insurance wherever possible. I mention he was a CEO only to burnish my point that this form of risk management takes some serious upfront investment — and, if you place any value on your time, the “effort” mentioned in the report also costs money.

All this brings us back to our farmer friend at the conference, and his concern early adopters are essentially penalized for investing in beneficial practices and technology before government gets in on it.

I can’t say to what extent CAPI already has the ear of decision-makers who would be on the hook for any grants, tax credits or other supports for this sort of risk management. But if it does, where’s the incentive to continue for any farmers who have long since started work to reduce their reliance on BRM programs? Should they just put that effort on hold now until public funding comes along?

Come to think of it, have I just helped to set back the whole idea of proactive risk management by mentioning this report even exists?

As always, drop me a line with any questions, concerns or comments of your own.

The post Editor’s Rant: Reward v. risk appeared first on Grainews.

The driving force

I have worked in multiple accounting offices in my career thus far, and each office uses the same primary driver to determine invoice amounts for clients – time. Some of you may be thinking, “Well, my accountant doesn’t charge me for every phone call or meeting.” While you might be right, the time still likely gets tracked on your file to determine how much your overall bill should be. So, consider this when interacting with your accountant — make sure you are getting value out of your conversations and meetings.

READ MORE: Common pitfalls in farm finances

One of the largest, most time-consuming factors reflected on your bill is messy bookkeeping. This is one area that farmers typically have some control over. For some of you, bookkeeping is a thorn in your side, and the idea of spending more time learning how to improve your processes sounds like a nightmare. That’s OK — you might just pay your accountant more. But, for those of you who want to see your next accounting bill go down, it might require some effort on your end to understand what improvements need to be made.

The best way to achieve this is by thoroughly reviewing and understanding the adjusting journal entries your accountant has made to your records. If you are unsure of why amounts were adjusted, it is likely that the same error will be made again next year, costing you a second time for the same mistake. It may not be realistic to eliminate all adjustments, as some are a result of complex calculations, such as your tax amounts. However, as a rule, the fewer the adjusting entries, the lower your overall bill is likely to be.

Make the most out of your meetings

When dealing with the same accountant for years on end, annual meetings can become somewhat routine — lacking in the value they once had. While more time gets consumed “catching up” with your advisors, it can feel like significant time was spent sitting in a boardroom with little or no insight gained. So, here is what you can do to make sure you are paying for valuable time with your accountant:

Take some time to reflect on the prior year’s operations in advance. This time of reflection can add a lot of great discussion to your meeting. For example, consider asking for a copy of your financial statements prior to the meeting so that you can go through it in detail ahead of time. Even if you don’t understand every detail of your financial statements, reviewing them first could highlight areas worth discussing.

Come prepared with questions. I have had meetings with individuals who come with pages of questions and it usually adds a lot of valuable insight to both parties. It helps guide the conversation as well as provides your accountant with a deeper understanding of what is important to you and your business. This understanding can ensure your accountant is considering your values and long-term goals throughout the year. As rules and regulations are constantly changing, if your accountant knows what your goals and concerns are, it’s easier for them to strategize on your behalf as new tax rules enter the arena.

Less can be more

Logically speaking, bringing your files to your accountant should make things a lot easier for them, right? Wrong. While this might be a point of convenience for you, you are likely paying for it.

I have had clients bring in what feels like the entirety of every record in their office. Every invoice, every receipt, for the entire year. Yes, this means that if your accountant needs to see a bill of sale for a new combine you purchased in the year, they can just go get it from your mobile office. But this also means you are spending money for your accountant to look through your records to try and find it. Not every farm has the same filing system as you. And nobody knows yours better — making you the most efficient at finding what’s needed.

So, give your accountant only what they need. It may take some time to understand what it is that they need and why but having a discussion with your accountant the next time you meet with them could help highlight what “typical” records are required for your accountant.

Hiring the right accountant

While this may not be a required step for some of you, I have had many conversations with farmers who are not satisfied with their current advisors. Some spend years dissatisfied with the same accountant because it requires effort to make a change.

Some might argue that there is a benefit to keeping the same accountant because they understand your farm history. While this may be true in some cases, if your current accountant is not meeting your needs, sometimes a fresh pair of professional eyes can make a significant impact on the profitability of your business.

Finding the right advisor for your needs is critical. So, if you have been thinking about making a change, here is your permission to shop around for a new accountant.

Across the board, professional fees keep rising with inflation and the demand on accountants continues to increase as fewer individuals enter the industry – a recipe for larger bills for everyone.

