Families who have inherited land but don’t know anything about farming find it safer to put the professionals in charge
CAMROSE, Alta. — Brenda Sharp knows she knows nothing about farming.
But the Texas resident knows she wants to keep the land she inherited in Saskatchewan, Nebraska and Kansas, as a way of staying connected to her family.
For about 50 years, Sharp and her family have used farm management companies to manage the farms they inherited.
“There is no way you can manage the farmland from Texas. I’d have to go back to school to learn about farming. It is nice to know you have people you can rely on,” said Sharp.
Sharp’s family connection with farm management companies began when her great-grandmother died. The land along the Nebraska and Kansas border was inherited by Sharp’s grandmother, but questionable financial practices by the tenant sent the family to Farmers National Company, an American farm management company.
“My grandparents decided to go with Farmers National so everything they did was accounted for. They knew where all the money was going, what they were planting, versus having an individual tell you what they would do,” said Sharp.
Eventually, the land was passed down to Sharp and her two sisters and an uncle. The land has since been divided between the two families. The sisters own about 1,200 acres in Nebraska and Kansas, where Sharp was born. Four years ago the sisters inherited about 700 acres near Moose Jaw, Sask. They use the Canadian land management company FNC Serecon to manage the Canadian land.
Sharp said they have never seriously thought about selling the land. Instead, they want to maintain a connection to their family through the land. Sharp was born in Kansas and each summer and Christmas the family travelled back from their new home in Texas.
For families who don’t need the cash to pay off a loan, there is a strong desire to keep the land in the family. Some have a strong family connection, while others think of it as a way to diversify their investment portfolio, said Jim Robinson, general manager of FNC Serecon.
Many landowners who use his services can remember visiting their grandparents on the family farm and years later still have a strong connection to the farm and its memories. But memories can’t run a farm.
“A lot of those people don’t know that much about farming. They live far away and it is hard for them to manage a relationship with a tenant and they don’t have a good notion of what is going on with their land,” said Robinson of Edmonton.
“We want to make sure we are finding the right renters for our clients. We’re negotiating fair market rent for them and collecting that and we’re managing all aspects of the relationship with the tenant. We’re communicating with them about their cropping plans, about their rotations, about all the agronomics involved in growing crops on our client’s land,” he said.
“We’re also on the ground inspecting the crop in the growing season and producing reports to the landowners of what is going on with their land. Was it a good year, a poor year, why.”
The 2016 census showed about 45 percent of the 130 million acres of farmland in Western Canada is rented. Recently retired farmers don’t often need someone to manage the land, but their kids who may live in the city may want the farm professionally managed if the land is turned over to them.
Sharp said they have a good relationship with the long-term tenants and with their Farmers National farm manager. When their long-term manager retired, they met with the new manager to discuss their goal for the American land.
“We toured all the farms and the manager asked us what we wanted to achieve. Of course, we want the farms to pay for themselves. We are pretty easy clients. We do stay involved but we’re not about to tell him his job. He tells us what the farmers think, how the land is doing and if we need to rotate a crop,” she said.
Recently, the farm manager suggested some of the farmland should be terraced. The manager will give the sisters a detailed report on the project, check to see if government programs are available to help pay for the cost and the estimated total cost of the project.
“He doesn’t do anything without our OK. As far as crops go, the farmers and him decide that, but when it comes to terracing, or new water, he tries to look ahead and warn us that this is coming up,” she said.
Any money from annual rent goes into a dedicated farm account. Any money needed for taxes or extra costs comes out of the same account.
For many of Robinson’s clients, the landowners are the children and grandchildren of the original owners. Some may have recently inherited the land and don’t know where to start, don’t know the neighbours, or yet have a level of trust with potential renters.
“The (absentee) owners are everywhere, but mostly in the big cities. They are a generation or two removed from the farm. If they’re only one generation, they probably know a little bit about farming, if they’re two generations they may know nothing at all. Those are the people who have left the farm and never came back. When their mom and dad retired they ended up owning the land,” he said.
“In the same way a GIC (guaranteed investment certificate) or an RSP (retirement savings plan) is in your investment portfolio, most people have a professional that helps them look after those kinds of investments. That is the kind of role we fill with farmland. We manage that asset for them,” said Robinson, whose company manages about 20,000 acres in Saskatchewan and Alberta.
Sharp said they need the services of a land management company such as Serecon, especially when the sisters can’t visit the land in Canada because of border restrictions due to Covid-19.
“That was a blessing because we didn’t really know what to do. When you rely on somebody and inherit something like that and know nothing, it is kind of scary. There are a lot of people out there who know you don’t know anything and will take advantage of you,” she said.
While Sharp has a strong connection to the farms because of her annual visits, she doesn’t know if her children will feel the same way if they inherit the land.
“My sister and I grew up there. It is going to be different for our children. They won’t have that connection. We just always felt a strong connection and as long as the three of us can keep it we are. My daughter has been to Kansas a couple times when she was younger. I have talked to her about how important it is to keep it.
“When it is time to take over my part of that I told her to ‘just remember it is your legacy and it is something you need to take care of and not take it for granted someone will do it for you.’ There may come a time when it might get sold, but I hope not.”