CHAPTER 2 - BACKGROUND TO THE STUDY

The study of generational relationships and retirement in farming families builds on previous work in four different areas. The first is how men and women enter and retire from farming. Questions such as what increases the likelihood that younger family members will enter farming; how they actually take over the work and management of farming; and how older farmers reduce their involvement in farming have been addressed to some extent by our work and that of previous researchers and theorists.

The second area is attitudes toward retirement and retirement plans. There has been little investigation of how self-employed rural people plan for retirement and information on retirement from urban work seems to have little relevance for farmers.

Personal commitment or stake in family relationships and in farming comprise the third area of interest. Although the high personal investment of farmers in their farms is part of the folklore of rural life, we know very little about how important it is to contemporary farmers to farm with their families, to remain in farming, or to keep their farm in the family.

The final area has to do with how families manage a transition such as retirement from a family business. Some people have argued that retirement is a very stressful process for people in family businesses who manage their own retirement at the same time as they must think about career choices of their children. Retirement and succession planning can provide people with a measure of control over generational transmission of the farm.

2.1 The Process of Entry into and Retirement from Farming

Both business and family concerns influence entry, transfer and retirement from farming. Park (1991) states that even in the most carefully planned circumstances, retirement causes major changes in family and work relationships and must be viewed as one of the real life crises of a farming family. She argues that "it is difficult enough for the men involved when the father hands over the cheque book to his son, transferring control of the farm as a business operation. But for the mother and the incoming daughter-in-law the process may even be more fraught. There are many variables, such as whether the older couple move right off the farm, whether they give up their house to the young couple, or whether they retain their farmhouse but become near neighbours of the young couple. It can be very hard for a woman who started off her married life very frugally to see her daughter-in-law making expensive changes to the family home. The garden that has resulted from the older woman's lifetime of work can be an even more sensitive area" (p 137).

In our previous research on retirement from farming, we have found that the exit or retirement phase of the farm has several stages (Keating & Munro, 1989). For farm men, the first area of reduction in the farm business is in farm labour. This reduction may occur through a shift in heavy physical labour to children or through reduction in labour-intensive aspects of the operation such as livestock. The second area of exit is from farm management. The relinquishment of production decisions is followed by marketing and finally financial management of the business. The third and final exit phase is the transfer of physical assets such as land and equipment.

In our recent research in New Zealand (Keating & Little, 1991), we began to understand women's retirement from farming and how the entry of younger family members may be co-ordinated with the exit of their parents. We have found that women who are fully integrated into the farm business have the same process of retirement as men. However, for those women who are not full partners in work, management or ownership of the farm, their retirement from the farm is determined by how their husbands retire.

The entry of adult children into the farm is also determined by the father's exit behaviours. Full entry into the farm by the younger generation can occur only when the older farmer relinquishes management control. Daughters-in-law enter the business later than their husbands, since women must make a place for themselves in the business, while men are expected to assume the role of farmer (Keating & Little, 1991).

The Generations Alberta study (Keating & Munro, 1991) added to our understanding of how men and women retire from farming and how the younger generation becomes established. Patterns of exit were similar to those in our research on farm men. Both men and women reduce their work first, followed by management and finally ownership. We also found that throughout the lifecycle women have substantially lower levels of involvement in their farms than do men.

We expected to find similar patterns in New Zealand of a lower involvement of women than men. For example, Little (1982) has argued that although today's women are seeking a wider involvement in farm decisions, they may face entrenched family expectations based on role models of previous generations. Lower levels of women's involvement in their farms may continue into the next generation if "a young husband, in spite of appreciating contemporary equality when he was single, assumes in marriage a role model for his wife based on his perceptions of a lifestyle of previous generations" (Little, 1982, p 207).

