The Rural Voice, 1982-08, Page 24OFA
REPORT
OFA president Ralph Barrie recently
appeared before the House of Commons
Standing' Committee on Finance, Trade,
and Economic affairs. An abbreviated
version of that presentation follows:
The Ontario Federation of Agriculture
is primarily concerned with how well
banks have fulfilled the financing needs of
agriculture. The present strained re-
lations between banks and the farm
community indicate there are problems
that need to be addressed.
Banks are a necessary part of farm
financing. They are unwilling to provide
fixed, long term mortgages similar to the
Farm Credit Corporation. When banks
first began making long term loans to
farmers, FCC funding was generally
adequate. Since that time, FCC funding
has declined drastically. Not coin-
cidentally, bank lending terms have
worsened. Competition from a well
funded FCC is necessary if chartered
banks are to offer long-term credit
commensurate with the needs of the
agricultural industry.
Both OFA and CFA have repeatedly
requested the federal government to
increase funding for FCC.
Agriculture is biologically based, pre-
senting special problems that need to be
recognized. Weather extremes create
problems for farmers. Inventory turnover
is slower than in most other businesses.
Capital investment in agricutlure is
NEWS FARM
higher in relation to the earning ability of
that capital in most businesses.
Both the lender and the borrower must
learn to cope with these special needs of
our industry. It is in the banks own interest
to encourage farmers to seek the best
advice available and to recognize the local
bank manager as not necessarily the
individual to provide that advice. Another
matter of concern, is farm loans based on a
farmer's equity. The current economic
conditions which have eroded many
producer' equity has highlighted the
weakness of this practice.
There are major difficulties with the
conditions banks impose on their
borrowers. Some of these problems are:
banks often request collateral security far
in excess of the value of the money being
borrowed. Security should only be re-
quired to a maximum of 150% of the loan;
banks should not be able to call loans when
crops or animals held for security are not
ready for market; bank security
agreements tying up goods that will be
aquired in the future, are unecessary
where there is already sufficient col-
lateral. Banks, without demand or notice,
should not be allowed to forcibly break
open, enter, lease or sell property; banks
should not be able to require people to
sign waivers of all their rights unless they
get some advantage in return. eg. a
percentage point less of interest; the
conflict between the federal Bank Act and
the provincial Personal Property Security
Act should be clarified.
The image of the chartered banks in the
rural community has taken a beating in the
past two years. There are probably cases
where the banks have been credited with
more blame than is justified. The
problems outline legitimate concerns.
Banks must deal with these problems if
they wish to improve their present
strained relationships with farmers.
Merle Gunby is a member of the Ontario
Federation of Agriculture Executive
Committee with special responsibilities in
Huron, Perth, Grey, Bruce and Welling-
ton counties.
A day of competition
Over 500 youths will be participating at
the 1982 Regional Junior Day program to
be held in Stratford at the fairgrounds July
29.
Members of 4-H club and Junior
Farmers meet for a day of competition in
judgingdemonstrations and quizs.
Formerly held at the Western Fair
grounds, competitors come from Essex,
Kent. Lambton, Elgin, Middlesex,
Oxford, Huron, Bruce, and Perth
counties.
Entries are made through the local 4-1-1
co-ordinator and the day is sponsored by
the Ministry of Agriculture and Food and
Pioneer Seed Corn Ltd. The classes are
open to all young farm people in
categories of 12 - 14 years, 15 to 17 years
and 18 to 30 years.
Samples of soyabean, haylage as well as
beef, dairy, sheep and swine stock will be
evaluated.
Prize money and trophies are supplied
for contestants.
Wish you had put a Swimming Pool in last Spring?
Wouldn't it be nice at the end of a hot day in the fields to be able to jump into your own pool?
Call John Middegaal for a free estimate. He has pools in shapes and sizes to fit any budget — including yours
Note for farmers: Liquid chlorine available $9.95 for 20 litres in our containers.
Middegaal
234 Main St. N., Seaforth
527-0104
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PG. 24 THE RURAL VOICE/AUGUST 1982