Before the younger generation returns to the farm, there needs to be a frank discussion between the younger and older generations. It is essential the discussion covers what skills the younger generation will bring back to the farm.

Furthermore, how these skills will be used to generate additional farm revenues to pay for their salary as well as enhance farm profitability should be discussed. 

In addition, the discussion should include answers to questions such as: Do they have a passion for agriculture? Do they enjoy working with production and financial records?  Do they have a strong work ethic? Are they willing to work long hours? Can they handle the emotional and financial rollercoaster driven by low prices, droughts, floods, and so on? Are they able to effectively manage people?

A job description should be written which defines the younger generation’s duties and responsibilities. The parameters that will be used to measure the young person’s success in managing the delegated tasks will be included in the job description.

All of these questions must be answered before the younger generation is given the opportunity to enter the farm with management responsibilities.

There are several important keys to the successful transition of management responsibilities from the older to the younger generation. 

First, can the older generation sit on the sidelines and let the younger generation make mistakes when they are learning to manage their part of the business; does the younger generation learn from their mistakes?

Second, does the younger generation feel comfortable soliciting advice and discussing potential changes in the business with the older generation? In contrast, if the younger person makes a suggestion, is the idea quickly dismissed by the older generation and told that the idea will “never work on this farm”. 

The older generation can easily dampen a young person’s enthusiasm for wanting to work in the family business by criticizing their ideas and bringing up past mistakes.

Bear in mind, part of the older generation’s reluctance to implement the younger generation’s ideas may be the older generation’s perception that changes in the operation of the farm may jeopardize their equity in the business. On many farms, this equity will fund the older generation’s retirement.

Many younger managers fail to understand that the preservation of a farm’s net worth is a dynamic, not static, process and that each generation must be in the wealth creation mode. A business whose primary goal is to maintain the status quo will go backwards and eventually go out of business.

The preservation and expansion of equity are one of the key components of the successful transition of management responsibilities to the next generation.

When the younger generation returns to the business they should be given responsibility for a small part of the business. 

For example on a dairy farm, the younger person will be given responsibility for managing the milking herd. Culling rates, calving internals, pregnancy rates, and somatic cell levels are parameters that can be used to measure an individual’s performance as a herd manager. 

As the younger generation proves they can increase farm equity, they are given additional responsibilities.