By Trevor Bacque
For Garnet Martin, his rural life is best summed up with three words: family, farming and finances, with family being the unshakable principle. The Watrous, Sask. farmer along with his wife, Darlene, adhere to those words daily, especially as they have been in the throes of succession planning with son, Derek, daughter, Lesley Kelly, and son-in-law, Mathieu Kelly, since 2010. The trio of values is interconnected and valuable in unique ways. The conviction is that without one of three core beliefs, the other two aren’t as strong. It’s simple and complicated all at once.
Above: Left to Right; Derek Martin, Lesley Kelly, Garnet Martin, Mathieu Kelly – Photos courtesy of Lesley Kelly.
The 6,000-acre operation, Evergreen Woodcreek Farms, produces canola, canary seed, lentils, milling oats and wheat. The family has also become recently involved with certified seed production. For many Prairie farmers, huge tracts of land mean they are operating multimillion-dollar businesses. What may come as a surprise is how few have succession plans in place or have even had a conversation about who will be the next on-farm generation, if anyone.
Above: Garnet Martin with his grandchildren Jennings and Copeland – Photos courtesy of Lesley Kelly.
Statistics Canada’s 2016 Census of Agriculture, a study published every five years, noted that the number of farm succession plans are very low versus the number of Canadian farms. Across Canada, only 8.4 per cent of farms have written succession plans. A typical grain and oilseed farm is above the national average, but not by much, at 10.4 per cent. Dairy is the highest at 18.4 per cent while sheep and goat farms were on the other end at 4.3 per cent. Certain succession planning coaches suggest the numbers are higher, however plans may remain somewhat ad hoc or in some cases are simply a verbal agreement. As more farms shift to different business models, the operations still remain as family enterprises, whether through a sole proprietorship, partnership or as a corporation. “Farms do continue to be family businesses,” says Ellen Bekkering, analyst with StatsCan. “The operation may be changing, but they are family businesses.”
Above: Darlene with grand daughter Danyka – Photos courtesy of Lesley Kelly.
The genesis of the family farm was 108 years ago in 1910 with Garnet’s grandfather, Robert Martin Sr., a Scottish immigrant. He broke 60 acres of wild Prairie with oxen just west of where the current-day farm sits near Watrous. Garnet’s father, Robert Martin Jr., began to farm following service as an Air Force mechanic during the Second World War. As Garnet grew up in the ’60s and ’70s, he loved farm life and all that came with it. When he graduated high school in 1975, he went straight into a farming partnership with his father and second cousin, Vernon Christianson.
“The deal was basically Vernon and I each got 25 per cent and dad got 50 per cent,” says 60-year-old Garnet. The young man was happy to be behind the wheel of his dad’s machinery and peel back another layer of what it meant to be a farmer. For seven years, the three of them farmed 1,500 acres, half of which were left as summer fallow, and life was good.
“In that era, farming was beginning to boom,” he says. “We basically grew wheat and barley. Wheat prices were on the rise. Young farmers were beginning farming again, and a few [people] a bit older that had gone to school or work, had come back to the farm. The farming industry was on the upswing.”
In 1980, they diversified their income by renovating a run-down hog barn to accommodate a herd of feeder cattle. They continued this way for nearly another two years before grain prices started to tumble. Cousin Vernon grew weary and in 1982 he ventured out on his own while Garnet doubled down at home by expanding the farm’s land base another 900 acres. By this time, the farm was operating under a system of two-thirds crop and one-third summer fallow.
“In that time period … it was more of an agreement,” says Garnet, whose father had just sold out of a machinery company and was beginning to semi-retire. “I paid him a set value, which worked out roughly to what land was renting. I started buying land from him, not going through the bank, just paying him a certain amount of dollars. It was around $80,000 a quarter [section] and I would pay him X amount for so many years.”
The succession planning between Garnet and his father was tense at times, and much of it was predicated on the son’s youth and ideological approach to farming.
“When I first started farming, I wanted to own the land myself. I was all ramped up. You need to have that as a young person, but you also need to realize it takes time,” he says. “Dad discouraged me from that. He always said, ‘the land is going to be yours,’ but I wanted to own it, pay for it, take leadership of it. I ended up making a deal with dad and thank God I did. Because I wouldn’t be farming today if I borrowed that money.
“The interest rates would have sunk me. I struggled even without having the interest rates. I don’t remember not paying dad, buy I remember having the flexibility of not paying him. He ended up being my banker, and a generous banker. In a tough time, that’s a key point.”
One gigantic conversation that will be narrowly avoided due to farmer blowback was the potential of the Trudeau government’s changes to tax laws, which would have greatly affected many farm businesses and inter-generational land transfers. Much to the relief of the Martin-Kelly clan and others, those ideas have been walked back. However, such policies underscore the need for farmers to have clear directions and understandings of what they have today and where they want to be tomorrow.
Above: Mathieu Kelly with sons Copeland and Jennings – Photos courtesy of Lesley Kelly.
For the incoming fourth generation, the sacrifice and hard work of Garnet and Darlene only makes them want to repay both the patriarch and matriarch to help secure the farm’s future, not create tension.
“He is like the coach of a team; he weathers the storm,” says Mathieu, 40. “He sheltered us, and now it’s maybe time for us to shelter him and start to move that forward. It would be nice to have him be able to start to focus on retirement and have us step up and make some more decisions.”
For Garnet, he’s been making decisions his entire adult life. After his cousin’s departure and the acquisition of additional acres, Garnet realized the equipment needed to be upgraded. He expanded the machinery line that same year to make farming 2,400 acres more economical. However, the shiny equipment was the only bright spot for more than a decade at the farm.
