Dear Michael: We've reached our mid-sixties and over the years have transferred a good deal of our transitory assets – machinery, livestock – to our farming child. I get to use his equipment for a change rather than the other way around. I've got a few head of cattle to keep busy, but other than that, he has all of the other items.
The problem is our land. Land has appreciated so much in the past five years – it's doubled in that short period of time. So although our farming child has a good start on owning farm assets, he still owns little or no land. How do I be fair when it comes to this situation between my farming child and my other children? He's getting deeper and deeper in the hole as the land appreciates. – Appreciation.
Dear Appreciation: I'm glad you've done such a good job of turning over the working or transitory assets of the operation. Mid-sixties to seventy is the perfect time to turn over these type of assets and let your farming child take over the day to day expenses of the operation as well as replacing livestock and machinery. If you've done a good job raising him or her, you should know by now whether or not they are capable and ready to take over the reins.
Farming requires two basic inputs in order to grow and survive in today's world – money and labor. If you don't have either, then the farm will start to whither and die like crops without moisture. Farming is a very labor-intensive operation.
Looking back at the times when farming wasn't so profitable, what kept your farming operation afloat? Those times when income wasn't so easy to come by.
Usually, it's because you and your son worked on the machinery to keep it going for a few more years. Or you worked to make certain your crops were of the highest quality by running them through a dryer.
All these little labor equities over the years have brought you to where you are today.
Many non-farm children see the recent good times in farming. What needs to be pointed out to them is when money was tight; you and your farming child lived on little or nothing. You didn't drive new cars or buy new equipment or go on grand vacations. There were many times when a grand vacation meant going to the local restaurant on Main Street for a Friday night hamburger special.
Children off the farm need to be reminded that it was the farming child who stuck it out through the eighties and nineties when farming wasn't fun, wasn't very profitable, and needed a lot of hands on labor to keep everything together.
Now that farmland values have changed, who should share in the appreciation in this land? Wouldn't it be the child who stayed when times were tough and stuck it out or should it be all of the children – even those who haven't invested their lives into the business of agriculture – who should share in this new appreciation in land values?
Many non-farming children forget that if their sibling hadn't stayed home to provide one of those basic inputs – labor – there likely wouldn't be a farm to argue about today. They forget when you purchased your last pieces of land that if it weren't for your farming child sticking by you, you couldn't have afforded to add on to your acres the way you did over the years. By living on little or nothing during these years, this farming child actually subsidized the purchase of those assets. There's no way you could have afforded to use hired help and pay off debts, acquire more land, or grow the farm operation into what it is today.
I understand a lot of people cut out my article every issue – I have many people tell me this and I'm grateful they think what I have to say is worthwhile hanging on to.
If there was ever an article that you should cut out and either show it to your non-farming children or even tuck it into your will, perhaps this is the one to explain how the farming child received more of the farm business than they did. In good old fashioned vernacular – 'because he earned it'.
Everyone has options with their lives, and your farming child chose this option and, ultimately, it was this decision that put you and your farm operation where it's at today. None of the children who left the farm business can say that – and therefore should take a hard look at the history of your farm business and realize how important it was the farming child devoted his life to the farm business and, in many ways, to you.