By reducing your adjusting journal entries, coming prepared to your meetings, cutting out the excess information and ensuring you are working with the right accountant, you might just have a fighting chance at keeping more money in your jeans while still gaining valuable insight from your advisors.

The post Save on your farm accounting fees appeared first on Grainews.

The Appreciative Inquiry process has challenged our approach to problem-solving. How could focusing on the positive elements of our family business resolve conflicts? It sounds contradictory, doesn’t it?

As proponents such as David Cooperrider, Diana Whitney and Amanda Trosten-Bloom explain, Appreciative Inquiry is a flexible exercise for organizations seeking a positive mindset shift. It’s a nine- to 12-month exploratory journey, a process of rediscovery and realignment. Like machinery, farming family teams require alignment, organization, strength-building and planning spaces.

As Cooperrider puts it, ‘Appreciative’ is defined as “recognizing the best in people… affirming past and present strengths, successes, and potentials” while ‘Inquiry’ refers to “the act of exploration and discovery, asking questions.”

The process involves several individual conversations and family meetings that will discuss topics divided into the “four-D” cycles of conversations: Discovery, Dream, Design and Destiny.

Discovery: Being curious to ask positive questions

These conversations are about “uncovering what gives life to your farming family.”

Sit down with each family/team member and ask curious, positive questions. Let them openly share their strengths and discuss the strengths they see in the entire family. Encourage them to share examples where the family team demonstrated these strengths. Prepare to be open, avoid judgment, listen attentively and understand your family team’s aspirations, dreams and goals.

This cycle offers an opportunity to reconnect, understand your family team’s strengths and, most importantly, listen to their goals. Often, family business goals are overlooked or dominated by a few members. However, setting goals collaboratively inspires the family team because goals are the compass for the farm.

As Mexican businessman Arnoldo De La Rocha says: “Those who don’t know where they are going have already arrived; don’t stress about it. On the other hand, those who know where they’re going have an advantage. There’s no favourable wind for those who haven’t set a course. We need to know where we are going. The world co-ordinates to clear the way for those who know their destination.”

Setting goals as farming families is the first step to moving forward. Start building a strong team by involving everyone in setting farm goals. What goals are hidden within your family team?

Dream: What are we called to?

This is one of the most inspiring processes in any organization; it’s an opportunity to exercise your imagination and envision an inspiring organization. Based on your family’s discovered strengths, you’ll formulate a vision for your farm in this stage. This process will span multiple meetings, where each member brings and reflects collectively on their ideas. At each meeting, you will agree on statements to shape the farm’s future vision. Your goal, as Cooperrider puts it, is to answer the question: “What is the world calling us to become?”

Design: What needs to change?

In this phase, you begin to make changes so that the dream/vision from the previous cycle gains traction in the organization. This cycle addresses what needs to change on the farm to achieve its vision.

For founders, it’s crucial during these conversations that you can stay open to considering making changes and be very clear about expressing your concerns and needs with the intention of finding solutions. Remember: Appreciative Inquiry is grounded in those positive and real moments when your family practiced its strengths.

Destiny: Daily decisions for change

This phase reminds the organization that a process such as Appreciative Inquiry requires a firm grip on family values and adopting and practicing new principles.

Appreciative Inquiry stretches our thinking and reactions to the world. It also invites us to embrace five principles that will generate momentum to move forward and get unstuck: co-creation, simultaneity (readiness to change), poetic, anticipatory and positive. It will challenge and transform your family farm as much as you are willing to align your thoughts, words and actions with these five principles:

• Co-creation: It reminds us that, as Chuck Page put it, “a single leaf working alone provides no shade.” A family farm is a collective project that should engage in dreaming, planning and envisioning together, in addition to handling daily chores.
• Simultaneity: It reminds us that change occurs in our daily small decisions. Respect grows as much as I commit to speaking respectfully to my partner, children and siblings. Visions should be crafted to be lived out daily.
• Poetic: Human organizations, according to Cooperrider, are “more like an open book… An organization’s story is constantly being co-authored. Past, present and future are endless sources of learning, inspiration and interpretation.” Every past, present and future member of your farm family writes and will leave a message in your legacy book. What would be the title of your family book?
• Anticipatory: “Our positive visions of the future guide our positive actions,” Cooperrider says. It’s about choosing the path we want to take every day. Do we approach life challenges with appreciation for the people and resources we must face?
• Positive: This is the most life-giving principle. It calls us to stay connected and appreciate the people we work with — “to be rich in relationships.” What actions, routines and practices in your family/team can sustain “hope, excitement, camaraderie, a sense of urgent purpose, and sheer joy in creating something meaningful together”?

