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The Rural Voice, 1985-12, Page 10research that may make a difference is a detailed report on current farm finances, commissioned by the On- tario Agricultural Advisory Council. This report will be used by council members in assessing government agricultural policies. Although Brinkman's previous farm income study, in which he included capital appreciation of farm assets in com- paring farm and non-farm incomes, generated a good deal of criticism, the economist has used the same methodology in his latest research. This time, using statistics from the 1980s, his study documents reduced farm incomes in Ontario along with a very large capital depreciation. "It is extremely important to measure changes in asset values, even if some farmers want to ignore them, because they represent the collateral on farms that farmers must have to be able to keep their loans. The bot- tom line is that banks will count the capital depreciation whether the farmer wants to or not...." says Brinkman. By documenting farm asset values "both when they go up and when they go down," the economist says he hopes the public can better understand the problems facing farmers now (rather than dur- ing the more prosperous 1970s). The more information researchers can provide, the more the general public can be educated about the situation facing farmers, Brinkman says. But he cautions that researchers like himself must often wear two hats. While they study policies that might provide an immediate bailout for individual farmers experiencing financial problems, they also have to consider how government policies will affect the industry as a whole, over the longer term. This means, Brinkman notes, that "sometimes we will have to take positions unpopular with some people." "You don't give up easy in this business, you keep at it all the time," he says. While his study of Canadian farm incomes has proved Brinkman's most unpopular research to date, the economist has also ruffled some feathers with his recommendation concerning Section 31 of the Cana- dian tax law. tion and still make money after taxes, deferring income by increasing inven- tories from year to year. "If I'm a full-time farmer, is that fair competition?" asks Brinkman, noting that most of the discussion in Canada has been from the part-time farmers' point of view. "Furthermore, some part-time farmers may not realize what they'd be getting into. Right now farmers must meet the expectations of profit rule to be able to deduct any farm losses. Many of the part-time farmers likely couldn't meet that rule if it was The secret of getting into farming in the '80s is, "Don't enter when you are ready, enter when the time is right." Section 31 is the provision that allows part-time farmers to deduct only $5,000 out of their first $7,500 in losses against their non-farm income. There's been increased pressure from part-time farmers, including some government bureaucrats who own farms, to have this restriction eliminated, Brinkman notes. "There's no question this would help most part-time farmers, but it could also hurt full-time farmers, especially livestock producers," he says, pointing to the American situa- tion. In the States, where unlimited write-offs are allowed, high income non -farmers have developed syn- dicates to invest in large livestock feedlots, in direct competition with full-time farmers. Because of the tax laws, they can lose money in produc- rigorously enforced but they slip by now because it's not worth going after all of the small operators (with less than $5,000 in losses). If you allow unlimited write-offs, the only control on the system will be the ex- pectation of profit rule. This will like- ly mean that Revenue Canada will have to enforce this rule very careful- ly and many of the people who now get by will likely get caught and could have their back taxes assessed." Brinkman had expected Section 31 to be eliminated in Finance Minister Michael Wilson's budget last spring. He was pleasantly surprised when the rule governing part-time farmers was left untouched. Another unpleasant message Brinkman and his fellow university professors have found themselves 36TH PRODUCTION SALE Saturday, Dec. 28 at 1 p.m. 80 OPEN GILTS 70 BOARS 10 BRED GILTS Sale being held at the farm of Warren Stein located 1 mile south and 2 miles west of Tavistock. We offer you one of Ontario's largest selection of R.O.P. tested and veterinary approved breeding stock. Our herd is maintained as a closed minimal disease operation. Ranked "Good" by the Animal Industry Branch. A good selection of boars & gilts available for sale at all times. Delivery arrangements available at reasonable rates. For further information or catalogues, contact: RICHARD & WARREN STEIN R.R. 06, Woodstock, Ontario. N4S 7W1 PH. 519.655.2942 or 462-2704 YORKSHIRE DUROC HAMPSHIRE $ THF RIIRAI VOICE reelillg Vitt LANDRACE & HYBRIDS Wishing Our Customers, a Happy and Prosperous 1986 Best wishes from Thames Bend Farms & Staff