The Rural Voice, 1986-06, Page 95r
NEWSLETTER - Bruce County Federation of Agriculture
446 10th St., Hanover, Ontario N4N 1 P9
Money where does it come from?
The Ontario budget is now an
item in history. Robert Nixon did
his planning and came up with
what he thought was the best for
the times. Some, obviously, believe
that he didn't do enough for agri-
culture in the way of handouts. At
least with the provincial govern-
ment we know what we are getting.
He put the money there to con-
tinue the various interest rate relief
programs.
Admittedly, some people don't
qualify for these because they
either have too much or too little
equity and are not eligible; but for
those of us who do receive
benefits, they are a nice shot in the
arm.
I think we all know that these
programs are not the answer to the
main problem, and as some say,
they are just prolonging the agony
for another year. For some, this
may be determined, but I think
most would rather be able to hang
on for another year with the eter-
nally optimistic hope that things
will improve. No one wants to end
up on the street with no home and
no place to go.
Many people say the answer to
our problems is to be able to get a
"price" for our products which
will guarantee a margin of profit.
This certainly would be desirable.
It seems to be working satisfactori-
ly in the egg and broiler business.
However, there are some even yet
in the free enterprise commodities
who still maintain they are making
a profit and want things left as is.
With the size of the gap between
these people and those who are still
operating with a somewhat
negative equity figure, how do you
establish a fair price for the pro-
duct? Is it necessary to eliminate
those with high equity to put
everyone else on a more equal
footing, or do you assume that
regardless of what is done, some
farmers are still going to be lost
and they might as well go now as
hang on for another year when it
94 THE RURAL VOICE
might even be a little worse?
Certainly to determine the
"price" is one problem we are fac-
ed with along with the fact that
many farmers still don't want con-
trols of any sort and this creates
turmoil within the industry. Un-
doubtedly if this did occur, some
farmers would think they were
making windfall profits and want
to buy out everyone else while
some would still be losing money
due to their debt load.
This might be place to mention
the Farmers Creditors' Arrange-
ment Act. Again, many people
shudder, shake and become
violently upset when this term is
mentioned. However as a means of
last resort, maybe this is necessary.
Some of the banks have come a
long way in solving the financial
problems encountered by some of
their customers. There seems to be
a considerably different attitude
between banks as to what they will
do. Write-downs are always look-
ed at as a last resort but in the end,
there is often a smaller loss incur-
red by granting a write-down to the
current operator rather than put-
ting him in the street and trying to
sell to a stranger.
The FCC commodity -based
mortgage doesn't seem to be the
answer either. While the initial an-
nouncement made by Michael
Wilson in his budget sounded
good, the details that came later
didn't.
If prices remain the same or get
worse, a farmer might be able to
gain with one of these mortgages.
However, if there is a major
drought somewhere this year and
commodity prices rise steadily for
the next ten years, a farmer would
end up paying many thousands of
dollars over the term of the mort-
gage and still ower more than he
started with at the end of the mor-
tgage. An example. Take a
$100,000 mortgage today at the
full indexed rate of 6 per cent. If
your commodity to which it is peg-
ged happened to increase at a rate
of 8 per cent per annum, the holder
519-364-3050
would owe at the end of the term
almost $139,000 instead of the
$100,000 which he started with.
Hardly a good way to pay off a
farm!
Should we feel bad about
government subsidies? Con-
sumers, that's us too, presumably
don't like their tax dollars going to
subsidize us but they also don't
like spending too much on food. I
am not sure how much Canadian
agriculture is receiving in the way
of subsidies, however, it is
calculated that the U.S. federal
government is currently spending
just under $2 -billion dollars a
month to subsidize the American
farm. Some sectors will receive
more for their product in subsidies
this year than they will from the
marketplace.
Across the water, the EEC ap-
parently provides subsidies to the
Irish beef producers which total an
equivalent of $1900 per tonne and
$1500 per tonne to the Danish beef
producers. This is almost offset by
the 89`/lb for Irish beef and
71`/lb. for Danish beef countervail
duty that has been imposed on that
meat coming into Canada. They
receive more in subsidies than we
receive from the market.
If our government wants Cana-
dian agriculture to survive, it either
has to protect us from other
governments or give us the cash the
same as they do. Time will tell the
tale! ❑
Submitted by Grant Collins
Second vice-president, BCFA
BRUCE COUNTY
OFMA DEPOT
John Robinson
Paisley, Ont.
Bus. 353-5521
Res. 353-5421