We hope this inspires you to embark on a process such as Appreciative Inquiry, to co-create a better “farmily.” May you discover the richness in life while serving the farm and family.

The post Focus on your family strengths to move forward appeared first on Grainews.

But as of the middle of December, potential profits from growing grains, oilseeds and pulses are looking grim in Western Canada.

“Costs have come down a little bit in 2025, but they’re still really high. And crop prices have gone down faster than our crop input (costs),” says Darren Bond, a farm management specialist with Manitoba Agriculture.

“We’ve seen this before in farming, but I’m not sure we’ve seen it so quickly.”

Every year, farm management experts with the province assemble a cost of production guide for crops.

An early version of the guide was available at the Manitoba Agronomists’ Conference, held Dec. 11-12 in Winnipeg.

Bond went through some of the numbers while speaking at the conference. The estimates show profits will be elusive in 2025 — especially for farmers with higher land costs.

“We do (analyze) 16 crops. We only have one crop showing profit after it has been fully costed, which is pinto beans,” Bond says.

“Fully costed” means the operating costs of producing a crop, along with land, machinery and labour costs.

Operating costs have dropped compared to 2024, but the prices of inputs are still relatively high.

Bond warned growers about this “lag” scenario 12 months ago.

The lag is where prices per bushel for canola, wheat, oats, peas and other crops have declined, but inputs such as fertilizer haven’t dropped an equivalent amount.

During his talk, Bond pointed to a fertilizer affordability chart.

“How many bushels of grain does it cost to buy one ton of urea?… It’s come down off its highs, but it’s still relatively expensive,” he says.

“That’s not the bad one. Let’s look at phosphate… Considering how much these crop prices have come down, phosphate is super expensive.”

Less canola in 2025

Canola is a good crop to illustrate what farmers are facing in 2025.

Last year, the Manitoba cost of production guide had the following estimates:

• Operating costs for canola — $456 per acre
• Target price — $15.75 per bu.

In 2025, the guide says for canola:

• Operating costs —$418 per acre
• Target price — $13.25 per bu.

The price of canola has dropped by 16 per cent, but operating costs have only declined by eight per cent.

Then, there’s the matter of yield.

For much of the last 15 years, canola has paid the bills for western Canadian farmers.

However, canola yields are getting unpredictable, says Roy Arnott, who oversees the team of farm management specialists with Manitoba Agriculture.

“Canola is becoming less stable. You’ll have one farm that has 35-bushel canola and 50-bu. canola, on the same farm,” he says.

“That stability seems to be (fading) with canola, with challenging conditions. Short canola goes flat. Tall canola goes flat. It’s getting harder to manage canola to get those high yields.”

Given the economic and agronomic realities, some growers may switch to crops that require less fertilizer, have lower seed costs and are easier to manage. In other words: they’ll choose less risk.

“What are we going to do with canola acres in 2025? It’s really tough to know,” Bond says.

“I do see, based on my conversations with farmers, people are going to back off… the canola.”
However, such predictions have been made in the past. Prairie farmers have a history of growing canola, and a lot of it, despite the risks because the oilseed can be highly profitable.

Return on operating costs

Arnott and his team at Manitoba Agriculture have added some features to the 2025 cost of production guide for crops, such as estimates for return on operating costs.

“What are you getting out, for what you’re putting in?… That is new,” Arnott says, explaining it is profitability based solely on the operating costs of producing a crop, such as fertilizer, seed and crop insurance.

“If you look at something like oats, it’s sitting at a 58 per cent return on operating. Canola, right now, is sitting at 43 per cent. Inexpensive crops that still have profit potential are going to look better.”

With costs remaining high and crop prices relatively soft, it’s obvious farmers are in a different era than they were during the good times of 2021-23, Bond says.

“Economics do influence agronomic decisions. Things have changed… so we have to be aware of that,” he says.

“We have to be wise with our investments… I really think this year coming up… if we manage our fertilizer well, we can protect that yield. Protecting the yield is something that’s very important and something I’ll be speaking about this winter.”

The post Expect smaller margins for error in 2025 appeared first on Grainews.

The new system consolidates all of Claas’ existing digital platforms in one location.

