Preserving the family farm
Imagine the following scenario.
Grandma and Grandpa own a 100-acre farm. In addition to productive fields, pastures, or forestland, there’s the homestead, old oak tree and countless memories of picking sweet corn and playing in the crick.
But let’s suppose that, when Grandma and Grandpa pass, the land gets divided into pieces among three children who have moved to far off cities.
If the same process happens in future generations, then the farm gets subdivided into smaller and smaller chunks. Likely, some of those chunks will be landlocked (i.e. no road frontage), or consist of land that is not productive. Each piece potentially becomes less valuable, less productive and less marketable.
And yet, the family still feels a strong tie to the land and its heritage and laments the fact that a once productive farm has become idle.
Now imagine an alternative scenario. What if the family decides they would like to maintain the property as an intact, productive farm? Instead of subdividing the property, they set up a formal agreement that gives each family member a share of the operation.
The agreement could specify procedures for making decisions about managing the farm and how income would be shared. It could also grant access to the shareholders for specific activities, such as hunting, fishing, hiking and camping and set procedures to avoid conflicts.
Since there may be some families who don’t always agree on the best course of action (not yours, of course), the arrangement could specify voting procedures for making management and access decisions (e.g. an annual family meeting at a specified time). The availability of free internet video conferencing makes it easy for faraway family members to participate.
I should make it clear that such an enterprise is unlikely to transform your family into a Rockefeller-style dynasty, nor even one of the web-footed fowl variety.
But let’s examine some possibilities. Perhaps the old homestead could be renovated into a rental unit or a vacation cabin for family use. Cropland could be rented to a local farmer. Forested acres can be managed for recreational opportunities and timber production, or leased to a hunting club.
Many years ago a one hundred-acre farm could easily support a large family, but that’s a tall order with today’s cost of living. A more reasonable expectation might be a yearly “dividend” of a few hundred dollars for each shareholder after the taxes and other expenses are paid.
That may not sound like much, but I personally don’t mind receiving the occasional check for a few hundred dollars.
That may also sound insignificant compared to a cash-sale of the farm. That is a fair comparison, but it has to be weighed against owning an asset that could potentially increase in value and generate income over many years. Not to mention the immeasurable wealth of preserving family heritage and generating new memories of “life on the farm”.
Obviously such decisions should be made carefully, and with appropriate advice from your lawyer and accountant. Also consider that the threat to farmland affects us all, not just those who own it. Last I heard they weren’t making any new land. If we want our children and grandchildren to have enough to eat, we’d be wise to preserve what’s been given to us.