8 ms·

Most of my family are farmers. It's crazy hard work, requiring a massive amount of effort and know-how. Most of my farming relatives are better educated than me

by beAbU 4y ago

Most of my family are farmers. It's crazy hard work, requiring a massive amount of effort and know-how. Most of my farming relatives are better educated than me from a pure academic perspective. Making a success of a commercial farm requires deep knowledge of the crop, the land, the weather and the local pests. Gone are the days of doing things the way your forefathers did things. Moreso if you actually want to be competitive in the market that you are producing for. Please dont make the romantic mistake of thinking you will become this farmer and it's all sunshine and success. One bad crop (which could be because of no fault of your own) can mean financial ruin. My advice: rub shoulders with the locals in the area. Maybe theres a farmer interested in renting your land and trees. Alternatively, appoint an expert to manage and run the farm for you. Theres a certain romanticism associated whith owning land you inherited. But you have to be honest with yourself and look at the numbers. If it's not your expertise and the financials don't make sense you'll probably be better off selling the land. My dad and I had exactly this conversation recently. He has some land that he got from his father, that he's renting out to the farming relatives. My dad's at the age now where he needs to plan for what happens to his estate. We looked at the numbers and relaized me and my brother will be better off selling and taking the money. In my country you are liable to pay hefty taxes on inheritance. Neither of us have the reserves to pay those taxes on a piece of land we have no idea how to run or manage. You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset.

