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The Rural Voice, 1980-05, Page 32Advice on Farming how much, Insurance: how little BY DONALD J. SHAUGHNESSY, CA The farmer who carries adequate casualty insurance on his buildings, equipment and livestock is invariably the one who has already found out. the hard way, how expensive a loss can be without insurance. The classic expression that describes an act of prevention, taken too late, is based on a farm situation "Closing the barn door after the horse is gone." In the case of insurance, it is far cheaper to close the door while you still have your horse. No two farms are exactly alike, and it is difficult to develop a standard formula that applies to everyone. Nevertheless, a few generalities about insurance, and the people who sell it, are possible. The form of insurance that comes closest to doing the job that most people want done --compensating them for the true value of the destroyed object --is depreci- ated replacement cost insurance. You have a tractor that cost you $10,000 five years ago. It is destroyed by fire. With straight depreciated cost insurance, you may get only a $5,000 settlement, even though a replacement tractor will cost $20,000. Depreciated replacement cost insurance ignores the original price tag. It bases the settlement on what that same article costs new today, then works down from the current price according to the number of years you owned the tractor. Having settled on the form of insurance you want, you must next decide on what you want to cover. Certainly, this will include all equipment, insured against fire and theft; and all buildings, insured against fire and wind damage. Livestock tends to be underinsured. In Ontario, we don't think in terms of cattle being hit by cars, or chickens being spirited away in the middle of the night. It may be impossible to protect your livestock from every possibility, but it certainly is possible to protect yourself against a calamity with insurance. A farmer's feed inventory is seldom covered by insurance, particularly if he grew it himself. Many poultry farms that buy their feed insure it, but it is truly surprising that a farmer who has 20.000 PG. O THE RURAL VOICE/MAY 1980 bales of his own hay in the barn does not put the same value on it - by insuring it - as the one who bought it from someone else. Liability insurance should also be considered. Farms are quite risky places compared to factories and service indust- ries. and if a farmer tends to have visitors who are unfamiliar with his property, a $100 -a -year policy will give him $1 -million worth of desirable protection. And buying insurance? Lots of farmers double as insurance agents. The trouble is, they sell for only one company and don't usually have a wide knowledge of alternatives. Independent agents, on the other hand, can shop on their client's behalf for bargains and insurance to fit special situations. Who knows? Your agent may be able to find a special rate for horses stolen out of barns before the door is closed. Leased farmland grows BY GEORGE JACKSON, Food Land Development Branch, Ont. Ministry of Agriculture and Food In recent years, leased land has become an important component of many farm operations in Ontario. Traditionally, a farm operator owns the farm base and leases additional acreage as it becomes available. and if it is economically practical. However some farmers are leasing a total farm unit. They find they can farm without owning the land, yet still feel that their future in farming is secure. A group of farmers is leasing farmland from the Province of Ontario under the Ontario Farm Lease Program. The program developed and implemented by the Minis- tries of Housing, Government Services, and Agriculture and Food, ensures that the land capable of being farmed will continue to be farmed until needed for development. At the present time, the program has about 500 lessees farming about 80,000 ac. The main areas where land is being leased are in Pickering, Townsend, South Cayuga, and the Parkway Belt on the northern fringe of Toronto. The program sets out three main features: a stated term of the lease, a reasonable rental rate, and a responsible maintenance program. How does this translate into action? The lease term is for five years with the right to renew for another five. The rental rate is based on the value and potential productivity of the land, and the use and condition of the farm buildings and the housing. As would be expected, rental rates vary, depending on the area. From the start of the program, an effort has been made to provide an opportunity for the beginning farmer to lease a farm. To qualify, a beginning farmer must have agricultural experience, and must be prepared to engage in a food production program. Although all the farms are under lease at present. properties do become vacant when a tenant decides to give up a lease. When this happens, information on the farm is sent to those on our mailing list. The list is comprised of people who have indicated an interest in leasing farmland or farms for the Government of Ontario, for the purpose of food production. The new tenant is selected from those who applied to lease the property. The selection is based on a management proposal, pre- pared by the applicant, which outlines how the farm will be utilized. Applicants may be asked to furnish projected three-year cash flows, operating budgets and details of previous farm management experience. If you are interested in receiving information on the Ontario Farm Lease Program, write to the Food Land Develop- ment Branch, Ontario Ministry of Agricul- ture and Food, Queen's Park, Toronto, Ontario M7A 2B2, or call (416) 965-9433. Following your enquiry, a registration form will be sent to you. Complete the form and return it. Your name will be placed on the mailing list, and you will receive information on the properties which can be leased as they become available.