In our previous research (Keating & Little, 1991), we learnt that choosing a successor was an active process, that most farm couples felt unable to establish all their children in farming and that through overt and covert pressures they were often able to 'reduce the pool' of eligibles. If there were sons in the family, daughters were not considered as successors. While parents saw themselves as being even-handed in providing opportunities for young children to do farm tasks not all children remembered early parts of the succession process in the same way. Women who came from farm backgrounds said that they knew, "from an early age that girls were not eligible to become farmers". Daughters on the other hand were encouraged to stay in farming by marrying farmers.

Also in our previous study we argued that the level of involvement in management is correlated with the level of involvement in ownership. With the exception of financial management, women 5 expectations of involvement in production and marketing management are not high.

With regard to ownership, receiving generation women expect that their ownership stake would peak at about 30% in their late forties which is almost twice as high as the ownership percentage of the retiring generation women. Studying the pattern of transfer of farm ownership and its impact on women is a possible future topic for further research.

Park (1991) suggests that socialisation for women's involvement in farming begins very early. "Descriptions of childhood experiences reveal gender along with age and necessity, as important factors in the distribution of labour. This was particularly apparent in the descriptions of farm childhoods. Women from farm backgrounds recalled that the men were expected to do the outside work of the sheep farm,while the women were expected to see to domestic chores" (p 44).

In summary, we know that farm businesses and those who own and manage them, go through phases of entry, establishment and exit (Bennett & Kohl, 1982; Keating & Little, 1991; Keating & Munro, 1989; Selles, 1988). Although both men and women go through these phases, we do not know how the timing and nature of the phases differs for men and women.

The goal of the entry/exit part of the project was to find out more about how young men and women enter farming and about how older men and women leave farming. Since we interviewed whole families, we were able to track changes in work, ownership and management of all involved members of the family. The following research question concerning the process of entry and exit from farming was investigated:

"What are the changes in amount of work, management and ownership of younger women and men as they enter farming and of older women and men as they leave farming?"

2.2 Attitudes toward Retirement and Retirement Plans

Many people who study retirement argue that retirement is more than just an event which is symbolised by a retirement party, a 'last day of work' or a gold watch. One of the earliest people to consider retirement as a process was Atchley (1988) who said that retirement has two 'pre-event' stages. The first stage is one in which people are vaguely aware that retirement was likely to occur; the second is when they began to think seriously about and plan for retirement. Since Atchley's ideas were based on retirement from jobs that had a defined end point, it is not clear how they apply to farmers who do not have an imposed date of retirement. Nonetheless, farmers' retirement does occur over time so that considering retirement as a process is more relevant than seeing retirement as an event. In their discussion of retirement in Canada, McDonald and Wanner (1990, p4) state that retirement should be studied "as a process (which) has to do with how the retirement role is approached, taken and relinquished by the individual".

One of the concerns about retirement is that unlike earlier roles, leaving work is not something that people look forward to. Some theorists have argued that because retirement is a devalued role, people will not think about or plan for retirement (Rosow, 1974). Others argue that people create their social roles as they move into them and that the meaning a person attaches to retirement reflects the individual's understanding of who she/he is (Marshall, 1979). Marshall says that socialisation is a way of describing how people interact with one another throughout their lives and come to attribute meaning to their interaction. This perspective suggests that there is a considerable amount of intentionality or voluntarism and not a great deal of consensus governing human conduct at any stage of the life cycle. Thus farmers may have varying ways of thinking about and planning for retirement. As well, parents and children may view retirement quite differently because of their different places in the life cycle.

Marshall also says that any shift to a new stage in life has both objective and subjective elements. Objectively any status passage such as moving into retirement can be defined in terms of physical and social time and space. The duration may be long or short and the appropriateness of the timing is given meaning by others. Retirement may be seen as 'too early' by parents and 'too late' by children. Subjectively, people may also be more or less aware that they are actually undergoing a passage. So a person could decide not to accept retirement, not to talk about it, or on the other hand, to seize control of the passage.