“What we will be rolling out (Oct. 1) is our latest iteration of what we’re calling our Claas Connect platform,” says Claas’ product marketing manager Kacy Sampson. “Claas Connect exists today, but it’s not all-encompassing of all of our precision farming and digital solutions features.”

On the new platform, she says, all of a farm operator’s Claas machinery, dealership, shop and parts information and telematics will be “in one place and accessible through one user login, one profile, versus all the different platforms, putting everything in one group, accessing all the different digital features we have at Claas.”

The new platform will also have a new and more user-friendly look. It also allows for a close working relationship with the local dealer. Producers will now be able to set up their new Claas Connect account and transfer all their current machines to it.

“On Oct. 1, current Claas Connect users and anyone new who signed up will be prompted to create a new Claas ID,” Sampson says.

“Previously we had different logins for all the different features. Now they’ll be prompted to create one new user account and that will grant them access to all the machine information.”

A farm’s machines are registered by serial number, so getting them included in the newly upgraded platform should be an easy procedure. All previous data linked to those machines will be automatically transferred with them.

“Something not currently in the Claas Connect platform but will be on Oct. 1 is what we’re calling the organization structure,” she adds. “This allows the owner of the farm or the manager to create the account. They are then able to invite all the employees on their farm to join that account. Depending on their role on the farm, it has different capabilities and accessibility points.

“If they want to use the mobile version, an app is preferred. But they can use the desktop version, even on a tablet, it would be available on connect.claas.com.”

With the new platform going live, Claas will be adding additional features over time.

“Yield maps will not be accessible on Oct. 1 but will be available in the near future as part of this. That’s the direction we’re going.

“We’ll continue to roll out new features. There’s lots ahead in the future as far as what will be added to the platform and different licenses will be available within it.”

The post Claas upgrades its digital offering appeared first on Grainews.

It’s time to get rid of your negative mindset around conflict.

Drop your hand from covering your face, look up and see the eyeballs of the person who needs to understand your needs, and start calm, respectful conversations with your family and farm team.

Can you embrace the idea and mindset conflict is not bad? Tension in making quick decisions in harvest time or other times of high stress does not have to cause instant blow-ups. The culture of your farm is what you believe to be true (your values), how you behave toward one another, and how you make decisions.

Positive conflict behaviour looks like this:

You express your emotions in a healthy way

“It really frustrates me when you cut so high because the field operator in the fall is going to have issues with the high stubble. Would you please lower your header to this number…?”

Slamming the pickup door and not talking is the way to keep your conflict unhealthy. Use a wide range of labels for how you are feeling or being impacted by other people’s behaviour.

“We go to a lot of work to support you in the field and we really feel valued and appreciated when you make the effort to bring the meal buckets home to the back door as a sign of courtesy to us. Thank-you for being considerate of what we need.”

You create solutions and don’t attack the person

“Wow, that combine is really plugged up, you are such an idiot, why can’t you every learn to slow down?” Yikes!

Practice attacking the issue. “The combine is plugging too much, have you figured out why? Mine is set like this, and this is the speed that’s working for me today. Let’s see what solutions we can work out for the plugging to stop for you.” Lumpy swaths may be operator error, or high winds!

You are willing to reach out to check how others are doing

“How are you doing, are you OK?” is much more helpful than asking “How are you?” Look people in the eye as you listen to their response. Head down, or avoidance of eye contact, is a non-verbal answer things are not OK. Reaching out to others is a positive conflict behaviour. The receiver gets to choose their response, and you as the sender of the message cannot predict the response. Everyone gets to choose if they are going to be kind, calm and respectful. The receiver can also ask for a timeline to be able to process the response rather than swearing, yelling or throwing a shovel in frustration. Bad behaviour is not tolerated on healthy farms. You get the behaviour you accept, so why are you accepting bad language and violent outbursts?

You are willing to adapt

Farmers are masters at adapting to challenges. During the high stress of harvest, you can choose to monitor your physical, emotional and mental health with good choices: rest, good food, encouragement from others, connection to your supportive family and friends, happy radio banter on the two-ways, and positive texting with appreciation. Your language and behaviour set the tone for each long harvest day.

“Being clear is kind,” says Brene Brown, a well-known researcher on vulnerability. Machines don’t talk with words, but they vibrate, clunk and don’t sound well, and you stop. People are not machines. People need to be able to ask for what they need and know their voice is respected and heard. Perhaps it is time to ask your crew, “What’s the most important thing you need today to make it a great harvest day?”

