The Rural Voice, 1982-12, Page 24OFA REPORT
Merle Gunby, Regional director
A banker is nothing more than a money
salesman.
If we keep this in mind when dealing
with our banker, treating his advice
similar to any other salesperson, we
would be much more judicious when
asking for or accepting loans.
Recently, OFA executive met with the
Agricultural Committee of the Ontario
branch of the Canadian Bankers' Asso-
ciation in the vast innards of the Bank of
Montreal building in downtown Toronto.
This committee is comprised of the
agrologists from the various chartered
banks.
Several topics came under discussion
including Small Business Bonds (SBBs),
the Ontario Farm Adjustment Assistance
Program (OFAP), liens against farm
property, loan security regulations and
the poor cash situation of the farm
industry this fall.
The bankers reported most banks still
have money available for SBBs. The
lower rate of return from SBBs is offset
by certain special tax considerations,
thereby giving the bank a net return
similar to other loans. This means the
amount of money available for this
program varies with the profit situation at
a given bank. The bank representatives
maintained that the tax position of a
lender was a new element that interfered
with normal business decisions when
considering a lending program. Deciding
whether an applicant qualified for a SBB
FARM NEWS
loan is another grey area, so much so that
applications were often sent to the tax
department in Ottawa for a ruling before
the bank would act on it.
Surprisingly the bankers reported the
OFAAP program was a good one and
after some start up difficulties, was
working well. Once again they said the
introduction of a social factor, by
targeting the loans to a specific segment
of the population, was an undesirable
complication of a business decision. Some
positive aspects of the program are it
forces farmers to use better accounting
methods and it forced OMAF, the banks
and the farmer to work together to create
a better management package. Good
financial management will probably be a
condition of credit in the future.
Farmers have been complaining re-
cently about the all encompassing security
blanket granted to the banks under
Section 178 of the Bank Act. The bankers
at this meeting contended that S. 178 only
gave named inventory items as bank
security. Any all encompassing security
held by the bank probably meant that a
farmer had signed some other form of
security document. Once again, it be-
comes critical that a borrower must pay
more attention to the details of the
security arrangements with his creditors.
A number of farmers have complained
to OFA about the liens that have become
attached to land or chattels in the past
which have never been removed. When
the land or equipment was sold, the liens
were discovered and sometimes caused
some major complications. It boils down
to the fact the ultimate responsibility for
maintaining a clear title rests with the
owner. One bank representative suggested
he would like to see the banks send a letter
annually to borrowers,outlining all loans
and security arrangements with the cus-
tomer.
Ron White, head of the OFA delega-
tion pointed out that the farm community
was facing a severe cash shortage this fall
and urged the banks to do everything
possible not to aggravate an already
serious situation. The bankers let it be
known they are aware of the problem but
each case would be judged on its own
merit; a great part of their decision would
be based on a farmer's management
ability and his willingness to co-operate
with his banker.
Huron county boar
one of top Durocs
A Duroc boar from the farm of Robert
Robinson, Walton tied for top honours
among the Duroc test station graduates at
the Ontario R.O.P. Swine Test Station.
The Robinson Duroc with an index of
130 combined very low backfat thickness
of 10.9 mm (.43 inches;) and good aver-
age daily gain on test of .90 kg (1.98 lbs.).
Highest indexing boars in the entire
group of 122 from across Ontario were a
Yorkshire from Murray Bancroft, New-
ton, with an index of 136 and a
Hampshire from Ralph Henderson, At-
wood, with an index of 133.
Also among the highest indexing ten
boars selected for the sale were Yorkshires
from James Taylor, Woodstock, Murray
Faris, Bradford and Jameshaven Farm,
Perth and Landrace from Richard Stein,
Tavistock and McDermid Farms, Stay-
ner.
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Visit us at S.W. corner Hwy. 86 & Moorefield Road
PG. 24 THE RURAL VOICE/DECEMBER 1982