Control over passages from one status to another is important to people, especially as they grow older. Control may become an issue whenever older people encounter others who wish to shape their passages. Farm retirement may be one of these passages since children have an interest in how quickly the process of retirement occurs and in the outcome of retirement which will affect the children's farming careers. It may be that those who take control of the passage into retirement through active planning and gradual withdrawal from the business will have better relations with children and less stress than those who do not take such action.

In contrast to their parents who are entering retirement, farm children are being socialised for a new role of farmer. It seems likely that as they seize control of their passage into being principal operators of their farms, there may be some difference about how objective aspects of the passage should occur. For example, children may wish the passage to occur much more quickly than do parents.

2.2.1 How Farmers Define Retirement

Most of our definitions of retirement are based on objective information such as the number of hours or weeks worked in the past year; non-participation in the labour force; a reduction in work responsibilities; receipt of social security benefits or private pensions (McDonald & Wanner, 1990). In our previous research (Keating & Munro, 1991), we have found that for farmers, the exit phase of the business includes movement out of work, management and ownership. Thus we would say that a farmer is retired when he or she is no longer working on the farm, making management decisions or has any legal involvement in the farm. Yet if these strict definitions of retirement were used, few farmers would ever be retired unless forced to by ill health, lack of a farming heir or divisive relationships with their farming children.

Many farmers tend to view retirement as "a negative event, imposed by ill-health, financial misfortune, or intolerable relations with the children to whom the farm had been transferred" (Marotz-Baden, Keating & Munro, 1993). Selles (1988) has argued that semi-retirement in which farmers were still involved in some of the daily farm operations is ideal.

How farmers themselves define retirement is an important issue, since our observations suggest that farmers and their farming children may have quite different ideas about when retirement has occurred. An example from our previous research (Keating & Little, 1991) illustrates potential problems in families when generations have different definitions of retirement. We interviewed an older couple who said that they had been 'retired' for many years. They still helped out at busy times and owned part of the farm but they made none of the management decisions. We then interviewed their son who said that he was still waiting for dad to retire. To the son, dad would not be retired until he was no longer involved in the farm.

One of the questions that we still need to answer is how younger and older generations in the same family business view retirement. We would expect that when entry into a business such as farming is dependent upon exit of parents, children would view parents as retired only when parents are no longer involved. In contrast, for parents for whom farming has been their whole lives and retirement is not seen positively, retirement may be defined as reduced involvement but continued interest in the farm. Findings from the Generations Alberta study (Keating & Munro, 1991) showed that the retiring generation do see retirement in terms of relief of responsibility. Receiving generation women and men emphasise exit from ownership as a major criterion. Receiving generation women had the most inclusive definition of retirement and did not see anyone as retired who still had any involvement in the business.

In general, the rights of the retired person usually include the right to economic support without ho~ing a job, the right to use one's time as one sees fit. The duties of the retired person usually include the duty to assume responsibility for oneself and avoid physical and financial dependence on the family (McDonald & Wanner, 1990). No such list of rights or obligations exists for self-employed people such as farmers. Developing the role of retiree without a clear set of expectations, may be a difficult job for farm families.

Questions about definitions of retirement which were addressed in this study were:

"1. What are the elements of farm men and women's definitions of retirement?


2. Are there differences between women and men, or between retiring and receiving generations in which aspects of the definition of retirement are most important?


3. Do retiring generation farm women and men and receiving generation women and men agree on the important elements of exit from/entry into the business?"

2.2.2 What Influences Farmers' Retirement?

The way in which people understand retirement is likely to influence what they see as the most important reasons for retirement. Hornstein and Wapner (1985) interviewed people one month prior to retirement and 6-8 months after in an attempt to determine how people understand their own retirement. In extensive, open-ended interviews, they found four ways that people understand the retirement transition. Some people saw retirement as a time to wind down and to settle into a quiet and more circumscribed kind of existence. These people associated working with pressure and retirement with rest and enjoyment. Others saw retirement as a time in life when they could live in accordance with their own desires, free of the requirements and demands of others. The future was seen as filled with opportunity. For the third group, life continued on despite retirement. Retirement meant reducing work but not giving it up. Work became not something you had to do but choose to do. The final group saw retirement as an imposed disruption. For them, there is no real substitute for the loss of work. When work was removed they felt unproductive, as if a part of themselves had also been removed.