Put yourself in someone else’s shoes

Do you know what it feels like to be over 70 with a tender back and spend 13 hours in a combine seat? Is the grain cart operator clear about what it means when lights are blinking, and you have your auger out? Don’t make assumptions your behaviour is well understood; check in with the other person. Try to imagine what it feels like to be a parent with three active young children trying to keep up with the field demands of harvest and the crew.

The ability to shift your perspective is a huge positive conflict behaviour. As folks age on the farm they may lose confidence in their abilities, especially if the environment is highly charged with blame and bad language. Young people also need positive feedback and constructive comments to help them gain more confidence in completing their tasks well.

Avoiding conflict just allows an issue to grow and the ability for reasonable solutions to wane as time goes on. “Stuffing your anger, hurt, fear or frustration” is the recipe for a volcanic event, also known as a blow-up. Conflict avoidance is not helpful. Ask for time to have a conversation. Make your request for a change in behaviour. Seek permission to create solutions together.

You can change your mindset, thoughts, language and actions. You can set the tone for a healthier culture on your farm. If you need more concrete encouragement on how to do this, listen to my podcasts. Have a safe harvest and encourage the heart of your farm with kindness and appreciation.

The post How to clean up your conflict filter appeared first on Grainews.

There’s a great article by Kells McPhillips on the Well+Good website, calling out these conversation stoppers as “thought-terminating clichés.” Here’s her list:

• “It is what it is.”
• “So it goes.”
• “It could be worse.”
• “Time heals all.”
• “Someone out there has it worse than you.”
• “What doesn’t kill you makes you stronger.”
• “It’s always darkest before the dawn.”
• “This too shall pass.”
• “It’s all about balance.”
• “Try to look on the bright side.”
• “The sun will come out tomorrow.”
• “The only way out is through.”

Words really matter. Our thoughts become words and words spur on action — or the lack of action. What we believe to be true is part of how we craft the culture of our farms.

The first such cliché in McPhillips’ list above, “It is what it is,” sounds so defeatist to me. As coaches we embrace the power of choice. You get to choose your response to the circumstances of your family and farm situation. Are you going to be proactive and make some decisions for a better outcome? Or are you just going to throw the shovel hard on the ground and believe “Nothing is ever going to change around here”?

“It could be worse” aligns with the misery you’ve witnessed of neighbours or others in the ag community whose farms have disappeared due to unreasonable estate land transfers, divorce, or siblings in litigation. These sad stories of transition gone poorly are not helpful, nor are they motivating folks to act and improve the communication and conflict resolution in their own farm business. Failure of others is not a strong motivator for you to change. You need to draw on internal factors of motivation to do hard things.

You can do hard things. You also don’t have to do them alone!

“The only way out is through.” I just said you can do hard things, but who agrees that transition through facilitated communication doesn’t necessarily need to be hard? We’ve bought into a mindset that conversations cause explosions, so the best thing to do is just avoid the hard conversations about income, compensation, fairness, and letting go of management. I disagree.

Conflict resolution can be a process of discovery, lifting a huge weight of tension. Facilitated conversations, in which folks are prepared before the meeting to express what they truly want, can be transformational. If you’ve put your energy into your farm business for the past 40 years, you might want to be kind to yourself and take time to process the shift of labour, management and ownership over the next several years.

READ MORE: Agriculture community invited to ‘talk it out’ about mental health

The list of 12 clichés above can damage mental health. If you are struggling with your mental health right now as you read this, I encourage you to reach out to your doctor for a checkup and find the local mental health worker in your area. If you are walking alongside a very depressed sad farmer, I encourage you to sign up for the Mental Health First Aid course.

“What doesn’t kill you makes you stronger” was the title of Dr. Nikki Gerrard’s research (2000) on stress in farm families. She found three keys to coping better were:

• Communication
• Celebration
• Connection to community

However, when you say “What doesn’t kill you makes you stronger,” you are not offering support or solutions to those struggling with mental health. “Pull yourself up by your bootstraps” is another conversation-killing phrase.

How can you be more vigilant about what comes out of your mouth?

Think before you speak

Listen to understand more, not to formulate your next response. Two ears, one mouth.

Be curious. Come to the conversation with kindness and genuine curiosity about what is truly going on for the other person.

Ask better questions without a spirt of judgement. What do you need in this moment? What is frustrating you the most? How do you want me to walk alongside you?

Is now a good time to talk further, or do you need some time to process what we just discussed? By when do you want to come back to the table to create some solutions and timelines for action?

