Think transition, not succession
Photos courtesy of the Stamp family
Despite armies of well-meaning accountants, bankers and consultants urging them to do so, many Canadian farm families don’t have a plan in place to transfer ownership between generations.
It could be the word succession that’s getting in the way. This can imply an abrupt change, when the older generation is booted out to pasture and the younger seizes power.
Instead of succession, then, consider the word transition. It suggests a gradual, orderly transfer of ownership and authority.
Transition, rather than succession, is what’s occurring at Stamp Seeds near Enchant, Alta. Through ongoing dialogue parents begin to step back, and the younger generation is stepping up.
“It’s hard to pinpoint exactly when we started,” says Greg Stamp, a member of the farm’s second generation. “For us, it’s not a one or two-year thing. We’ve been talking about this and working on it for 10 or 12 years now.”
Parents emphasize farm organization, family teamwork
Richard and Marian Stamp founded Stamp Seeds in 1978. They grew the business by providing high-quality pedigreed seed to customers across southern Alberta. The Stamps also raised four children who, over the past 10 years, have married and assumed key roles in the operation.
The senior Stamps were only in their mid-40s when the idea of transition got going. Rather than push the conversation into the future, they embraced it, and encouraged their kids to carve out their own roles in the business. Now between 26 and 34 years of age, the younger generation took up the challenge.
“My parents were always strong proponents of getting organized and working together, and how to grow and add to the business,” Greg says.
Every six months or so, the family would gather for a business meeting. This wasn’t transition planning as such. Still, as the family discussed farm operations, new opportunities and individual roles, the Stamp Seeds organizational chart took shape.
From left: Greg, Nathan, Marian, Rick, Matt and Aimee
Greg handles sales, Nathan has responsibility for field operations and Matthew runs seed processing and seed treating. Greg’s wife Sarah, Nathan’s wife Christine and Matthew’s wife Dynae also play active roles.
Richard and Marian’s daughter, Aimee Klatt, farms with her husband Blake and his family near Foremost, Alta.
These transition discussions often take place with the help of advisors who know the family and bring business and tax expertise and the ability to keep the process moving.
“They bring impartiality to the table,” Greg says. “They don’t have baggage, or family politics, and they recognize that fair and equal are not always the same thing. They can help you assess what you’re doing, because they have experience from many other farms.”
The transition journey
What does it mean for the older generation to step back, and what happens when they do? Marian Stamp managed the financial side of the business. After nearly 40 years in this key role, she was looking to ease back.
Family business discussions led to a decision to hire a full-time chief financial officer. The family has also begun to sell assets between the parents and the kids – not overnight, but incrementally. This has allowed the parents to transition into safer asset classes as the younger generation has gained experience and assumed authority.
Today, the Stamp family grows certified seed on 5,500 acres, mostly irrigated, with facilities for seed cleaning and treating. These sizeable farm assets are, arguably, less important to the business than the working relationships between generations and among siblings and spouses.
With a successful seed operation, strong demand from commercial farmers and a generational transition well underway, the Stamp family sees a bright future.
“Agriculture in general is positive right now,” Greg says. “We definitely see an upward trend in our seed retailing and cleaning business. The better our customers do, the better it is for us too. So, we’re pretty optimistic.”
Pace of transition less important than clear direction
The Stamp family has been gradually working its way through a farm transition process over the past decade or more. Merle Good, a well-known family farm succession expert, has worked with the family over these years.
“My role is to facilitate discussion, ask the hard questions, but just as importantly develop a business framework that provides a roadmap to actually implement action,” Good says.
“This has allowed not only the actual transfer of assets, but also opportunities. Without business clarity there are only assumptions.”
Good notes this transition is unique in that Richard and Marian invited their family to be involved very early in the process. With numerous children involved, roles and responsibilities are extremely important and thus early input and patience for evolving responsibilities is vital.
There will no doubt be bumps along the way, but the family is committed to the success of their business and each other.
“I always say to my clients that time provides opportunity,” Good says. “As long as there is a clear direction, rushing in is not a viable strategy in family farm succession.”
From an AgriSuccess article (March 2018) by Kieran Brett.