If farmers have a similar variety of views in how they see retirement, we might expect that different things would influence their retirement. Farmers who see retirement as a transition into a less active old age might look forward to a lighter physical workload. Those for whom retirement is a new beginning might be more interested in pursuing new activities. Those who see life as continuing will likely be interested in establishing their children in farming and perhaps in working along with them. And for those who see retirement as an imposed disruption, they would be likely to have negative attitudes toward retirement and not be able to think of anything they would rather do.

Most of the research on reasons for retirement of rural people have pointed to health as the major impetus (Goudy & Dobson, 1985). Rural workers (83%) more frequently cite poor health as a reason for retirement than urban workers (40%) (Youmans, 1967). Because differences in actual health status between urban and rural workers is small, Youmans suggests health concerns among rural workers may reflect the greater physical demands of agricultural work compared to most urban jobs. "With the normal decline in physical vigour and the consequent inability to perform as well as in the past, the rural male probably is more aware of his physical incapacities than the urban male, and he tends to attribute this incapacity to poor health" (Youmans, 1967, p.10). Goudy and Dobson (1985) urge caution in interpreting reasons people give for retirement. There are probably other important factors such as availability of income and changing attitudes toward retirement.

The following questions about what influences farmers retirement were addressed in this study:

"1. What are the most important reasons for retirement given by men and women in the retiring generation?


2. Do receiving generation men and women know what reasons for retirement are most important to their parents?"

2.2.3 Age of Retirement

Most Canadian workers plan to retire and actually retire 'early', i.e. before age 65. McDonald and Wanner (1990) say that given a choice, people who are attached to their work tend to retire later than those for whom their work is not important. They state that those who retire late are more likely to be self-employed than those who retire early or on time. However, work commitment is not the only reason that self-employed people retire late. Some continue to work because of financial need and most of these people are in small businesses and farming. Individuals who are healthy and attached to their work but need money, continue to work.

Farmers have the oldest average age of any group of workers in Canada . They are known to have high commitment to their work and in recent years, many consider that their incomes are inadequate to support themselves in retirement (Keating, 1991). It seems likely that farmers who enjoy their work or those who are concerned about the adequacy of their retirement income, will be likely to anticipate retiring at an older age than those with lower work commitment and higher income.

In New Zealand considerable changes were made in the 1991 Government Fiscal Budget to the guaranteed retirement income - the 'old age pension'. Amongst the changes was the increase in the age of entitlement progressively from 60 years to 65 years by the year 2001. Also increased was the size of surcharge or abatement levels that now cut in at $4,160 of annual earnings for a single person, which allows $80 per week to be earned over and above superannuation before abatement is triggered. At the time of the study, many farm men and women were unclear about the effects of the new provisions on their retirement plans. For others, the increased age of entitlement required a re-assessment of their actual date of retirement.

There is very little information available concerning age of retirement of men versus women. In general, women retire at a younger age, presumably to match the timing of retirement to that of their husbands (Campione, 1987). If farm men are considered to be the principal operators of their farms, then women's retirement will likely be dependent on that of their husbands.

Questions concerning age of retirement were:

"1. Do farm men and women plan to retire?


2. What is the expected age of retirement from work, management, and ownership?"

2.2.4 Do Farmers Plan for Retirement

Most people do little formal planning for retirement. In Canada, only 5 to 10% of the population approaching retirement participates in retirement preparation programs and this proportion has not increased substantially in the past 20 years. Those who are self-employed are the least like~ of all workers to take part in retirement preparation workshops (McDonald & Wanner, 1990). This finding seems surprising when we consider that farmers must make many decisions in deciding how and when to dispose of their farm, reduce their work load and plan where to live in retirement.