Be careful not to confuse estate planning with transition planning. “It’s in my will, you’ll get it all when I die!” This is classic procrastination of not dealing with the need for transfer of farm assets in the transition process while the next generation is looking for ways to gain equity and the founders are fearful of failure and losing wealth.

Ask for help. Seek out ag-informed advisors with strong facilitation skills so the whole family can learn helpful language for conflict resolution with positive behaviours to create solutions not angst.

Try supportive words to open more communication:

• Tell me more.
• That’s interesting, what is the story behind that thought?
• I’m curious about what you just said, how does that feel for you?
• What ways would you like to be encouraged? Time with family, words of affirmation, or action on the farm?
• Here’s what I am observing…
• What do you need in this moment?
• What’s the next step you would like to take?

Many times, folks just don’t know what to say to comfort others, or to recognize the pain or frustration they are seeing. The Do More Ag Foundation has a great new conversation starter game. My Do More Ag conversation starter box has arrived, and it is helpful to be reminded how our questions and thoughts can create great conversations.

The post Watch your words appeared first on Grainews.

Enter the RACI chart: “Responsible, Accountable, Consulted and Informed.”

Responsible

“Responsible” designates the task as assigned directly to this person (or group of people). The responsible person is the one who does the work to complete the task. Every task should have at least one responsible person and could have several.

Responsible parties on your farm team could be planning the day-to-day work, supervising employees, managing livestock, administrating the farm office — in common language, “the buck stops here.”

The conflict for young farmers is wanting to take on more responsibility but having a manager/founder/parent who refuses to “let go” of being responsible and trusting the next generation to do the job well.

READ MORE: Do the kids really want to take the lead on the farm?

We use a tool, developed by Iowa State University’s Beginning Farmer Center, which we call “the ultimate decision-maker tool.”

Here’s a list of tasks: you rank them with a 1 if the operator (founder) does them alone, or with a 2, 3 or 4 if they are shared with the founder and successor, or a 5 if only done by the successor. If there are lots of 3 rankings, you know decision-making is being shared, and if many are 5s, the successor is taking on more responsibility.

Take these tasks and rank them:

• Plan day-to-day work
• Make annual crop/livestock plans
• Decide the timing of operations
• Decide when to sell crops/livestock
• Decide when to pay bills
• Negotiate purchase of machinery/equipment
• Decide when to hire more help
• Recruit and select employees
• Decide amount and quality of work
• Decide work method/way jobs are done.
• Negotiate loans and financing.

Feel free to ask for the Ultimate Decision Maker tool.

Accountable

The accountable person in the RACI equation delegates and reviews the work involved in a project. Their job is to make sure the responsible person or team knows the expectations of the project and completes work on time. Every task should have only one accountable person and no more.

Accountable parties are typically in a leadership or management role. For farmers, this accountability process may be unclear when there is no formal accountability with performance appraisals. Who on your farms decides the amount and quality of work performed? How clear are your job descriptions?

Consulted

Consulted people provide input and feedback on the work being done in a project. They have a stake in the outcomes of a project because it could affect their current or future work. “Consulted” implies that people appreciate feedback as work is being done, and no one is making assumptions. Poor communication is a common complaint of farm teams. Consulting others for their opinions and input builds trust and creates a culture in your workplace that every voice counts, and not just one person’s way of doing things is the best way. What roles on your farm do you wish to be consulted on?

Informed

Informed folks need to be looped into the progress of a project but not consulted or overwhelmed with the details of every task. They need to know what’s going on because it could affect their work, but they’re not decision-makers in the process.

As a farm spouse, but not an active person working on the farm, I would consider this position as where I need to be. I want to be informed of how activities are going and where I can be a support. I also want to know when we are deciding to make major purchases. On our farm, the founder and successor do lots of collaborative decision-making throughout the day. I need to ask for information to be kept informed, so I might say, “What’s the plan for tomorrow, and where do you need my support?”

Points of clarification

Here’s a list of powerful questions to help you get more clarity about roles and responsibilities on your farm.

• Vision: How do we want family to participate on this farm? Take each person’s name and use the RACI chart beside various tasks to get more clarity.
• Who gets to be an owner? How do they buy in? Do we need marriage contracts or inter-spousal agreements? (Lawyers say yes!)
• What if folks want to exit, or come back to farm later?
• What guidelines do we have for off-farm experience?
• Who gets to work on this farm? (This is a viability question also, how many families can this farm support?)
• How are the main roles or job descriptions determined? (Email me for Dick Wittman’s list of job descriptions to help you get started.)
• What are the farm perks? How is compensation figured out?
• What is the process for hiring family members?
• How do we create a mentoring/learning plan for each generation?
• Who does performance appraisals on family members? When?
• How do we keep family accountable to doing a great job? This is where the RACI chart can help you map out who is accountable for what task.
• What are the guidelines for confidentiality and dealing with suppliers who are family members?
• What is our plan to foster integrity, honesty and transparency?

