The Rural Voice, 1986-02, Page 10Hampshires and Durocs
Registered. R 0 P. Breeding Stock
Purebred and Crossbred
LODON ACRES
Don Johnson & Sons
R.R. 2, Mildmay
519-367-2111
WARD
MALLETTE
CHARTERED
ACCOUNTANTS
Exeter
Box 299,
NOM ISO 235-0120
Hanover
485 10th St.,
N4N 1R2 364-3790
Mount Forest
Box 418,
NOG 2L0
123-2351
Orangeville
77 Broadway, 2nd floor,
L9W 1K1 941-0681
Owen Sound
Box 397,
N4K 5P7 ..376-6110
Port Elgin
Box 509,
NOM 2C0 832-2049
Walkerton
Box 760,
NOG 2V0 881-1211
Wiarton
Box 249,
NON 2T0 534-1520
8 THE RURAL VOICE
financial condition" but want a
professional to analyze their
operation to determine if their
equity situation is deteriorating.
Phillips notes that since 1981,
"most of the banks have become
more aware and much more con-
siderate in their dealings" with
financially -troubled farmers, par-
ticularly the Toronto Dominion
and Royal Banks. "There has been
a tremendous change in attitude,
with the exception of one bank,"
he adds, declining to name that
bank.
Phillips says banks have
recognized that "there is just no
point in putting farmers off the
land for no purpose other than to
show the community that you're
not going to tolerate taking a loss.
I mean they were a party to the
reasons for the loss and the banks,
most of them, acknowledge that
that was the case." The problem,
says the former banker, was that
banks were equity lenders rather
than cash flow lenders, which is a
totally unsound lending practice.
But the banks can still improve
their handling of the current finan-
cial crisis facing farmers, accor-
ding to Phillips. At November's
Project Hope think tank session on
the agricultural crisis, two banks
sent cheques to support the con-
ference but no representatives, and
other banks sent minor staff.
"They should have sent represen-
tatives at the vice-presidential
level," says Phillips, noting that
the FCC and the provincial and
federal agriculture departments
both sent senior administrative
personnel to Project Hope.
However, the Kingsmount staff
generally find that the banks are
reasonable "when they feel they're
dealing with a reasonable in-
dividual." Kingsmount policy is
always to work above -board with
creditors. They will not allow
clients to sell livestock or crops
under the table so that an
unsecured creditor, like the local
feed mill operator, can be looked
after, at the expense of preferred
creditors like the banks.
"At the same time, we consider
that sometimes the banks take
their security a little too far," says
Phillips. For example, if the bank
refuses a farmer a loan to plant his
spring crops, the farmer will have
to get financing from an indepen-
dent supplier. But then in the fall
the bank will seize the crop against
the farmer's debt. "By not sharing
a little bit with the unsecureds
(creditors), they're almost to the
point of being immoral."
Philllips is also mildly critical of
the Farm Credit Corporation.
While FCC staff are very receptive
to sitting down and talking with
Kingsmount staff and clients, "we
find them very narrow in their
range of flexibility." He's op-
timistic that the current
moratorium on farm foreclosures
in Ontario will lead to greater flex-
ibility from all the farm lending in-
stitutions.
"For far too many
years, the farmer has
accepted too small a
return for the
magnitude of his
investment and the
incredible amount of
work that he does."
While Phillips won't reveal any
clients' names, Sharon Rounds of
R.R. 3, Lakeside, a member of the
Canadian Farm Survival Associa-
tion, has publicly talked about her
involvement with Kingsmount
Financial Services Ltd., first as a
client ... and then briefly as a staff
member. Rounds, who says she
has referred many fellow farmers
to the consulting firm, says
Phillips, provides a valuable ser-
vice because he can get between a
farmer and his banker and work
out a compromise. While farmers
admittedly could go to lawyers and
accountants, Rounds feels that
"Kingsmount (staff) have made
themselves as expert as anyone in
negotiations between a farmer and
banker."
Overall, Ron Phillips is pleased
with the role Kingsmount has
played in resolving individual farm
problems. "If we're successful at
achieving some dignified solution
70 per cent of the time, I can only
be proud." Also, he's not concern-
ed that some of the banking frater-
nity may regard him as a traitor.