In a study of retirement planning of self-employed rural couples, Keating and Marshall (1980) found that people do financial planning, planning concerning where they are likely to live in retirement and how they will use their leisure time. Men and women were likely to begin thinking about financial planning for retirement in their late forties and for time use in their early fifties. However, they often did not share their ideas or undertake joint planning until their mid fifties.

In the Generations Alberta study (Keating & Munro, 1991), found that most farm families had discussed their goals for the future of the business with their spouse and farming child. Fewer had done personal financial planning for retirement or had used professional resources or consultants in their planning. Spouses of farming children were often not involved in these discussions.

One of the questions we addressed in this study was what kind of planning farmers had done for their retirement. Since retirement involves several family members, we were interested in how much farmers talked to their children and to their spouse about their goals for the farm. As well, we were interested in whether farmers had done any financial planning for retirement such as estimating their net worth or their retirement expenses. We also were interested in whether self-employed people used professional consultants such as financial planners in lieu of attending formal retirement planning programs.

2.3 Farm and Family Stake

With the development of studies on farm families, more and more research attention has been addressed to generational relationships in farm families (Rosenblatt & Anderson, 1981; Weigel et al., 1987). Issues around role and status, power and control, and decision making in these families have been the foci of many studies (Hutson, 1987; Rosenblatt & Anderson, 1981; Salamon and Davis-Brown, 1986).

Overall satisfaction among family members who farm together may be affected by many things. One issue that is central is the level of commitment or investment of each member in working together in the farm business In this study, we investigated the 'stake' of each generation in the family and farm using Bengtson and Kuypers' (1971) developmental stake theory. In their survey of intergenerational difference Bengtson and Kuypers (1971) found that young adults tended to maximise philosophical and ideological differences between generations while the parent generation tended to minimise such differences. To account for these opposing views of different generations in the same family, the authors introduced the concept of the developmental stake.

Developmental stakes are personal investments in intergenerational relationships (Bengtson & Cutler, 1976) which differ depending upon whether a person is part of the 'child' or 'parent' generation (Knipseheer & Bevers, 1985; Thompson et al., 1985). The basic concept in developmental stake theory is that over the life cycle, relationships between parents and children are asymmetrical because one member is more dependent on the relationship than the other. In the case of older parents and their adult children, the emotional involvement of both is substantial but involvement or stake in the relationship is greater for the parents (Knipscheer & Bevers, 1985). This results in parents being relatively more concerned with maintaining good relations with the children than vice versa. According to the theory, parents will avoid straining the relationship as much as possible in order to avoid jeopardising its quality.

However, in two-generation farm families the scenario may be quite different. At the beginning of the transfer process, the parents maintain control over the work, management, and ownership of the farm (Keating & Little, 1991) and adult children who wish to take over the operation are dependent upon the goodwill of parents to transfer the operation to them. Children may worry about serving long apprenticeships with no guarantee of ever becoming proprietors (Keating & Munro, 1989). Thus, we expect that early in the transfer process, farming children will have greater stake and less power in both family relationships and the farm business than will their parents. However, in the Generations Alberta study (Keating & Munro, 1991) our hypotheses were not borne out. We found that retiring generation men and women and receiving generation men had a significantly higher stake in farm and family than did the receiving generation women. Stake seemed to be based more on being an insider or outsider to the family or business than on generational differences.

The following questions concerning family and farm stake were addressed in the present investigation:

"1. What are the facets of stake in farm and family?