Asking questions in a formal business meeting is a great way to document and explore the roles and responsibilities that are shifting on your farm. Folks get more energy when they are clear about their roles, skills and passion being in alignment. Founders may have to frame their new role as “being the wise elder” and “stepping back without stepping away.”

Keep talking with curiosity, and volunteer to take on more roles with accountability. You get to build a better culture on your farm as you collaborate.

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I am not a lawyer; you need to seek independent legal advice to draw up cohabitation agreements, marriage contracts, prenuptial (prenup) agreements or inter-spousal agreements. As you can already tell, these agreements clarify who owns what when two folks join their lives and their farms together. In Australia they call folks who are living together, but not married, “almost married.” Many farm couples may not realize that after they have lived common-law for a few years, they are “married” in the eyes of the law. Many farm parents are nervous about what will happen if the next-generation couple splits.

My goal here is to help you consider ways to approach the conversation about prenups, marriage contracts or inter-spousal agreements to protect your family’s expectations and the farm assets.

An elderly farmer was quite panicked when he reached out to ask me to orchestrate a conversation with his successor son and daughter-in law. The farm is worth millions, and the father was uneasy about the strength of the marriage which had already borne some children. Coaches can help you ask hard questions and give you language to come from curiosity. It took about four minutes to determine that both the successor and his spouse were happy to seek independent legal advice to draft and sign marriage contracts. It was intended for the protection and good of all. Crisis averted.

I had another case where the parents who were trying to groom their successor went themselves to the lawyer to get a marriage contract for their union and model this for their successor and his spouse. The prenup agreement was a condition of the transfer of shares in the shareholder’s agreement.

Are you willing to create an inter-spousal agreement/marriage contract as a risk management strategy for your farm?

What do you need to do to get ready to create an agreement?

Know what you have

That is, you need to know your farm and personal assets.

Be clear as to why

You need to be clear about your intent in why this action is important to you for business reasons, and the emotions you are experiencing while creating the document. When we get married, we are not thinking of getting a divorce. We all realize that many marriages fail, and not just the young folks. We had the “divorce conversation” as part of the coaching process with our son and daughter in-law. You might want to have an outside facilitator to navigate this discussion.

Independent legal advice

On behalf of a client, I asked my network for a great family lawyer who understood agriculture and was able to come up with two lawyers in two places, one for each spouse. A good place to start looking is the CAFA (Canadian Association of Farm Advisors) directory. Ask your peer network for referrals.

A considerate approach

Your language of approach with your partner, fiancé or spouse needs to be clear and respectful. Your goal is to have alignment of understanding about your wishes for taxes, assets, financial well-being for all, goals for the children, and success of your farm business while keeping family harmony.

This seems like a tall order if you approach the conversation in a spirit of fear, rather than one of collaboration for the good of the family and the farm. I once had a young fiancé in tears as she did not understand the need for a prenup to get married to her dairy farming boyfriend. Once we framed the exercise of getting a prenup a “business risk management strategy” and not blame or judgment of her from her future in-laws, she was able to wipe away the tears and take a different perspective. It was also helpful to the young farmer that his farming brother had just been married, and it was the business policy of the farm that everyone has prenups.

Remember, situations may vary

Guys with farms are dating women with farms. A young woman in my audience has a dairy farm with her dad and dates a guy who has a farm with his family. People in agriculture are coming to their union as a family with many assets. This also happens with second marriages, when women such as my friend Fran, a farm widow, is then married to another farmer at age 77. We have “grey divorce” and we have “grey second marriage” as people live longer and still seek loving companionship as they age. Well written legal agreements can prevent a lot of future pain and anger in court.

Don’t be cheap

April is wills month and I suspect you need a will, or your current will needs updating. You also need a power of attorney. Spend the appropriate amount of money to hire a good and reputable lawyer to draw up proper agreements.

Ask to see a sample copy. A lawyer friend of mine gave me a sample prenup to share with farm families just to get them acquainted with the language and format of the agreement. Other lawyers said they would never do this! Which lawyer do you think is serving their clients well? Farmers don’t like to feel dumb, so it is helpful to do some research and find out what clauses are typical for farm situations.

