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The Rural Voice, 1980-09, Page 18Start the Season Right with • We'II inspect your equipment thoroughly • We'II repair any parts or components needing repair • We'II replace those parts likely to fail during the coming season • We'II lubricate your equipment and make all needed adjustments for top operating effi- ciency t• iP. ..your best defense against downtime. INTERNATIONAL° AGRICULTURAL EQUIPMENT 1 SFE STRATFORD FARM EQUIPMENT LTD. P.O. BOX 232, HURON ROAD WEST OF STRATFORD TELEPHONE 519-393-6162 N5A 6T1 HOURS: Monday -Friday 8:00 a.m.-5:30 p.m. Saturday 8:00 a.m.-12 noon PG. 18 THE RURAL VOICE18EPTEMSER 11100 FARM MANAGEMENT Selling the farm BY GARY STEPHENS, Assoc. Ag. Rep. One recent farm call regarding the sale of a farm property turned out to be very refreshing in these days of escalating prices, uncertainty and gloom. The property owners have lived a long, satisfying life on the farm and have decided to sell. There are no children or family interested in farming and the land has been rented to a neighbour in recent years. Because of the proximity of the farm to a populated area, there are both farmers and speculators interested in the property. One young farmer who is developing his own farm business was interested in the property and another, more speculative person, who probably gave agricultural interests a much lower priority, was also interested, and offering more money. Legal representatives discouraged selling the farm at a lower price with the explanation that their responsibility would be to conduct the sale of the farm in the manner which would be best for his clients. He obviously felt that getting the most dollars possible would be the only consideration in determining what was best for the owners. The owners, however, had concerns other than money as well. The owners were very aware and concerned about the importance of farmers in our country, the many uncertainties they face and the heavy financial burden a young farmer must carry. The property owners have spent their whole life on the farm, living in a very modest manner. They have no desire for additional material things and are not physically able to travel. They have researched the cost of "home" care and have decided that the proceeds from the sale plus pensions and savings will be more than adequate to provide a comfortable secure retirement and any special care that may be required. After evaluating both alternatives completely, the owners have decided that in their minds the best choice for them would be to sell to the young farmer. They decided that the dollar difference between the two offers would be more than compensated for by the personal satisfaction of knowing that the farm will continue to be a productive farm operated by a person they know and have confidence in. They also feel good about helping the young farmer expand his business into a more viable operation without taking on a debt which could become crippling. I am sure many young farmers would like to meet a person like this who has a farm for sale and many retiring farmers would like to be able to give a young farmer a break as well. However, before anyone either offers their farm for sale at a "bargain price" or offers to buy a farm at a "bargain price" they must consider the consequences. A person retiring from active farming should be sure he will have adequate proceeds from the sale to maintain the lifestyle desired until death, giving serious consideration to things such as general living expenses, inflation and possible special care. In determining the net proceeds from the sale one must consider capital gains tax, legal expenses, etc. For a purchaser, although the proposal may at first appear to be a bargain or a once in a lifetime opportunity, he too should give careful consideration and do a lot of pencil work before making an offer. Unless one can make a significant down payment from cash reserves, calculations may show that even at a modest price the additional land may not generate the cash flow required to repay the increased debt. For someone who is already stretching their budget, this "bargain" could lead to serious financial difficulties.