PLAN FOR NEXT GENERATION IMPORTANT ON FARMS

Nash Huber, center with suspenders, is planning to incorporate his farm into a limited liability company in order to sell controlling shares to his farm managers, creating an employee-owned Dungeness Organic Produce.
Photo courtesy of Dungeness Organic Produce

Nash Huber sets example through incorporation

By Evan McLean
Staff writer

Nash Huber is removing any mystery as to the future of his farm.

Huber owns and operates Dungeness Organic Produce, one of the larger farms in the Sequim-Dungeness Valley.

Although details aren’t ironed out, Huber, 66, plans to incorporate his farm into a limited liability company and sell a majority of the shares to his farm managers.

“The future of many of America’s family farms rides on good planning for operations under the next generation,” farm manager Kia Kozun said. “Nash and his partners are trying to make sure that the process of transition is organized and that the farm will continue to operate effectively even in a transition period.”

Curtis Beus, Clallam County Extension director, said changing times challenge family farms to smoothly transition from one generation to the next. Corporate farms, family or not, have a business plan and an established hierarchy, much like family farms of the past.

“In another era in time farms went from the father to the eldest son; there was a cultural mechanism in place that kept the farms working,” Beus said. “I’m not saying it was the right way to do things, but it has put strains on family farming operations when they split everything into six if there were six kids.”

Beus said if one of the children desires to keep the farm running, he or she generally must buy out the other siblings, often creating too much debt for a viable farming operation, especially in Clallam County.

“What’s going on in this county is land values are far beyond what (agriculture) can pay for,” Beus said. “Frankly, most of the farms are leased, which is tell tale that they are usually in a holding pattern for development.”

Beus said creating a plan for farm operations into the next generation can hit challenges but is a modern way to deal with the modern conception of land value.

The process is a bit like estate planning. A farmer hires a financial or legal advisor to draw out how and when assets will be transferred to a designated person or group.

There are as many different ways to plan as there are farms. Generally, succession planners take stock of the farm’s financial state, consider directives of the owner and create a plan for farm management and ownership during and after retirement.

“I’ve seen plans work out great, especially when there is a phasing element so that everything doesn’t happen at once,” Beus said.

In Huber’s case, he will likely retain some control and ownership while transferring a majority of the ownership to a handful of young, dedicated managers. The transfer is not on the immediate horizon but the first steps have been taken.

“A lot of older farmers are having problems finding people to follow up and continue their operations, family or not,” Kozun said. “In our hiring operations we are pressed to find hard-working people that care about the progression of the farm as much as their employment.”

Kozun said they are lucky to have the dedicated crew that they have today. She attributes some of that employment success to the reputation that Huber has built for himself and his farm.

Huber was at the front lines of organic farming more than 30 years ago, the fourth person to be certified in Washington. He is continuing that innovative mentality in planning for his farm’s future with a transition plan.

The farm, which employs about 30 people from May to December, grows 45 vegetable varieties for the wholesale market and about 30 more sold through the farm store at 1865 E. Anderson Road, north of Sequim.

Resources for farm planning include:
• American Farmland Trust at www.farmland.org
• Cascade Harvest Coalition at www.cascadeharvest.org
• Farm Foundation at www.farmfoundation.org
• WSU planning basics available at http://farm-mgmt.wsu.edu/PDF-docs/misc/eb1231.pdf