Farm Mediation Can Serve Multiple Interests

Some of us are fortunate to have the opportunity to work into a management or ownership position in a family farm business. There can be numerous benefits, both personal and financial, to being in a family business. Often there is substantial equity and an already-established business opportunity.

Complications can arise, however. Markets can change, new competitors can crop up, new technologies are born. All of these changes can increase productivity and financial success, but can also increase stress and tension on the family farm. Some owners may want to slow down and hold steady, being unwilling to risk their personal assets by expanding or growing the business. Other owners may be excited to make changes and further enhance the existing business. These competing viewpoints can often lead to problems.

Aging owners are faced with the challenges of creating personal and business liquidity for retirement, developing an estate plan that includes non-business heirs and finally enjoying the hard-earned fruits of their labors. New owners can be faced with the challenge of establishing their place in the pecking order or dealing with uncertainties about the future and the financial stability of the operation. The timing and method of transferring ownership and management responsibilities is a sticky issue that requires preparation, knowledge and the cooperation of both generations.

Family farm businesses can become even more complicated when two or more siblings are involved or want to become involved in the business. Successful businesses have various levels of management and provide rewards based on merit, not family ties. The impulse of the farm family is to love and treat all children equally, despite the fact that siblings come into the business at different times with different skillsets and motivations. Differing work ethics can create problems, as well. Can the business accommodate the personal growth, needs, and standard of living of all the families that will be involved? And how is that best accomplished?

These matters can be further complicated by marriage. New spouses often come from different backgrounds and are perhaps not familiar with or appreciative of the farm’s traditions or the demands that the business makes. What role or voice will they have in the business decisions that affect their families?

Some other issues to consider are:

How does a farm family…

…protect itself from the waste and extravagant consumption of spendthrift heirs?

…curtail the greedy aspirations of in-laws?

…convince the older generation to give up control?

…stop feuding brothers from destroying the family?

How does mom, the default mediator, keep from having a nervous breakdown while all this is going on?

Where do farm families turn to prevent simmering problems from exploding and destroying an otherwise sound and successful business?

These are all significant issues that take considerable thought and effort to work through. Yet the rewards of a family business are substantial and make the effort worthwhile. Unfortunately, attempts to solve the problems of intergenerational farm family operations can require expertise that goes beyond the family’s skills.

Family farm mediation services can help. Often the process will begin with a meeting between the mediator and the key family members. Ground rules and goals for the meeting are outlined and an agenda is formulated. Agenda items may include the future of the farm, retirement, semi-retirement, management issues, and effective farm family transition of ownership and management.

Some other issues that may be addressed are resolving past hurts and disputes, facilitating forgiveness, mediating thorny issues, and improving communication skills. The current system for how decisions are made is reviewed. Farm management techniques can be shared to assist in processing major farm decisions.

Respect and fairness are central to this process while focusing on making sound business and family decisions. Any agreements, plans, or commitments that come about during the meeting are recorded and then reviewed and affirmed at the end of the meeting.

Seeing a farm family work together ensures that the business enterprise is renewed with an open expression of ideas and cooperation, while enjoying an absence of tension, judgments or angry outbursts. The process of working together as a family can be fun and fulfilling again.

If you’re currently facing conflict or would like to take steps to prevent conflict from arising, call Iowa Land Sales & Farm Management for a free consultation.

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