“From ’82 onwards into the ’90s, almost no machinery was bought. It was starting to get worn out,” he says. “We didn’t expand the farm; it was flatlined. I knew something had to change.”
He tried his hand at everything – from studying grain marketing to rescuing the old wooden Watrous elevator from certain destruction and even dabbling in value-added with Lesley making Martin Munchies snack foods with the farm’s barley – and never waited for life to come to him.
By the time 2010 hit, the fourth generation had earned their stripes in a variety of ways off the farm, and slowly but surely the idea of life in Watrous continued to tantalize the kids. Mat had explored life on other farms and the black gold rush of Alberta’s oilsands. Lesley has spent the bulk of her career in marketing and still works hard to promote the farm through her blog High Heels and Canola Fields and co-hosts an agricultural podcast. Derek became a father, moved to Manitoba to work for an outfitter, tried his hand at farm life with another Saskatchewan family and spent time in agri-retail. The return to the family farm has proven to be just as big a test of character and resolve as the succession planning itself.
“When we came back to the farm, we knew there were going to be challenges because it was a family unit,” says Lesley, 35. “We were bringing in a son-in-law … that was tricky. What we did was sit down as a family unit. We talked about what our goals were as a farming unit; where we wanted the farm to go. We homed in on our mission and visions and our values and our culture. If we didn’t get that right, we knew we wouldn’t be successful.”
With Garnet as the farm’s figurehead, honest conversations have helped everyone as difficult topics have come up in discussion. “Now we are in this time where the boys are taking on more responsibility, and they want to make those final decisions,” says Lesley. “Sometimes there is confusion about ‘do I run this by Garnet?’ That’s the transfer of management taking place.
“We’ve always been a family that is very open. There’s times when he says ‘no, this is what we’re doing’ and that’s OK. If you give context, it’s easier to get alliance.”
Derek concurs with his sister and says the variety of voices and interests mean that tensions are inevitable. “We have three partners which brings in three different families, kids, wives, all that,” he says. “I’m not going paint a picture and say it’s all pretty; we’ve got our differences, we’ve had our fights, but it’s how we overcome it.”
Through it all, the family maintained open communication, even when it was difficult, and one of the other core values – finance – was invoked, and the joint partnership with each family receiving one-third of all farm income was formally established.
“The biggest thing that I see is that it’s simple, it’s one-third, one-third, one-third. Everybody wins, everybody loses,” says Derek, 33. “If we win, we share our winnings; if we lose, we share our losses. It’s not I, it’s not me, it’s we. When someone makes a mistake, we identify it, and we learn from it. That’s what’s made us so strong.”
There is an agreement at Evergreen Woodcreek Farms that if anything should happen and any of the three family units can no longer farm, their interest will be bought out and they will be taken care of appropriately. “In the farm plan, you always need an exit strategy,” says Garnet, who considers succession planning his exit strategy from farming.
A big way they overcame their differences, ensuring their best chance of success, was to hire an outside consultant. That person walked through scenarios and coached them through the process, offering tips and helping to avoid common succession planning pitfalls. The family even went so far as to take a personality test, the famed Myers-Briggs, which assigns four letters to create a personality archetype. While Mathieu cannot recall his assessment, he’s the first to say, “I’m a feeler. I’m an emotional guy is what I am.” Such emotions are common during succession planning – good and bad – and help families determine what direction the farm will take and how goals will be achieved.
The sessions were difficult, and Lesley had no idea how it would affect her and others on the inside.
“I wish I knew how heavy a process it was on my parents both emotionally and mentally,” she says. “Their whole world is going to be different in a few years. The pressure my dad has … he feels he has to figure it all out. I wish I would have shown that we will figure it out together [at the time].”
With three families officially farming together, everyone knew that a limited number of acres wouldn’t be financially viable. Mathieu and Derek took charge in the first year of their partnership and rented an extra 1,000 acres and upgraded machinery to reflect the scale of work that needed to be done, just as Garnet had in the early ’80s. However, nothing could prepare them for 25 inches of rain.
“It only gave us experience,” says Derek. “I won’t say it’s stupid, but I’ll say I’m proud we did it and that we learned that money doesn’t grow on trees and that we need to pay for that machinery.”
That year emphasized the need for trust and open communication to Garnet yet again. “I need to learn that they need to make mistakes,” he says. “It’s tough for me to watch. It’s not me beating them up; it’s them being young. They were focused on what they were combining today; I was thinking about what do we do if it rains, and thinking three, four, five or 10 days out.”
Garnet says despite 2010 being one of the worst years farming, it was their absolute best in terms of communication. “You would have thought that those were the times we didn’t get along, but it wasn’t. This year, we’ve had our best financial year, yet we had our most difficult time working together. I’m trying to figure out why that was. Every year presents a different challenge.”
Now entering its eighth year, the partnership is still fluid and ever-changing, and likely will always be that way. As Garnet and Darlene slowly lessen their in-farm involvement, the same discussions from eight years ago will crop up, but from different perspectives.
“Things change and you may have great intentions about a five- or 10-year plan, but be patient. There’s ups and downs,” says Mathieu.
Lesley echoes her husband’s sentiments. “We do need help. We need someone to come in and have a look at what our roles and responsibilities were a few years ago,” she says. “In six to 12 months, I would really like to identify, when my dad transitions out, how the farm will be set up; the roles and responsibilities; what you need to do is be really, really clear and how we can help each other.
“Succession planning isn’t something you do in a year and you put the plan away. It evolves, changes directions and sometimes you feel like you went a different way,” says Lesley. “It’s evolving on a day-to-day basis and it never ends. You have people’s feelings and lives at stake and you want to ensure everyone’s heard. That’s hard. Is it perfect? No, but the work we’ve done over the last five years has helped set us up for success.”