First in a series: A local farmer opens up about what it’s like to run a thriving family cash-crop operation, the future of agriculture and the need for a robust succession plan.

Norm Bilyea wasn’t sure what the future would yield when he assumed ownership of his family farm in 1984. But he’s thankful he had the courage to see where it would lead. Today, he runs a multi-million dollar cash-crop operation in rural Southwestern Ontario. He and his family have expanded their business to a burgeoning 1400-acre enterprise. Now more than ever, Bilyea says the value of sound financial advice will keep the farm on solid ground.

Emerging farm trends

The farming landscape in Canada is evolving — and farmers along with it. Agriculture census data reveals that 3 major trends have continued over the past 5 years: there are fewer farms, farmers are getting older and farms are growing much larger.

Nearly half (48.2%) of farm operators were aged 55 or older in 2011.1 That trend predicts 3 out of every 4 farms will change hands in the next 10 years when the majority of Canada’s aging producers, processers and other family business owners retire.2

And for many farmers like 52-year-old Bilyea, they’ll be looking to their financial advisor to help them preserve all they’ve produced and guide them toward a succession plan that keeps the farm in the family. “I’m not ready to quit yet, but I have to start thinking about it,” Bilyea says. He wants to be able to feel confident when it’s time to hand over the reins. “We have no intention of selling — we want to pass what we have along to the next generation.”

Sowing the seeds for success

With that in mind, Bilyea did something unexpected. Instead of slowing down, he invested in some innovative equipment that could help generate an alternate source of farming income. He purchased a grain elevator and operates it on his farm to store beans for a global agri-food supplier and retailer. That purchase opened the door to the commercial side of his agricultural operation and ultimately, will allow Bilyea’s son to provide a sustainable and competitive service in the agricultural industry.

It starts with a conversation

It’s all part of a greater financial plan — one that looks to the promise of family to carry on the legacy of an admirable tradition. As the seasons change, one thing is constant — a need to stimulate growth, and protect what clients have worked so hard to achieve.

Now, as farmers like Norm Bilyea ponder the future, they welcome the support and guidance that comes from an informed and trusted financial advisor. And they’re willing to have these honest conversations openly with family members.

“We’re different from our parents,” Bilyea asserts. “We’re not isolated from our children. We want to include them in our plans and be as open as possible. And that starts with our generation,” Bilyea explains. The idea is to start financial conversations sooner about intergenerational wealth transfer, succession planning and the implications of estate asset management.

Did you know?

The number of million-dollar farms is on the rise. Canada now has 5,902 farms with $1 million or more in gross farm receipts, and of all million-dollar farms, 62.5% were family corporations.3

Now’s a good time to start meaningful conversations about farm succession; topics can include:

  • how life insurance can be used to equalize the inheritance for children who don’t want to be actively involved in the family farm business after their parents’ death;
  • segregated fund products that allow direct beneficiary designations so the death benefit can bypass the estate and avoid probate (some segregated fund products have a 100% death benefit guarantee that protects against market declines); or
  • term or permanent insurance to fund buy-sell agreements to pay for the purchase of a farm corporation after a shareholder dies.

Retiring the family farm takes years of planning and can be a major life event that triggers a variety of concerns. It requires lawyers, accountants and informed advisors to make it happen. Are you ready to help them cultivate a financial plan that helps keep the farm in the family?

Across its insurance and wealth business, Sun Life Financial’s Advanced Planning services deliver professional expertise and insights through a team of chartered accountants and lawyers. If you want to learn more, please talk with a Sun Life Sales Director.

Look for our next article in this series in the coming months. We’ll profile an advisor who serves farmers and a sales director who can provide insight into products and strategies that build resilient relationships with clients in the agricultural industry. Stay tuned!

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1 Statistics Canada, Census of Agriculture, 2013.

2 BDO Canada LLP/Tax-Bulletins/Succession-Planning-for-the-Transition-of-the-Family-Farm.

3 Statistics Canada, The Financial Picture of Farming in Canada, 2014.