Pulling in the same direction is a beautiful thing

Two powerful draft horses pulling hard in tandem is a great visual for spouses in business being in alignment. Two are stronger than one! How you frame the exercise of getting spousal agreements in place is like life insurance. We use life insurance as a tool to provide revenue when folks die, or property is damaged. We buy it, and don’t dwell on it every day. The tearful bride-to-be realized she would be able to be a full business partner with a great attitude, if she were not dwelling on the supposed judgement of her future in-laws. She could work with her husband creating a great farm business and strong marriage. Her documents would protect her, but not define her.

Tell me you have written a will or updated your old one, and I will send you the Farming’s In-Law Factor e-book.

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Nathan Heppner, a certified financial planner, and Erik Forbes, a registered financial planner, reviewed the brothers’ farming interests for Forbes Wealth Management Ltd. in Carberry, Man., and advised Sam and Fred. If the farm prospers and achieves growth at 7.2 per cent per year, as it has done in recent years, then in 25 years, each brother will have a $28.5-million interest. At four per cent growth, their interest will be $13.3 million each. 

Problems arise if one brother dies or becomes unable or unwilling to manage his part of the farm. Each brother will have his own heirs with distinct interests. And, over time, the brothers’ interests may diverge. The challenge is to anticipate changes of status (married or not), mates, children and even the vagaries of life such as premature death or disabling injury. Serious illness or injury that affects a brother’s ability to work also needs to be anticipated, Heppner notes. 

• MORE Farm Financial Planner with Andrew Allentuck

A buy/sell agreement can give priority to the surviving brother. However, if the surviving brother or heirs do not want to continue farming, then the survivor will have to purchase shares from his brother’s heirs. 

It will take money to shift interests under these conditions. The survivor could use cash in the corporation, borrow needed funds or use life insurance. The planning problem is to anticipate value in what could be several decades in the future. 

Each brother could have several children or marital issues. As a backstop, the corporation could set up a compulsory first refusal contract for each brother or have a first in line default payback for any and all farm assets held or make the corporation a creditor first in line for loan repayments. Thus, an attempt by a disgruntled spouse of either brother would require waiting in line behind the prior creditor for payment, Forbes explains. 

Assuming the corporation is valued at $60 million, each brother has equity of $25 million with $10 million in preferred shares to the parents. When both brothers have died, the full amount of future equity must be paid out to the heirs. Assuming they have contributed equally, a fifty-fifty asset division would be fair and reasonable. To anticipate unequal contributions, a plan can be devised to apportion farm value on the basis of work done or other contributions made measured in work, capital investment, loans to the corpora- tion or other means, Heppner adds. 

There are three cases:

1. If there is sufficient cash in the corporation, it could be used to redeem the shares of the deceased brother.
2. If there is not enough cash, then the corporation would have to sell some assets to raise the needed cash.
3. The corporation or the surviving brother might borrow funds needed. However, raising cash from land or equipment sales would be cumbrous and could entail hefty transactions costs.

Life insurance would provide cash on the death of either brother with the farming corporation as beneficiary of the policy. The death benefit would be a credit to the farm’s capital dividend account in an amount equal to the death benefit less the adjusted cost base of the policy. In this arrangement, the capital dividend account (CDA) functions as a notional account to allow the corporation to pay out a tax-free dividend. Then the CDA would eventually flow to the heirs of the deceased brother as payment for shares. It’s worth noting that if funds are invested in a corporate investment account, taxes still need to be paid. 

But with a life insurance policy, the funds would flow to beneficiaries without tax. 

Life insurance is always a pay first, draw benefits later contract. Under Canadian law, benefits are regarded as the property of the designated beneficiary. Therefore, claims for injury or insolvency do not reach the beneficiary, Forbes clarifies. 

Sam and Fred need to take advice from their lawyers, accountants and farm advisers to get their individual interests aligned in a compatible fashion. There are inevitably upfront fees, most of which are deductible from taxes. 

If the farm prospers and throws off cash surplus to its costs, the brothers will have the choice and challenge of diversifying into things they may not know as well as farming or sticking to the farm and adding to its capital. They can cover debts, death of one brother, future family interest and even creditors. However, to the extent that risk grows with time hedged only by present capital or future benefits provided by insurance, they have to carry risk over generations. Keeping each other and their mates informed about their farm’s fortunes is the best way to manage risk and family, Heppner concludes.

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