Planning for the Future of Your Farm
Agriculture is the number one industry in North Carolina with forestry and forest products recognized as the largest manufacturing industry. Family farms and forest lands are the backbone of agriculture. Family farms account for ninety-eight percent of all farms in the U.S. and eighty-six percent of its total agricultural output. The economic future of our nation’s agriculture depends on the ability of the next generation to enter farming. Today numerous factors are challenging the existence of family farms: an aging farm population, growth and development pressure, and limited land assets to support the expansion of farming and forestry operations.
Farmers in Lee County, as across the state, are an aging population. The state’s average age is 57 years old, and Lee County’s is 56.2. The next generation of farmers are slow to come about due in part to the belief that farming is not profitable, is too demanding, and the start-up costs are prohibitive.
The barriers faced by the next generation are creating a crisis in agriculture. The future of US agriculture depends on the ability of the next generations to establish successful farms. One of the biggest challenges to entry is gaining access to affordable and secure agricultural land. At the same time, exiting farm families face unprecedented complexities regarding succession. An estimated 70% of U.S. farmland will change hands in the next twenty years. If an exiting farm family has not adequately planned for succession, it is more likely to go out of business, be absorbed into a larger farming operation, or be converted to non-farm uses. In these scenarios, impacts of farm entry and exit on rural communities, the environment, and the national economy can be significant. The need for estate planning to accomplish a smooth transition of land ownership and the future success of the family farm business has never been greater.
There are numerous multi-generational farm operations in North Carolina today. However, few of these farm families have planned for what happens to the farm when the person who currently makes the major decisions decides to retire or passes away. Farm transition is a comprehensive process of keeping farms in production as they pass from one generation to the next. Transitional planning can help to alleviate the obstacles that successors will face, while ensuring the continued financial health of the farm family and business.
Cooperative Extension in Lee County, Mount Olive College’s Lois G. Britt Agribusiness Center, and USDA Risk Management Agency will be holding a daylong estate planning session for farmers and forest landowners on January 16. Topics to be covered include basic estate planning documents, probate, income and estate taxes, starting the transfer conversation and letting go. A pre-registration fee of $10 per person; $5 for each additional family member is being accepted at the McSwain.
The many challenges facing our farm families will threaten the generational transfer of family farms unless landowners begin to plan for the future. Planning now will aid families in determining the best options for their land and the potential for keeping it in production. For more information on this upcoming program, contact Cooperative Extension at 919-775-5624.
Susan Condlin is County Extension Director for North Carolina Cooperative Extension in Lee County.