tsingy 4y ago
I will hire people for sure. I can manage numbers and people, not a farm. Seems like France laws about inheritance.
voisin 4y ago
> You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset. It is worth speaking with an estate lawyer or accountant. There are strategies to avoid this that differ based on country, but insurance usually plays a role. It is, in my opinion, unfair that someone would be forced by taxes to sell the birthright that their parent spent a lifetime working for. Good luck.
- throw827474737 4y ago
  And to others birthright and fairness in one sentence looks really strange ;)
  - Waterluvian 4y ago
    “Birthright” is this concept that can easily be accepted without question as cosmically inherent. But when you examine it, it doesn’t really make any sense at all. It’s a great way to perpetuate inequality, especially wholly unearned inequality.
    - zo1 4y ago
      One could argue that it's "cosmically inherent" that something you earn through your own labor (of the body that you control/own?) should be yours do with as you please, so long as it doesn't hurt others. If you can't accept that fundamental property, we are quite frankly serfs, which is a few steps away from slaves. Slaves not only didn't own their own body, but they also didn't own the fruits of their labor.
      - awinder 4y ago
        You can balance the real dual-interests at play here through progressive taxation, allowing for transfers of wealth that only marginally accelerate society-wide wealth disparity. The slaves/serfs lingo is a little stretched when it applies necessarily to other people, and those other people have had their entire lives to benefit from the wealth of the other person anyways.
      - nkrisc 4y ago
        > One could argue that it's "cosmically inherent" that something you earn through your own labor (of the body that you control/own?) should be yours do with as you please, so long as it doesn't hurt others. Why is it only “cosmically inherent” as long as you don’t hurt others? Has the tiger no cosmically inherent right to his meal? The truth is he doesn’t, he must defend his kill if necessary. The truth is you must defend what you’ve earned as well, either by force or through mutual agreement (society). We, as a society, have agreed to grant each other exclusive rights to what we’ve earned. Of course that hasn’t always been the case throughout history. Don’t bring the cosmos into it, it happens through mutual consent, because we choose to. Your rights are man-made, don’t take them for granted. They only exist so long as everyone agrees they do.
mccorrinall 4y ago
> One bad crop (which could be because of no fault of your own) can mean financial ruin. You can hedge crop in many ways. Give Terry Duffy a call.
- vehementi 4y ago
  There is also insurance, and other income stabilization options
quickthrowman 4y ago
> In my country you are liable to pay hefty taxes on inheritance. Neither of us have the reserves to pay those taxes on a piece of land we have no idea how to run or manage. 1. Borrow against the land to pay the inheritance taxes. 2. Rent the land to a farmer, use the cashflow to pay off the inheritance tax loan until it’s paid off. 3. Keep renting the land to receive cash income. If the cashflow from renting the land is not enough to pay off the tax loan, sell the land.
- texasbigdata 4y ago
  Naive.
  - CrazyStat 4y ago
    This is not a helpful contribution to the discussion.
  - ticviking 4y ago
    Hopeful, and for someone who wants to commit to preserve that inheritance not the most insane approach I've heard. Are you aware of better strategies to do that?
kqr 4y ago
> Making a success of a commercial farm requires deep knowledge of the crop, the land, the weather and the local pests. ...plus logistics, storage, insurance, finances, repair, markets, etc, etc. I would be interested in working with a farmer through some time of my life just to learn such a wide variety of tasks!
- javajosh 4y ago
  You make it sound like farming is just as hard as a regular job, plus a great deal of manual labor, plus the constant risk of total crop failure because of weather etc.
  - ticviking 4y ago
    Those forces are a non-trivial part of what is driving the consolidation of land-ownership to commercial mega-farms.
etempleton 4y ago
This is good advice. Farming yourself will be an uphill battle. You will learn, but it will take some time and it helps if you have someone to guide you because so much of it is experience based. You can probably lease the land to a local farmer to farm it for you. You could maybe even convince them to take you on as a farm hand and teach you how to do it as part of the deal. As said, there is a lot that goes into farming these days and almost everyone specializes in a crop or two. The folks that do it the old fashion ways without adapting are usually going under because their yields are poor / inconsistent. This will likely be you if you go at it alone, so unless you are okay with eating some losses then I would get help.
dbcurtis 4y ago
I will agree with parent comment and add a personal anecdote that perhaps provides some models for you to consider. I am a farm boy. There was one night many decades ago where I said to myself: "You can either wrap your head around DiffEQ, pass the course, and graduate with an engineering degree, or go home and clean hog barns for the rest of your life." I chose option A. While this makes a good story, it is also the literal truth. The point being, I grew up in farming and understand it, but have little desire to manage a farm myself. Same goes for my wife. Eventually with the passage of time, we inherited farm land. Our path has been to rent the land to farmer operators that we have good relationships with, and manage the leasing ourselves. If course, with the advice of an attorney and an accountant that are both local to the area where the farms are and who do a lot of farm-related practice. We feel we understand farming well enough to engage with farmer-operators and negotiate fair rents, get soil-conservation terms in our lease agreements that we desire, negotiate capital improvement projects that are mutually beneficial (some of our farm land had drainage tile installed a few years back, for example.) If you go this path, you will want local legal and accounting advice. You should also understand enough of the "big picture" items like the ebb-and-flow of the pricing of the commodity in question, how that impacts rents, the rent models used with operators for that particular commodity, and any farming practices that you with to enforce, such as soil and water conservation, appropriate use of pesticides and herbicides, who gets the rent from pollinators if that applies, etc. Option 2 is farm management companies. My farm land is in Iowa and Minnesota, so hardly coffee country. It is corn (maize) and soy bean country. There is a corn-belt farm management company called Hertz farm management that is one of the large, reputable farm management companies that many people in our situation use. You might be able to find an equivalent firm. This is a good option if you want something more turn-key, and don't feel that you have sufficient expertise be a landlord-with-a-clue.
- AlbertCory 4y ago
  Your answer and the parent's are both awesome. Thanks to both of you.
- beAbU 4y ago
  Your note about local services is super important. Local lawyers, accountants, banks and suppliers. People who understand the land, the crop, the challenges and all that. In my locality we have hyper local banks that only specialize in loans for local farmers. They understand the market, their clients and the associated risks. 300km in any direction is far enough that the rules are different.
vikR0001 4y ago
> You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset. Do you live in France by any chance?
- georgyo 4y ago
  This is true in the US as well. Though it only affects people with larger inheritances. https://turbotax.intuit.com/tax-tips/estates/what-are-inheritance-taxes/amp/L93IUc3sC https://turbotax.intuit.com/tax-tips/estates/what-are-inheri... Out of scope for this comment, but there are several ways these taxs is avoided.
- beAbU 4y ago
  Nope, South Africa.
redtexture 4y ago
Would placing the land in a trust, or family corporation avoid inheritance tax issues?
- beAbU 4y ago
  I'm not too well versed with all the different legal options, but I don't think I want to go into a trust (i.e. business) with my brother. Somewhere someone will be left holding the bag and that's how you destroy familial relationships. In the end, we are gonna sit with a piece of land, that neither of us know what to do with, that's gonna create more stress than it's worth.

