Aging farmers seek to hand over operations

? With better crop yields and more income from livestock operations, the nation’s aging farmers are worrying less about surviving another season and more about how to pass the family farm on to the next generation.

“Farm families haven’t been able to focus more than a year at a time because of the drought and poor profits made long-range planning impossible,” said Duane Hund, a Kansas State University farm analyst. “Now that farm families are getting comfortable, they are thinking long term. The wolf is not at the door, for the moment.”

Hund is helping more Kansas farm families make that transition now that they can pay back operating debt. The last time interest in the issue has been this high was in 1996, another good crop year, Hund said.

The graying of rural America has gotten more attention lately from farm groups and Extension officials, who see the good times down on the farm as a chance to help families plan for the future.

The Kansas Farm Bureau has scheduled four seminars in McPherson, Cimarron, Topeka and Chanute between March 1 and 8 dealing with long-term financial planning and transitional estate planning for farmers.

Kansas State University also is planning a series of workshops across the state to help ease the succession to the next generation of farmers.

The average age of farmers nationwide in 2002 was slightly above 55, more than a year older than the average age of farmers in 1997, according to the federal government’s latest Census of Agriculture. Only 6 percent of farmers had yet to reach their 35th birthday.

But there also are a lot of 70- and 80-year-old farmers out there, Hund said.

“It is one of the largest challenges we face in agriculture in the next 20 years,” Hund said. “The numbers of retiring farmers who will be succeeded by other family members is going to accelerate. For those transitions to work, we want to make sure we have the processes in place to assist them.”

Driving a tractor used by his father, John Walter feeds cattle on his farm near Greenleaf. Walter inherited the farm with his siblings when his mother died two years ago. As the population of farmers ages, passing on the family farm is becoming a growing concern.

Hund first started working with farmers Leonard and Bonnie Walter during the late 1980s, when the desperate couple turned to him for help during the farm credit crisis that marked that decade. Their son, John, came home to work the farm as they struggled to keep the family land near Greenleaf, a small community 85 miles northwest of Topeka.

“That farm would have been sold and liquidated if it hadn’t been for the processes the Walter family undertook to hold it together — not only for John’s benefit but the benefit of the other heirs that received it,” Hund said.

The elder Walter took a full-time job as a mail carrier, and John did the farm work. When his father died 11 years ago, John Walter was already running the bulk of the farming operation. Two years ago, his mother died and the land was divided equally among John and his three nonfarming siblings.

His brother, a mechanic, prefers working with grease, not dirt, he said. One sister is a registered nurse; the other sister works at a Farm Service Agency office.

“I took it on to help keep it going — so all four of us would have something, so each of us would have something to pass on to our own children,” Walter said. “If we walked away, there wouldn’t have been anything.”

Now 54, John Walter has finally moved into the family farmstead where his aging mother spent her last years living off the farm income he helped provide.

Along with his 50-year-old wife, Sally, the couple now rent from his siblings the family land they all inherited — each sibling received 240 acres — along with additional land Walter rents from four other landlords.

“It’s a good feeling to get back down to the home place,” he said.

Walter now grows nearly 1,000 acres of milo, wheat and soybeans along with 600 acres of pasture for the 150 head of Hereford cows he bought from his late mother’s herd.

He credits Kansas State University, most especially Hund himself, for being able to save the family farm and eventually help them make the transition to the next generation.

The issue is not confined to Kansas.

Kansas State University ag economist Rodney Jones, who has putting together a series of workshops on the topic of succession, said the issue has been generating interest among his colleagues across the country.

His last workshop on the topic last month in Wichita drew 25 farm families.

“They are forward-thinking, progressive farm families that are really excited about moving forward and transitioning to the next generation,” Jones said.

Recent changes in tax laws which lowered capital gains taxes and exempted more income from inheritance taxes have also helped ease concerns about passing on the farm.

Situations like the Walter family in which the transition takes several years are commonplace in farming situations, Hund said.

“It is not like a farmer can retire after 20 or 30 years of work at a factory and draw his pension, and that is the big difference,” he said.