Winter
2016
Grains
West
34
people afford to get in and, at the same
time, how can their parents afford to get
out? It doesn’t help that land is a highly
emotional issue.
“I tell clients, ‘Forget the land
altogether and focus on the business,’”
said Good. “And when I say that, I can
see the angst going away and the blood
pressure go down. I tell them, ‘Let’s park
the estate planning for now and look at
the business. Is there an opportunity for
this young person to make a living?’”
Which is exactly the question Harvey
Pederson asked himself back in the
late 1970s when his oldest son, Brian,
graduated high school and said he
wanted to farm.
“Dad looked down the road and
wondered how to get someone in, and
give them a sense of ownership when they
had no assets,” said Terry Pederson, the
second of Harvey andMildred Pederson’s
three sons, all born in the early ’60s.
The family farm in Bawlf, AB, wasn’t
huge at the time—roughly 1,000 acres.
Harvey decided to give Brian 10 per
cent of the farm’s income on all the
acres, and bill him for 10 per cent of
the input costs associated with those
acres—seed, fertilizer and fuel. The land
and equipment was shared at no cost.
“The next year, I graduated and
I wanted to farm, too,” said Terry
Pederson. “Dad says to Brian, ‘You have
some dollars in the bank now, so you
move to 20 per cent of the income, but
you also assume 20 per cent of all the
expenses,’ and I got the same deal Brian
did coming in.”
Two years later, the process was
repeated when the youngest Pederson
son, Rick, came home to farm. By the
time he was in his second year, all three
boys had assumed a 20-per-cent share
of the farm’s income along with a 20-per-
cent share of all expenses—including
capital expenses, like equipment—while
their father assumed 40 per cent.
And thus, Pederson HBTR (Harvey,
Brian, Terry, Rick) was formed, a joint-
venture arrangement where all profits
and expenses (capital and operating)
were split 40-20-20-20.
FAMILY TIES:
Hannah Konschuh and Casey O’Grady (pictured here with Konschuh’s
parents, Eldan and Sheila) are part of a new wave of young people that are returning to the
family farm.