by beAbU 4y ago

tsingy 4y ago

I will hire people for sure. I can manage numbers and people, not a farm. Seems like France laws about inheritance.

voisin 4y ago

> You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset. It is worth speaking with an estate lawyer or accountant. There are strategies to avoid this that differ based on country, but insurance usually plays a role. It is, in my opinion, unfair that someone would be forced by taxes to sell the birthright that their parent spent a lifetime working for. Good luck.

throw827474737 4y ago
And to others birthright and fairness in one sentence looks really strange ;)
- Waterluvian 4y ago
  “Birthright” is this concept that can easily be accepted without question as cosmically inherent. But when you examine it, it doesn’t really make any sense at all. It’s a great way to perpetuate inequality, especially wholly unearned inequality.
  - zo1 4y ago
    One could argue that it's "cosmically inherent" that something you earn through your own labor (of the body that you control/own?) should be yours do with as you please, so long as it doesn't hurt others. If you can't accept that fundamental property, we are quite frankly serfs, which is a few steps away from slaves. Slaves not only didn't own their own body, but they also didn't own the fruits of their labor.
    - awinder 4y ago
      You can balance the real dual-interests at play here through progressive taxation, allowing for transfers of wealth that only marginally accelerate society-wide wealth disparity. The slaves/serfs lingo is a little stretched when it applies necessarily to other people, and those other people have had their entire lives to benefit from the wealth of the other person anyways.
    - nkrisc 4y ago
      > One could argue that it's "cosmically inherent" that something you earn through your own labor (of the body that you control/own?) should be yours do with as you please, so long as it doesn't hurt others. Why is it only “cosmically inherent” as long as you don’t hurt others? Has the tiger no cosmically inherent right to his meal? The truth is he doesn’t, he must defend his kill if necessary. The truth is you must defend what you’ve earned as well, either by force or through mutual agreement (society). We, as a society, have agreed to grant each other exclusive rights to what we’ve earned. Of course that hasn’t always been the case throughout history. Don’t bring the cosmos into it, it happens through mutual consent, because we choose to. Your rights are man-made, don’t take them for granted. They only exist so long as everyone agrees they do.

mccorrinall 4y ago

> One bad crop (which could be because of no fault of your own) can mean financial ruin. You can hedge crop in many ways. Give Terry Duffy a call.

vehementi 4y ago
There is also insurance, and other income stabilization options

quickthrowman 4y ago

> In my country you are liable to pay hefty taxes on inheritance. Neither of us have the reserves to pay those taxes on a piece of land we have no idea how to run or manage. 1. Borrow against the land to pay the inheritance taxes. 2. Rent the land to a farmer, use the cashflow to pay off the inheritance tax loan until it’s paid off. 3. Keep renting the land to receive cash income. If the cashflow from renting the land is not enough to pay off the tax loan, sell the land.

texasbigdata 4y ago
Naive.
- CrazyStat 4y ago
  This is not a helpful contribution to the discussion.
- ticviking 4y ago
  Hopeful, and for someone who wants to commit to preserve that inheritance not the most insane approach I've heard. Are you aware of better strategies to do that?

kqr 4y ago

> Making a success of a commercial farm requires deep knowledge of the crop, the land, the weather and the local pests. ...plus logistics, storage, insurance, finances, repair, markets, etc, etc. I would be interested in working with a farmer through some time of my life just to learn such a wide variety of tasks!

