The Rural Voice, 1979-01, Page 6BRAD CARNOCHAN
father hada mixed operationwith pigs and dairy cows and the
two men have "more or less expanded the operation" since.
Initially. Tom's father supplied the capital "and 1 had my labour
to offer back to him."
Admitting "father -son agreements are some of the funniest
going," Tom Melady said today it would be next to impossible
for someone with an interest in agriculture business. Today, Tom
Melady owns 50 acres of land near the 100 -acre family farm,
operates, his own farrow to finish operation and is gradually
purchasing the family dairy operation as his father retires.
Kurt Keller. 26, of Mitchell. is the most recent arrival to the
business of farming among the six young farmers interviewed.
Until five months ago. Mr. Keller was employed as an Ontario
Hydro lineman. While he was raised on a farm. Mr. Keller left
school at 16, and worked on a number of construction jobs before
japing Ontario Hydro. While farming was the main topic of
conversation at both the breakfast and supper table when he
lived at home, Mr. Keller though farming was "too much of a
responsibility when I was single."
FARROW TO FINISH
But after Mr. Keller married. the transient life of a lineman
didn't seem as attractive. When a 15S acre farm near Mr.
Keller's home farm came on the market, he decided to buy it.
and go into a farrow to finish operation. Since the barn on the
,property had burned year before, Mr. Keller and a hired man
have spent the past four months constructing a new barn to
house the pig operation. In two weeks. Mr. Keller expects to
have one-third of the building completed.
By the time everything is finished, he estimates he'll have a
modern building with sloped floors and new pens for half the
price a professional contractor would have charged. While Mr.
Keller admits living off his savings and his wife's earnings has
been a bit "rough" , he doesn't regret his decision to become his
own boss.
If there's one major consideration facing anyone entering
agriculture, it's certainly financing. As farmers become more
and more specialized, increased capitalization has become a fact
of life.
Recently Agriculture Minister Eugene Whelan sounded a
warning in the House of Commons when he said, "The number
of applications (to the Farm Credit Corporation for loans) is far
greater than we had anticipated. We are running out of money at
this time because of the confidence expressed by their
(applicants') desire to enter agriculture at this time."
With Mr. Whelan and other farm organizations asking private
lending institutions to do more to assist the beginning farmer,
it's interesting to study a report prepared by the Rural
PG. 6 THE RURAL VOICE/JANUARY 1979
Development Outreach Project (RDOP) staff tion, the University
of Guelph.
In interviewing h4 cwnger• farm operators in the counties of
Huron and Northumberland,
RDOP statt member .lean Uowns reported 80 per cent entered
farming with a mortgage on both land and buildings.
Government lending programs contributed financing for 41 per
cent. then private individuals for 27 per cent and public lending
institutions for II per cent.
However, 21 per cent of the younger farmers were able to
enter the business without a mortgage by ntegns of a partnership
or working agreement.
In a second study. also conducted by RDOP staff, who
interviewed ag. reps and farm management specialists with
O.M.A.F., the OMAF staff reported opportunities for entering
farming were limited unless young farmers could expect family
support.
INDEBTEDNESS
Total farm indebtedness. although not necessarily only on the
part of younger farmers. to government. banks and other
financial institutions is about $10 billions. double Canada's total
balance of payments in 1977.
Brad Carnochan said he doesn't know how anyone could enter
farming today "without a lot of backing behind you." He saved
money in his first year of farming by borrowing his father's
machinery and equipment and the two men redid the interior of
the barn themselves rather then hire outside help.
With the price of land so high, Mr. Carnochan took a careful
look at whether it would be cheaper to buy more land and raise
all his feed. or else cheaper to buy feed. His decision was to grow
his own high moisture corn but buy extra feed.
Kurt Keller borrowed money to finance the purchase of his
1 55 -acre farm from Farm Credit Corporation. His application
was accepted without any problems. perhaps because he applied
just as the corporation's annual budget had been drawn up
His investment in the farm doesn't necessarily cause sleepless
nights. "If you do well, there's no problem paying it (the loan)
off. if you don't do well. then just sell (the farm)."
Since the land purchase and barn construction costs of using
up most of his sav ings. Kurt Keller and his wife are living in an
apartment in Mitchell. eventually planning to buy a house trailer
as their temporary home on the farm.
Since Mr. Keller has just started farming, he plans to borrow
his father's equipment at first and doesn't know yet whether he
can grow all his own feed.
Mac Armstrong. the firm believer in not taking over the family
farm. thinks too many younger farmers think. "just sit
comfortably and you'll eventually get your daddy's farm."
Mr. Armstrong has made use of a number of government
programs in setting up his beef operation. Money from the Farm
Credit Corporation bought the 100 -acre farm he lives on. and he
used the Canfarm bookkeeping service for a time.
Now Mr. Armstrong is making use of the Canfarm computer
service which computes the ration formulation for his beef
finishing program • a service he finds is worth even more than
Canfarm's bookkepping.
WATCH PURCHASES
One major warning Mr. Armstrong sounds to anyone just
entering farming is to watch machinery purchases. "It's easy to
buy yourself into debt on machinery," he said.
He borrowed. rented and exchanged the use of machinery for
his labour when starting up his operation.
Also, anyone planning to borrow money from either a
government or private lending institution, Mr. Armstrong said,
should do some studying beforehand so you can sell the package
to the lending institution you deal with. He recommends dealing
with Farm Credit Corporation if possible for the lower interest
rate they offer "the paper work is terrible, but it's worth it."
The Ahrcn si brothers haven't had to turn to the Farm Credit