The Rural Voice, 1978-12, Page 24on inflated land values. Ontario's farm
land price index (1961=100) stood at 593 in
1976, the highest in Canada. The national
average index was 388.
The NFU brief stated that "inflated land
values relative to farm prices and
productivity ratios distorts the farm
economy, all of which points to a
contradictory and unstable situation in
farming, especially for the younger
farmers.
Dairy farmers want raise
Dairy Farmers want araise in pay but
federal agriculture officials aren't co-
operating.
The farmers have asked the federal
government to increase the target return
price, a guide to what processors pay
producers for their milk. The actual
amount is determined province by pro-
vince.
The federal government said an increase
could cause a drop in consumer demand for
butter, cheese and ice cream.
The farmers in turn said without the
increase, there could be a shortfall in the
next few months in the production of
industrial milk,. which is used in manu-
facturing dairy products.
The formula used by the federal
government to determine the target return
indicate an increase was due at the end of
June to $12.94 a hundredweight from
$12.42 ahundredweight.By now the figure
would be approximately $13.
The Canadian dairy commission, which
supervises the national dairy plan, said the
increase isn't automatic and consumer
interests have to be considered.
Also, a commission spokesman said
there is no danger of a shortage of milk.
He said farmers should realize that
"increases in target returns can more than
be offset by a drop in consumption because
of higher prices."
A spokesman for the Dairy Farmers of
Canada, the producer organization, said
while there will likely be a drop in demand
for butter and cheese if prices are
increased, it won't be as great as some
fear.
Butter consumption has dropped by 30
per cent since 1970 to about 10 pounds a
person annually.
Unincorporated farms
still dominate Ontario
Despite changes in federal legislation
earlier this year, unincorporated farn-sstill
dominate the rural scene.
• Dick Heard of the provincial agriculture
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PG. 24 THE RURAL VOICE/DECEMBER 1978
ministry said there are two criteria farm
operations should meet before farmers
consider incorporation.
The first is when farm income is high
and it is a,growth business, then "incorp-
oration is an advantage because corpor-
ations are taxed at a lower rate than
individuals," Mr. Heard said.
Also when there are more than two
persons involved in the farming operation,
shares are a clear-cut way of letting the
participants know exactly where they stand
in the business.
Mr. Heard said between original federal
tax reform legislation in 1972 and amended
legislation earlier this year, incorporation
had become a millstone around many
farmers' necks.
Before the amendments, it was difficult
to pass incorporated farms from the older
generation to the next generation without
paying heavy capital gains taxes.
Under the new legislation. it is possible
to postpone the capital gains tax which is
now paid over an extended period.
Mr. Heard said while the corporate
structure can be "tidier" than other forms,
it isn't necessarily the best alternative for
all farm operations.
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