Planning for the Future of Your Farm
Published in the June 30, 2018, edition of Lancaster Farming
As I travel across the state and talk with my fellow farmers, one of the most pressing topics seems to be the stress of planning for the future of your farm operations. For most of us, our farms are our legacy. As a fifth generation farmer myself, I certainly understand how important it is to pass that legacy along to our children, grandchildren, and so on.
Many of us are getting to the age where it is time to start thinking about our next steps. We all put a lot of blood, sweat and tears into our farms, and it is often hard to imagine giving up any piece of the operation. I have learned that much firsthand.
My family started farming in Baltimore County in the 1840s. My great-grandfather purchased our homestead farm in White Marsh back in 1903. Through the years, development pressures led us to diversify and shift the operation to the Eastern Shore. Over the past few years, I have started the process of handing the farm operations over to my children—it has taken time, patience and, most of all, good planning.
One of the first steps to planning the future of your farm should be to identify who is involved, and how that transition will take place. This is an exercise that should include the entire family, because these plans are bound to have an impact everyone.
It is important to remember the many pieces involved in this transition: finances, farm operations, tax/legal expertise, etc. For that reason, it is important to consult an expert. There are many different firms and consultants that offer specialized assistance with farm transition planning. This helps navigate the many unexpected issues that can arise throughout the process.
For instance, while federal tax code helps reduce farmers’ income taxes, it can create an unexpected, unpleasant spike in taxable income when a farmer decides to retire. This is where working with an expert is critical. Professional transition planners can help you identify ways to lessen that burden and keep it from hindering the future of the operation.
Another important piece to consider is land preservation. In Maryland, there are multiple programs at the state level that incentivize landowners to keep their land out of development. The Department of Natural Resources has the Maryland Rural Legacy and Maryland Environmental Trust programs. At the Department of Agriculture, we have the Maryland Agricultural Land Preservation Foundation (MALPF).
MALPF purchases agricultural preservation easements that forever restrict development on prime farmland and woodland, and was one of the first programs of its kind in the United States. This has allowed us to keep more than 400,000 acres of productive land in agriculture, and out of development. If your operation is in area susceptible to development, I suggest you consider one of these preservation programs as an option.
Succession planning is a tough process full of potential challenges and missteps. A recent study showed that 70 percent of farming operations are not successfully passed down to the next generation. Luckily, there are many resources available to help us turn that trend around. I urge all of my fellow farmers to meet with a professional transition planner and do all you can to ensure your farm has a bright and profitable future for generations to come.