The Lucknow Sentinel, 1982-04-07, Page 256 - - The Fara Mho, Week .f April, 7
1982
Financial row a
mosommommosmosmak
Although farmers have a
.reputation ,of complaining
when the weather or the
markets are treating them
harshly, they generally des-
cribe themselves as eternal
optimists.
As financial complaints es-
calate, forecasts are so bleak
for red meat, grain ' 'piices
and interest rate levels, that
farmers' eternal optimism is
being heavily taxed.
Stories of farmers, pushed
to the brink by mounting
debts and with no forese-
eable way of overcoming
them, walking away from
their farms, are grabbing the
headlines, even in big city
dailies.
Bankrupt farmers are not
alone. According to.. statistics.
from a farm bankruptcies
Plan
includes
more
farmers
tough one for farmers to hoe
*from page 2
as well as financial' and
management advice.
Barrie understands 'some •
farmer's reluctance to 'use
the program because of
paperwork involved. But if
they look at it carefully they
may find that if they are still
using their 1981 lines of
credit they could get back 25
•
per cent of their interest
payments.
Rebates could reach
510,000 to $15,000 for some
farmers. "That got to be
worth a couple • of days,
working on their books."
Barrie said the :OFA con-
tinuesgetting complaints
about local bank branch •
managers being reluctant to
help farmers apply for the
program. Timbrell told him
that the agriculture ministry
wants to know about specific
cases so it can report them to
bank head offices:
AQP Help
The OFA has • advised
farmers to' approach . their
agreps first for help to apply.
But senior bankingofficials.
have expressed great willing-
ness to make the program.
work.
While the expanded . pro-
gram has been implemented
quickly, Barrie doubts other
throne speech promises will
be'see as soon. A plan to help •
young farmers get started in
agriculture is still in the
works.
The speech also promised
more attention will be paid to
Foodiand Ontario for promot-
ing farm products. And, new
identification standards are
to be developed that will let
consumers recognize Ont-
ario -grown food more easily:
The government pledged it
will "play a leadership role"
to get national income stab-
ilization established. Favor-
ed, are three-way: plans invol-
ving Ottawa, the provinces
and producers.
report completed in 1981,
234 Ontario farmers declared
bankruptcy between January
1, 1979 and March 31, 1981.
Of . that number, , livestock
producers were the hardest
hit, accounting. for 112 of
those bankruptcies.
Financial and agricultural
exerts are predicting the
trend will continue through
1982 as farmers who have
been struggling to stay afloat
finally call it quits - or . have
that decision made for them
by their bankers.
The rush to apply for the
S50 million available through
Farm Credit Corporation for
additional loans and interest
rebates announced in the
November12budget was so
great the money is already
gone.
High interestrates and a
relatively low return for the
amount of money invested
have been cited most often as
the reasons for the rapid
increase in farm bankrupt-
cies.
A typical scenario of .a
farmer likely to be in financ-
ial trouble today is a relative-
ly young man, who borrowed
money in the late 1970s at.10
to 12 per cent interest to
expand his operation. His
costs of operating have risen
more quickly than his profit
and he's; now faced with
another financial slap in the
face - interest rates in the 15
to 20 per cent range.
.Instead of making pay-
ments on the principle, the
farmer is paying interest on
his interest. Interest on inter=
est compounds pretty fast.
Especially hard hit are the
larger producers. While their
sales are larger than the
smaller producer, their ratio
of liabilities -to -assets is also
higher.
The prolonged recession in
the general economy has the
most frustrated farmers not
only challenging banking and
government institutions, but
also resulted in friction am-
ong farmers on how to best
change their marketing . sys-
tems to. increase financial
security.
The most extreme form of
marketing change being con-
templated by beef and pork
farmers is adopting supply -
management.. marketing
boards, which attempt to
limit production to anticipat=
ed consumer demand, at the
same time guaranteeing
farmers a price to cover
production costs.
But the debate on control-
led .production is heated in
the beef and pork commun-
ity, because both traditional-
ly have been havens for free-
market advocates.
The marketing board de-
bate this year is bound to
reach the political arena as
federal Agriculture Minister
Eugene Whelan and former
provincial minister, Lorne
Henderson have both urged
beef and pork farmers to.
adopt supply -management
marketing systems to solve
their problems.
high levels, governments
and, batiks will come under
increasing criticism from
both farmers. and consumers,
Farmers will be looking
increasingly at not only get-
ting higher pricesfor their
products, but also cutting
back on production costs to
make ends meet.
Already beef and pork
farmers are cutting back
production, which will ultim-
ately result in higher prices
for red treats, whether those
commodities adopt • supply -
management marketing
boards or not. .
Red meat farmers and
cash crop farmers, facing
dim price prospects, will also
be looking at how to cut
corners on costs on the farm.
Farmers will be looking at.
methods of getting maximum
returns at minimal cost
Turn to page 16•
This Year Settle For Nothin
Hyland Seeds
offering the best pedigreed seed
from public, proprietary and
'private sources.
Seed 61'01115
------ White Beans
00111
Soybeans Including:
Vigor -Rated
Less!
/: a dozen stringent criteria
identify soybean- seed which is
superior to all Others. Promises
better stands yet costa no more to use
DRY FERTILIZER
CUSTOM
APPLICATION
28% LIQUID NITROGEN
ALONE OR WiTH
CLOVER SEED OR
WITH CHEMICALS
Our nursing equipment keeps
our machines in the field or
we have delivery units to fill
your bulk hoppers on the
farm'.
LET US SERVE ALL YOUR 1982 CROP INPUT NEEDS
. We have INSTALLEDA NEW BULK BLENDER AND HAVE RENTAL SPREADERS'AV,AILASLE.
1No also stock a complete line of Agri -chemicals, seed clovers and grasses, Innoculants for forage or
soys.
0
Pt. Albert 529-7135 or 5297700'
Mitchell 348-8433 Hensall 262.2527 Granton 225-2360