Released June 29, 2009
AMES, Iowa -- Retirement is something many long for with plans of traveling, more family time or relaxation in mind. But for the majority of Iowa farmers, full retirement is hardly considered.
According to the new publication, “Iowa Farmers Business and Transfer Plans” (PM 2074) by Ethan Epley, Michael Duffy and John Baker of the Beginning Farmer Center at Iowa State University, only 23 percent of Iowa farmers plan on retiring, and 30 percent say they never will. These statistics are part of the findings from the International Farm Transfers Study done in 2000 and 2006. It focused on the transfer of intangible assets and produced results that didn’t surprise Baker.
“I have been working with the international research project and succession plans for well over 20 years, and this only confirmed what I thought,” the publication co-author said. “A lot of farmers have no retirement, estate plan or identified successor for farm business.”
The study is a replication of a previous Farm Succession Survey written by Professor Andrew Errington of the University of Plymouth, England. In 1999, Errington, Baker and Duffy formed a research partnership that allowed Baker and Duffy to conduct Errington’s study in Iowa in 2000. Six years later, in 2006, they replicated it and began to analyze the data and feedback.
According to Baker, for every 10 farmers that want to get into farming, only one is getting out. Additionally, more than 70 percent haven’t identified a successor despite the high interest in the occupation, because for many, farming is more than simply a career. It’s a lifestyle that retirement will completely disrupt.
“Retirement is seen as not only a loss of occupation, but also a loss of a way of life,” the publication states. Beyond the wills, estates and trusts that determine the future of land and physical assets are things like labor, management and decision-making power that also must be handed down. This reality makes the process and idea of retirement more complicated and less appealing to those whose entire lives have been about farming. However, Baker urges farmers to reconsider.
“Farmers need to develop a retirement plan and also be willing to retire,” he said. “We have to think about what this means to rural Iowa and rural communities around the nation.” Instead of liquidation, a plan and identified successor can ensure continued sustainability and a future for young farmers, both of which excite Baker.
“Agriculture is the one field where every morning everyone in the world gets up and wants what we produce. We must recognize the wealth we have in Iowa,” he said. “I am enthusiastic about the future of agriculture, but I think we need to put labor back into farming and capture the value of it. Fewer farms with more acres means that there is no place for young people.” While he doesn’t deny the continuation of large, high-volume, low-margin farms, Baker believes there still needs to be a place for family farms in the future of Iowa agriculture.
“Iowa Farmers Business and Transfer Plans” (PM 2074) is available from the Iowa State University Extension Online Store, https://www.extension.iastate.edu/store/ or (515) 294-5247.
As a part of ISU Extension, the Beginning Farmer Center (BFC) was started in 1994 to ensure this exact thing. Designed to assist in the idea of retirement and farm preservation, it conducts a variety of programs including Farm On, which works to connect young potential farmers with those close to retirement. The BFC also produces a variety of publications, like the survey, as resources for policy makers, educators, private industry or even smaller communities who thrive on maintaining their family-farm identity.
“We simply want to raise awareness,” said Baker, the BFC’s administrator. “We want to help people look at alternatives and think about implications.”
Through the BFC, Iowa is one of 20 states that belong to the International Farm Transition Network, which is also headed by Baker, and works to support young people trying to get into farming. With research like the International Farm Transfer Study and networking around the nation and world, Baker hopes to see continued development in the area of educational research-based materials on estate or retirement planning.
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http://www.extension.iastate.edu/news/2009/jun/442901.htm
Source: John Baker, (515) 727-0656, jrbaker@iastate.edu
Writer: Hannah McCulloh, (515) 294-9915, hmac@iastate.edu
