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The Rural Voice, 1982-10, Page 14OFA executive members were startled to learn that the Ministry of Natural Resources are once again proposing a tax on all lands in Ontario. Dale Ferns of OFA properties dept. said, this is virtually the same proposal made in 1975. It was reported the MNR had no intention of informing OFA. "The first we heard of the proposal was when I received a phone call from a friend in industry," reported Mr. Ferns. As part of proposed revisions to the mining act, an acreage tax would be imposed on all mineral rights on all lands in Ontario. Failure to pay such a tax could mean the mineral rights would go to the crown. Under this proposal, the holder of the mineral rights must act to develop them or risk forfeiture and the holder of the mineral rights will have access to the property to explore or develop after thirty days notice. After the Ontario Federation of Agriculture objected in 1975, the proposal was not implemented. OFA has initiated such action again, however, land owners would be well advised to contact their MPP and let him know of their objections. The Ontario Federation of Agriculture has been making a major effort during the past two years to have a credit policy established that would be large enough to be meaningful for the total agricultural industry and have affordable interest rates. Minor programs (relative to the need) have resulted from our efforts, such as the Ontario Farm Adjustment Assis- tance Program and the Small Business Bonds. Our main proposal the "Agri -Bond" or "Tax concessional" lending concept has not been acted on. Under this concept an investor could invest in an agency such as the Farm Credit Corporation at a much lower rate of interest and receive tax concessions on the interest paid him; this would make it attractive for the investor and enable the lending agency to lend to farmers at an affordable rate. At the time of the latest federal budget, a study paper was released by the federal government proposing an indexed loan scheme. This idea would permit a farmer, for example, to borrow at the inflation rate plus two or three per cent interest. Only the two or three per cent interest would be tax deductible. Part of this concept would permit a borrower in difficulty to pay only the low interest; the balance, the inflation factor, would be added to the principal. The government has appointed an advisory committee of business and PG. 14 THE RURAL VOICE / OCTOBER 1982 FARM NEWS OFA REPORT financial people, headed by Pierre Lortie, chairman of the Montreal Stock Ex- change. This committee will hear from interest groups and inform the Minister of Finance of the advisability of proceeding with the indexed loan scheme. OFA has prepared a comprehensive study demonstrating how indexed loans would affect farmers. Two paragraphs from the summary of the brief will illustrate our concerns about this propo- sal. "Our analysis shows that, in terms of net benefit to a farmer, indexed loans are only marginally superior to standard FCC loans and substantially inferior to the OFA proposed Agribond loans. Further, if the assumptions made in the consulta- tion paper are tested out, indexed loans are even less attractive. The OFA cannot endorse the system of inflationary accounting management practice suggested by the consultation paper. A farmer who regularly adds the "inflationary component" of the interest to his unpaid principal is assuming (a) that his assets will increase in value at the same rate as inflation and (b) his repayment capacity will increase at (east as fast as inflation. Such assumptions and practices, in our opinion, are invitations to bankruptcy." Merle Gunby Regional director Trial period for electronic trading The Board of Directors of the Ontario Cattlemen's Association approved a re- vised proposal to conduct a five month trial period of an electronic auction for slaughter cattle. Total cost of the project is estimated to be approximately $150,000 of which it is proposed that the Ontario Cattlemen's Association, Agriculture Canada and the Ontario Ministry of Agriculture and Food each provide one third funding. The project will be directed by the Electronic Auction Committee of the Ontario Cattlemen's Association chaired by Mr. Bob Kerr, Chatham, Ontario along with Mr. Clarence Ackert, Kincardine; Mr. Neil Williams, Winches- ter; Mr. Join Bonsma, Blackstock and Mr. Jim Wideman, Manager, Ontario Livestock Exchange and Mr. Doug McDonell, Manager, Ontario Public Stockyards. The Committee will meet in the near future to begin their search for a project manager, to seek formal commit- ments from the federal and provincial governments and to make plans for equipment and training. The Committee has tentatively set November 1st, 1982 for start of the trial period. The project will involve those licensed auction sale operators and commission firms at the Ontario Public Stockyards which are willing to participate in receiving listings from producers who wish to use the new selling option. The Association proposes to contract with Electronic Marketing Association in Vir- ginia, U.S.A. for use of a computer package and will co-ordinate and supply the electronic services to co-operating sales operators and commission firms. The agents will fill their traditional role of providing marketing services to cattlemen but rather than receiving cattle at a physical facility, will assist producers in describing cattle being offered for sale and in sorting for delivery according to description. The computer will provide a detailed listing of each lot of cattle for sale and conduct the auction. Buyers using remote data terminals in their offices can receive listings and bid accordingly. In theory, the new selling option should increase competition, reduce shrink bruising and other costs in the transfer of cattle from feedlot to packer and improve the bargaining power of producers in that they can specify a reservation price and obtain a competitive bid on their cattle before the cattle leave the feedlot. Packers on the other hand, will in theory be better able to schedule deliveries to the plant and be able to reduce buying costs. The project will be evaluated to determine the practicality of selling cattle by description and how well it fulfills its theoretical advantages. ACCIDENTS WITH HIDDEN OBJECTS Many farm accidents happen each fall as a result of harvesting equipment running into hidden objects. Rocks and holes that are normally visible at other times of the year are often hidden by fully grown crops. Guard against the possibi- lity of this type of accident. Check all of your fields carefully. Use markers to warn machine operators of any hazards. This fall, protect your machinery and yourself against accidents with hidden objects.