2. Do family members differ in the level of stake that they have in the farm and family?"

2.4 Family Stress and Coping

h the past decade there has been great concern about the farm crisis and rural researchers have been attempting to understand the stress of farm women and men during these difficult times (Armstrong & Schulman, 1989; Berkowitz, 1984; Fetsch, 1985; Weigel et al., 1987). Researchers have investigated both situations that are believed to be stress inducing (stressors) and outcomes or feelings of the individual (stress) (Cohen, et al., McCubbin & McCubbin, 1987; MeCubbin & Patterson, 1983). Stress is the degree to which individuals feel their lives are unpredictable, uncontrollable and overloaded (Cohen, et al., Although individuals may be experiencing a common stressor, they differ in degree to which they experience stress.

Farming is among the most stressful of all occupations (Smith, et al., 1977) because of the complexity of the business, the close working environment of family members, seasonality and financial risks (Jevne, 1980; Rosenblatt & Anderson, 1981; Walker, et al., 1986). Periods of change in the business can act as additional stressors (McCubbin & MeCubbin, 1987; McCubbin & Patterson, 1983).

One major change in farm families is the process of retirement and transfer. The transfer of a family-owned business is said to be one of the most agenising experiences in any business (Barnes & Hershon, 1976) because of the potential for family conflict over the disposition of the assets (Magnuson-Martinson & Bauer, 1985). Such conflict can permanently disrupt a family, as well as affect the efficiency of the farm. The period of farm transfer could be especially stressful for the younger receiving generation who may have little control over the timing of farm transfer. A case in point is a study of American farm families in which lack of independence was the number two stressor for the younger generation but the tenth stressor for the older generation (Weigel & Weigel, 1990).

Our recent research in New Zealand (Keating & Little, 1991) points to a critical phase in the farm cycle when children are ready to take over the farm but fathers are not ready to retire. Whereas some adult children felt that they waited much too long to take over, some fathers felt that their sons were not sufficiently mature or experienced to be sole operators. Other research on the intergenerational dynamics of retirement and transfer suggests that stress and conflict between parents and offspring are inherent in the process (Anderson & Rosenblatt, 1985; Hedlund & Berkowitz, 1979; Marotz-Baden, 1988; Russeil, et al., 1985; Titus, et al., 1979). Nonetheless, in the Generations Alberta study (Keating & Munro, 1991) no significant differences in levels of stress among men and women of retiring and receiving generations were found.

The manner in which farmers and their families manage the retirement and transfer process is often not openly discussed or dealt with by those most involved. Nonetheless,

"there are a cluster of family stresses directly attributable to the traditional pattern of family farming. The relationship adjustments necessary with the young wife coming into the family to live closely within the established and experienced orbit of her mother-in-law; sometimes the situation works admirably, sometimes it is disastrous for both women. The young farmer full of ideas and enthusiasm finding his father defensive and unreceptive. The father torn between handing over the reins and his emotional need to still be involved. The mother handing over her home - the comparable situation doesn't exist in city life. The family trust established in one generation as a sound economic expediency, that in the ensuing generation can cause financial tension and family conflict. Whatever decisions are made under these circumstances it can be a tinderbox situation" (Little, 1982, p207).

The amount of stress felt by individuals experiencing a stressor such as farm transfer is mediated by the physical and human resources of the individual or family (Koop & Keating, 1990; McCubbin & McCubbin, 1987; McCubbin & Patterson, 1983). Those who feel as if they have more control over decisions concerning the business have less stress than those not involved in decision making (Keating & Munro, 1991).

As well, the stake the individual has in the farm or family may also be related to stress. People with a stake in society have been found to conform to the norms of the society, while those without a stake are less conforming but more distressed (Munro & Keating, 1994). Thus in farm families, those who have a stake in the farm or the farm family should experience less stress than those with lower stake in the farm and family.

The following questions concerning family stress and coping were explored:

"1. Do members of farm families experience different levels of stress?
2. In what way are resources (financial and human) and stake (in farm or family) related to stress?
3. Is perceived decision making power related to lower stress?
4. Is involvement in retirement planning related to lower stress?"

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