javajosh 4y ago
You make it sound like farming is just as hard as a regular job, plus a great deal of manual labor, plus the constant risk of total crop failure because of weather etc.
- ticviking 4y ago
  Those forces are a non-trivial part of what is driving the consolidation of land-ownership to commercial mega-farms.

etempleton 4y ago

This is good advice. Farming yourself will be an uphill battle. You will learn, but it will take some time and it helps if you have someone to guide you because so much of it is experience based. You can probably lease the land to a local farmer to farm it for you. You could maybe even convince them to take you on as a farm hand and teach you how to do it as part of the deal. As said, there is a lot that goes into farming these days and almost everyone specializes in a crop or two. The folks that do it the old fashion ways without adapting are usually going under because their yields are poor / inconsistent. This will likely be you if you go at it alone, so unless you are okay with eating some losses then I would get help.

dbcurtis 4y ago

I will agree with parent comment and add a personal anecdote that perhaps provides some models for you to consider. I am a farm boy. There was one night many decades ago where I said to myself: "You can either wrap your head around DiffEQ, pass the course, and graduate with an engineering degree, or go home and clean hog barns for the rest of your life." I chose option A. While this makes a good story, it is also the literal truth. The point being, I grew up in farming and understand it, but have little desire to manage a farm myself. Same goes for my wife. Eventually with the passage of time, we inherited farm land. Our path has been to rent the land to farmer operators that we have good relationships with, and manage the leasing ourselves. If course, with the advice of an attorney and an accountant that are both local to the area where the farms are and who do a lot of farm-related practice. We feel we understand farming well enough to engage with farmer-operators and negotiate fair rents, get soil-conservation terms in our lease agreements that we desire, negotiate capital improvement projects that are mutually beneficial (some of our farm land had drainage tile installed a few years back, for example.) If you go this path, you will want local legal and accounting advice. You should also understand enough of the "big picture" items like the ebb-and-flow of the pricing of the commodity in question, how that impacts rents, the rent models used with operators for that particular commodity, and any farming practices that you with to enforce, such as soil and water conservation, appropriate use of pesticides and herbicides, who gets the rent from pollinators if that applies, etc. Option 2 is farm management companies. My farm land is in Iowa and Minnesota, so hardly coffee country. It is corn (maize) and soy bean country. There is a corn-belt farm management company called Hertz farm management that is one of the large, reputable farm management companies that many people in our situation use. You might be able to find an equivalent firm. This is a good option if you want something more turn-key, and don't feel that you have sufficient expertise be a landlord-with-a-clue.

AlbertCory 4y ago
Your answer and the parent's are both awesome. Thanks to both of you.
beAbU 4y ago
Your note about local services is super important. Local lawyers, accountants, banks and suppliers. People who understand the land, the crop, the challenges and all that. In my locality we have hyper local banks that only specialize in loans for local farmers. They understand the market, their clients and the associated risks. 300km in any direction is far enough that the rules are different.

vikR0001 4y ago

> You inherit an asset that you are forced to liquidate in order to afford the inheritance taxes on that asset. Do you live in France by any chance?

georgyo 4y ago
This is true in the US as well. Though it only affects people with larger inheritances. https://turbotax.intuit.com/tax-tips/estates/what-are-inheritance-taxes/amp/L93IUc3sC https://turbotax.intuit.com/tax-tips/estates/what-are-inheri... Out of scope for this comment, but there are several ways these taxs is avoided.
beAbU 4y ago
Nope, South Africa.

redtexture 4y ago

Would placing the land in a trust, or family corporation avoid inheritance tax issues?

beAbU 4y ago
I'm not too well versed with all the different legal options, but I don't think I want to go into a trust (i.e. business) with my brother. Somewhere someone will be left holding the bag and that's how you destroy familial relationships. In the end, we are gonna sit with a piece of land, that neither of us know what to do with, that's gonna create more stress than it's worth.