The Rural Voice, 1982-04, Page 9year, try to figure out who owes what.
We've being doing it for so long now, that
the labo r works out pretty even. We
don't worry about that part very much
anymore. Then we base the use of the
tractor on tractor -hours used.
"You have to be able to get along with
the other person," Keith says, "Glen's
land dries out sooner than mine so we
usually start working there first. When
we're cutting corn, we usually alternate
each year."
"It's a pattern we're used to and it
seems to be working good," Keith says,
"It gives us more equipment than we
could each own ourselves."
Lorne Eadie and his four sons also have
taken advantage of the FCC machinery
loan. Doug, the oldest son, owns and cash
crops 220 acres, rents 100 acres and works
part time off his farm. Dave owns 490
acres and rents 55 acres; Ken and Steve
are employed by their father, but Ken also
owns 100 acres and Steve rents 100 acres.
Their father, Lorne, owns 800 acres.
The FCC syndicate loan was acquired to
purchase three main pieces of equipment:
a 250 hp., four-wheel-drive tractor, a corn
planter and a seed drill.
Dave, the second eldest son, says a log
is kept of tractor hours each uses on his
own farm. Each person puts in his own
fuel and keeps track of expenses. There is
a separate bank account under Eadie Beef
Farms and all expenses are added
together. The number of hours put on the
tractor per farm is divided into it and a
figure is charged back to each of them.
The land ready first gets top priority.
One brother usually drives the big tractor
exclusively, keeping track of his hours in
the log book, charging it against each farm
as he works.
The seed drill and corn planter costs are
divided out on an acre basis. Dave says.
He has found, by keeping good records,
that custom rates for planting corn are not
too high when you have the cost of owning
a piece of machinery to consider. "Our
costs for the corn planter alone, are very
near what it would cost to have it custom
done," he says.
Lorne still owns the majority of the
equipment. "The syndicate was a way we
could start to buy equipment," Dave says.
"Lately, though, anything to be replaced.
instead of our father buying it, it'll be one
of us. But he still buys some equipment."
Dave says keeping track of costs is
important. "Doug figures out the books
for us and we have a good accountant to
prepare a statement for us for tax
purposes and write-offs on the syndicate
machinery. The syndicate loan was taken
out in 1978, he says, and it was certainly
attractive then. The interest rate was
somewhere around ten to ten and three
quarters percent and at a fixed rate. Better
than what you could do at the bank. And
it's worked well.
Ron and Glen McMichael and Norm
Fairies, in the Gorrie-Wroxeter area have
worked out a winning combination since
getting a FCC loan more than 12 years
ago. They have a three-way split with two
combines, a swather, baler and wagons.
Norm and Glen have a dryer (Glen owns
one third and Norm two thirds). They have
a separate bank account and needed
repairs are made on a per acre basis. Glen,
like the other farmers in this article says it
works out just fine.
Other farmers have tried even simpler
combinations, such as sharing equipment
for one operation (one owns a manure
pump, the other the tank; one owns a
stone picker, the other the stone rake).
They say splitting the cost of owning or
using machinery with a neighbour or
relatives is a good co-operative approach
to farming to increase the profits of those
involved.
FARM SYNDICATE
CREDIT ACT
Mike Rogers. Farm Credit Corporation,
has 22 machinery loan syndicates
registered at the Goderich office. Six of
those were formed last year when the
interest rate started to climb.
Under the Farm Syndicate Credit Act,
the corporation "may lend to a group of
three or more farmers who have signed an
agreement for the joint purchase and use
of machinery, buildings or installed
equipment, an amount up to 80 per cent of
the cost to a maximum of 15,000 dollars
per member or 100,000 dollars in total.
whichever is the lesser. Loans are
repayable over a period not exceeding 15
years for buildings and installed
equipment, and seven years for mobile
equipment. Interest rate is based on the
costs of funds to the corporation and its
expense in serving the loan." Simple and
workable agreements are provided by
FCC.
Rogers says getting two farmers to
agree is fairly easy but three is a little
harder. "There could be friction," he
says. "A large tractor would be wanted by
them all at the same time, but if there's a
proper written agreement, there should
be no trouble." He says they have never
had to settle a problem arising from a
written agreement.
Mike Rogers, F. C. C.
Last year, mortgage loan interest in
April went to 16 and three-quarter per
cent the syndicate loans went to 17 and a
quarter, half a percent higher than the
mortgage interest, the first time for that to
happen. At present the fund for a
syndicate loan is depleted but more funds
will be available in April. The interest rate
for a syndicate loan will be set April 1.
What it will be is anyone's guess.
Pointers on sharing equipment
Art Lawson, OMAF, Stratford, says
sharing or using equipment jointly does
not have to be complicated. He offers the
following points:
1) Remember, things don't go exactly
how you plan.
2) Make sure you share equipment with a
compatible person.
3) Be prepared to make it work eg. if you
share a combine, take turns on who uses it
first or consider soil type as a factor.
4) Accept the fact that machinery breaks
5) Base ownership on how much acreage
the machine is doing.
6) Base maintenance costs on percentage
used or hours used.
7) Get it on paper, each sign and each
keep a copy.
8) Review your agreement yearly.
THE RURAL VOICE/APRIL 1982 PG. 7